The coronavirus has given us all a lot of stress, as well as a lot of free time to think. If you’re postponing your summer vacation plans, now may be the perfect time to implement some financial planning “to-do’s” that could enhance your personal wealth and financial well-being.

Here are seven things to consider:

  1. Is there too much risk in your portfolio?

If you’re younger, you may have been told to just wait out the volatile stock market, and indeed that may be best for you. But some people—no matter what their age—are more risk-averse than others, and that’s where working with a qualified financial professional comes in. They can help make sure your portfolio matches your individual tolerance for market risk.

As a general rule of thumb, every year as you get older, your financial advisor should ensure that your portfolio contains less and less risk, as asset preservation and protection from market risk becomes more critical with a shorter timeline to retirement.

  1. Does your portfolio contain a lot of bonds or bond funds?

Some financial advisors only have one tool in their toolbox when it comes to lowering risk in your portfolio as you get older—bonds or bond funds. But with today’s low interest rates, and bond yields tied to those interest rates, bonds or bond funds may not be your best option. And with some public figures1 asking that the Fed consider negative interest rates (like they have in seven other countries), bonds could offer you less than ever in the future.

There are financial instruments like annuities which are not correlated to the stock market and offer guaranteed returns regardless of interest rates. Annuities are not investments, they are complex contracts with insurance companies. The guarantees they offer are based on the financial strength and claims-paying ability of the issuing insurance company, some of which have been around for more than a century. Some annuities offer potential for market growth along with protection from stock market risk, or even lifetime retirement income. Examining the options and clauses for various annuity contracts which might (or might not) work for you requires expertise from a qualified financial professional.

Make sure your financial advisor isn’t a “one-trick pony” and has more than just bonds or bond funds to recommend to you for the fixed, or safer part of your portfolio. You deserve access to other options.

  1. Do Roth conversions make sense for you this year?

Roth IRA accounts have many long-term tax advantages, including tax-free earnings with no RMDs (required minimum distributions) due in retirement—meaning you never have to withdraw any money if you don’t want to. Additionally, you can leave Roth IRAs to your heirs tax-free.

If you roll money over to a tax-free Roth from a taxable retirement account like a traditional IRA, you will pay ordinary income taxes on the amount rolled over in the year that the rollover is completed. This year may be ideal if you’ve earned less and will therefore be in a lower tax bracket already. Or if your traditional IRA account is down in value, you could withdraw some of that money and reinvest it inside a Roth IRA. That way, when the stock market rebounds, those earnings could be tax-free.

NOTE: Rollovers can’t be undone, so it’s best to work with an advisor to do this.

  1. Do you have enough money in your emergency fund?

If the pandemic has taught us anything, it’s to be prepared for the unprecedented. Now is the time to make sure you’ve set aside adequate liquid funds for emergencies. A rule of thumb is three to six months’ worth of living expenses.

  1. Do you have an estate plan in place?

If there is one thing we all hate thinking about, it’s passing away from this earth. But in today’s crazy world, it’s more important than ever to make sure you have everything in place to make things as smooth as possible for your loved ones should the worst happen to you.

Some people think they don’t have enough money to need an estate plan, or they think they are too young, but pretty much everyone needs one to protect their family members. Estate planning includes a will containing your final wishes, possibly a trust which can bypass probate, a health care directive and a power of attorney should you become incapacitated, and other documents depending on your state of residence.

Don’t put this off. And don’t leave your financial advisor out of the process, either, they often have real-life experience and knowledge about what happens to families in cases of death and can help you and your estate attorney address issues you may not have considered.

  1. Do you understand the basics behind filing for Social Security and Medicare?

The age that you file for Social Security—at age 62 when you are able to file, at your full retirement age of 66 or so depending on your month and year of birth, or at age 70 when your Social Security benefit stops growing—is pretty much your only decision if you are single. But if you are married, widowed or are divorced but had been married for 10 years, getting advice on filing to optimize your Social Security benefits is critical.

Similarly, some people don’t understand that Medicare is not free; it is usually deducted from your Social Security check. If you fail to file for Medicare by age 65, you could have higher premiums for the rest of your life. Get the facts well in advance, and know that co-pays, deductibles, and other out-of-pocket health care expenses can really add up even when you’re on Medicare.

  1. Do you have a plan for long-term care?

People still believe that Medicare covers long-term care (LTC). It does not. Medicaid can cover long-term care if you or your spouse needs a nursing care facility, but in order to qualify for it, you have to spend down all of your assets leaving your spouse and/or heirs with nothing.

It’s very important to have LTC coverage in place. The good news is that the traditional long-term care insurance model has been upgraded to plans that can pay for LTC if you need it, but pay other benefits if you don’t.


We are here for you as a sounding board on these and many other issues. Call us. You can reach Cole Koeniger at Eagle Rock Wealth Management at 973.432.0475.



This article is provided for informational purposes only, and is not intended to provide any financial, legal or tax advice. Before making any financial decisions, you are strongly advised to consult with proper legal or tax professionals to determine any tax or other potential consequences you might encounter related to your specific situation. Insurance products like annuities contain fees, such as mortality and expense charges, and may contain restrictions such as surrender periods.