Podcast Episode 361: Planning for Major Life Events

Life is full of unexpected twists and turns, and some of these can have a significant impact on our financial well-being. Whether it’s changing jobs, going through a divorce, receiving an inheritance, or dealing with the death of a spouse, each of these major life events requires careful financial planning. Heath Grossman, CFP® joins the Money Wisdom podcast to explore the essential financial considerations for these pivotal moments.

Changing Jobs: A Fresh Start

Changing jobs is a common life event that can bring both excitement and uncertainty, and there are a few steps you should take on the financial side. Two of the initial items to evaluate are your health insurance options and deciding what to do with your retirement accounts. Should you leave your 401K with your previous employer, roll it over to your new employer’s plan, or transfer it to an IRA? Each option has its benefits and drawbacks, and making the right choice can provide greater control and flexibility over your investments.

Navigating Divorce: A Fresh Slate

Divorce is a challenging and emotional process, but it also presents an opportunity to reassess your financial situation. You’ll want to understand how assets, including retirement accounts and health insurance, will be divided. Now is the time to consolidate accounts and develop a new financial plan that aligns with your changed circumstances. Whether it’s managing alimony, child support, or adjusting to a new income level, having a clear plan can help you move forward with confidence.

Receiving an Inheritance: Planning for the Future

Inheriting money or assets can be both a blessing and a responsibility. Most people don’t understand the tax implications of different types of inherited assets but you want to get a hold of that before making informed decisions about how to manage them. Whether you choose to reinvest the inheritance or use it to achieve specific financial goals, having a strategic plan in place can ensure that the money is used wisely.

Dealing with the Death of a Spouse: Ensuring Stability

The death of a spouse is one of the most difficult life events to navigate, both emotionally and financially. First, it’s important to understand the implications for income sources such as pensions and Social Security. You’ll also need to reassess household expenses and make necessary adjustments to ensure financial stability. Planning ahead and having a clear strategy can help ease the financial burden during this challenging time.

As you’ll get a better idea of on this episode, major life changes require thoughtful financial planning to ensure stability and security. By addressing these events proactively and seeking professional advice, you can navigate these transitions with greater confidence.

Here’s some of what we discuss in this episode:

• When you change jobs, you should pay attention to decisions about health insurance, retirement accounts, and rollovers.

• Why a Rollover IRA is usually a good decision for old accounts.

• What you need to be thinking about financially if you go through a divorce.

• Receiving an inheritance comes with some tax implications you should know about.

• The biggest financial challenges that you deal with after the loss of a spouse.