Tag Archives: beneficiary

Financial Tips for Newlyweds

Know someone getting married?  Here are some quick tips for the newlyweds to start them off on a secure path to financial bliss.

Notify Social Security – Notify the Social Security Administration (SSA) with any name changes. The IRS has a name match program with the SSA and will potentially reject deductions and joint filing status if the name change is not made timely. You do this by filing Form SS-5.

Selling a home? – If selling one or two residences, review the impact of capital gain tax laws and how they apply to your situation. This is important if one of you has only been in a home for a short time or if the home has appreciated in value.

Update your address – Update your address with the IRS if either of you is moving. You do this with IRS form 8822. Also, change your address at the postal service and DMV.

Notify your employers – Change your name and addresses with your employer to ensure your W-2’s are correctly stated. Recalculate your payroll withholdings and file a new Form W-4.

Beware the marriage penalty – If both newlyweds work, your combined income could put you into a higher tax bracket. This phenomenon is referred to as “the marriage penalty”. On the other hand, marriage could also reduce your tax burden. Because of this, now is a good time to conduct a tax forecast.

Review legal documents – Ensure legal titles are as you wish them after you are married. This includes bank accounts, titles on property, credit cards, insurance, and wills.

Beneficiary statement update – Review any retirement savings plans like 401(k)’s and IRA’s. The beneficiaries on these accounts must also be updated.

Review employee benefits – Review your employee benefits and make the necessary changes in health care, insurance, employee retirement accounts, pensions, and tax-preferred spending accounts. Marriage is a qualified event for most employers to allow you to make mid-year changes.

Talk about it – If you have not already done so, spend some time talking about how you will be managing your financial affairs. Who will be paying the bills? Who will be managing retirement accounts and investments? How will spending be managed? What bills and debt exist? Developing a plan and understanding how this will be handled can help reduce misunderstandings and future disagreements.

Tis the Season…for Review

As 2016 winds to a close, there are a number of tasks that should be reviewed. To help you plan accordingly, here are some things to consider.

Employee benefits – Most employer benefit plans have enrollment periods that coincide with the calendar. Please review your benefit options with your employer and make any necessary changes. Common areas of review include employer-provided health insurance, dental benefits, childcare benefits, Health Spending Account contributions, Flex Spending Account contributions, disability insurance and employer retirement account contributions.

Beneficiary review – Make it a practice to review beneficiary assignments on all your key accounts. This is especially important for your retirement accounts as the beneficiary assignment within the account can supersede a will.

Retirement plan contributions – Review and adjust your contributions to your retirement plans. At minimum, try to contribute enough to take advantage of any employer matching funds in your work sponsored plan.

Insurance review – Consider an annual review of your insurance policies. This includes health insurance, life insurance, disability insurance, home insurance and potential umbrella policies. Are the beneficiaries up to date? Are you happy with the coverage?

Automatic billing – Review your checking account’s automated billing transactions. This is a good time to identify what automatic monthly expenses should be reviewed, reduced or eliminated. You may also discover billing for services you thought were cancelled.

Withholdings – Sometime in December or early January you may wish to review your payroll withholdings. Many of us do this after our tax return is filed. However, if you file close to April 15th, you are losing four plus months of proper withholdings.

Develop your own list – The review suggestions mentioned here impact most of us. However, everyone’s situation is not the same. Use this time to develop a list of your own annual review items. It might include reviewing College Savings Accounts or having an annual sit down to go through an aging parent’s financial accounts.