By Christine Graham, UMB Bank executive vice president, director of trust administration and chief fiduciary officer.
Many women are focused on their work-life balance as they juggle the responsibilities of life, but few take the time to think about their wealth-life balance. According to Forbes, in 2020, 60% of wealth in the U.S. was controlled by women. As many women know, one of the best ways to manage everything on your plate is to have a plan. For your wealth and finances, this is a financial plan that you build with a trusted financial advisor. Working with a financial advisor is a journey, and there are a few components you should keep in mind as you work together to achieve wealth-life balance.
Share What Matters Most To You
Nearly 67% of women feel their financial advisor misunderstands their goals, according to Center for Talent Innovation. The first step on your journey is to find an advisor you trust who you can share your hopes, dreams, and goals with. Once you find that person, you should be open and honest about what you want to achieve so your advisor can help you get there. Tell your advisor what you are passionate about and what your values are.
These facts about you are essential to build your financial plan, which serves as a roadmap for how you will achieve your goals and live out your values. Your advisor is also there to answer all your questions about planning options, to ask probing questions designed to help define your goals and objectives, and ultimately to give you the confidence and peace of mind that you understand how your money is being invested and protected.
Control What You Can
Next, talk with your advisor about the things you can control. Again, be honest about your financial picture and share as many details as possible with your advisor. Take the time to review your taxes, retirement plans, and any ideas you have for estate planning or wealth transfer strategies.
With the ever-changing landscape of 2020 and 2021, it is also important to talk with your financial advisor about the impacts of the Coronavirus Aid, Relief, Relief and Economic Security (CARES) Act and other recent legislation. We’ve seen charitable giving, required minimum distributions for retirement accounts and taxes impacted by recent legislation, and it is important to make sure you know how to shift and adjust your plan because of these new rules and opportunities.
Focus On You First, Even Though That May Feel Difficult
According to Spectrum Group, 74% of women rank concern about their children and grandchildren as their top financial priority. If this is also a focus for you, your financial advisor can help you establish a wealth transfer strategy and an estate plan to ensure your assets are distributed the way you want. However, before you get to that step, you need to make sure you can live the life you want.
If saving for your child’s or grandchild’s college education is important to you, it is even more paramount that your retirement savings are on track first. Even if it isn’t ideal, your family can take out loans or apply for scholarships to help pay for college, but you will only have a finite amount of money for retirement. Your financial advisor can help you determine how you can reach your retirement goals and potentially support higher education costs for your family.
Consider Your Future Self
Finally, talk to your financial advisor about what you want your legacy to be. Your advisor can help design your estate plan or set up a wealth transfer strategy that will make the transition to your family smooth and to take the emotion out of it. For example, as mentioned above, if paying for your family’s higher education is a long-term goal, your advisor can help you set up a 529 account or create different gifting strategies based on your wishes.
While it may feel like yet another challenge to undertake as you try to find work-life balance, financial planning will ultimately provide you peace of mind and more power over your current and future financial situation. Lean on your advisor to offer guidance and support as you create your plan. And remember, this is a living document you should review regularly and change as your goals and objectives evolve.
Take control of your finances today and start to achieve your own wealth-life balance.