It's Spring Cleaning Time!

Posted by John Creekmur, MBA, CFP® on 9:00 AM on April 29, 2021
John Creekmur, MBA, CFP®

It’s Spring! With the change of seasons comes everyone’s favorite time – Spring Cleaning. At our home we have been busy outside doing a Spring clean up in our yard & garden areas. As we clean and prune and plant new seeds, very quickly we start to see fresh new growth. It’s always exciting to anticipate the flowers and vegetables that we will enjoy in the months to come.

This Spring we have also had a big clean-up of branches that fell from trees during the winter ice storm. In many ways it’s been sad to lose beautiful large branches that provided years of shade and a beautiful view in our yard. Now that those branches have fallen down they’re no longer functional and need to be cleared away.

This Spring clean-up in the garden reminds me of the financial planning process. Pruning and cleaning out dead branches prepares the plants for growth later in the season. This is a lot like rebalancing Investment portfolios. There are times when investments or sectors that were winners in the past need to be rotated out. The rebalancing process sets up your accounts for future growth.

We go through the rebalancing process regularly here at Creekmur Wealth. As we evaluate our portfolios, we’re looking for investments that are no longer producing as they once did so that we can rebalance using investments that are currently moving with greater potential for growth.

Recently we have begun to offer rebalancing inside 401(k), 403(b), and other types of retirement plans you may have at work. Take a look at the investments you hold in those accounts as well. If a Spring cleaning is needed, reach out to your advisor to learn more about how we could help with your employer-sponsored retirement plan.

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In the Spring we have to clean up our garden areas, but we also have to plant new seeds. At our house I have planted some vegetables so that I can have fresh salsa later this summer. We also need to plant new things into our financial plans.

We need to evaluate regularly to see if any new additions are needed to your current plan to produce future benefits to you.

Here at Creekmur Wealth we have added new financial planning resources that allow us to do more in depth tax planning. Our goal is to not only provide growth, income, or safety, but do so in a tax efficient way. If you are growing assets in a traditional IRA or 401(k), we would suggest that you go through a conversion analysis. In this process you would move dollars from a pre-tax account over to a Roth account. This allows you to pay taxes now – at current rates – so that you can experience future tax savings when you withdraw those dollars.

You could read more about conversions here and here.  Andy Anderson, Director of Financial Planning will work with you on the Conversion analysis to determine if this is an appropriate option for you.

If you are over age 55 we recommend a Long-term Care analysis. The cost of advanced health care is becoming a future threat. You need to determine if you have a plan to protect your financial well-being in case you need long-term or advanced health care.

There are planning tools that we can use to cover this need. In addition to long-term care insurance there are hybrid solutions available that allow you to leverage the funds you set aside for future health care.  

In addition to the Spring yard clean up, and planting new seeds, we also take time each year to get rid of the fallen branches. Similarly, there may be features in your financial plan that are no longer providing benefits to you. Much like fallen branches – when they’re part of a tree they provide shade and beauty, but once they fall to the ground, they don’t fulfill a useful function.

In our financial plans these “fallen branches” could be old life insurance policies or retirement and investment accounts that you’ve left behind and are no longer managing.

These tools were beneficial in the past, but are no longer fulfilling their purpose. If you have accounts or policies like this, give us a call so that we can take a closer look at them with you to determine if updates are needed.

Spring is a wonderful season for fresh growth in many areas. Let’s not miss this chance to evaluate where we’re at. Do we need to adjust and make improvements in any area? Are there any areas that need a re-fresh? Our goal is to help you be in the best position possible to accomplish your financial goals.

Topics: Financial Planning, From John's Desk

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