Your Guide to Life Events in Finance

When you wake up in the morning, you don’t start your day with the expectation that you’re going to lose a loved one and suddenly receive an inheritance. As humans, we’re naturally wired to plan for the short term. But, life, of course, comes with long-term consequences if we completely ignore the future. Especially when it comes to our financial stability. 

So, what should you do? Should you divert your energies and attention to potential outcomes that may await you in the long term? Or, should you stay completely dialed into the present and simply keep chugging forward?

Unfortunately, life isn’t nearly so binary. One approach isn’t better than the other and much depends on pure chance—life’s fluke windfalls and hard-luck tribulations. However, it’s certainly possible to dedicate your resources to both long- and short-term financial goals. But, to do so successfully, you’re going to need a helping hand.

We can’t overstate the benefits of enlisting a tax professional to help you delineate your financial goals and pursue them effectively. With Steven Lissner & Company, not only do you gain access to an expansive font of accounting knowledge but you also end up devoting less time and energy to managing your portfolio. Imagine, acquiring all of the financial gains with none of the headaches.

This guide can only cover so much ground, but below we have included a series of situations and circumstances that may warrant hiring a tax professional:

11 Key Life Events in Finance

1. Wanting to buy a vacation home. Summer rental homes can represent sentimental bliss; a great escape year after year. If the landlord offers you a sweet insider price, you can’t refuse. Decisions such as this are often made as emotions are high; yet, purchasing a vacation home – especially one that requires rental income to finance – is often a complicated long-term commitment. You may want to look to a financial planner rather than a real estate agent to help you better understand what to consider when making this decision.
   
   
2. Receiving a big raise. Of course, the positive changes to your financial situation may require just as much professional attention as the bad ones. After all, you should treat your money the same way that you would treat a harvest. You may think you have a lot of yields now, but you want to cultivate what you do have so that you can watch it grow even more as the years fly by. There are a lot of ways to do this, and it can be easy to get lost in the minutiae. Why not consider hiring a professional accountant? Ultimately, it’s a small price to pay to secure future wealth and diversify your portfolio. It might be a good time to bump up your retirement savings, as well.
   
   
3. Getting married. Combining your finances with another person’s can be daunting, to say the least. It changes how you approach your taxes significantly, and it can be easy to get lost fast. A lot of people don’t like to think about it, but prenups can be a valuable tool when it comes to protecting each partner’s savings while simultaneously avoiding any possible misunderstandings. They are especially important if either member of the couple is bringing financial responsibilities like children into the marriage. A financial advisor can help newlyweds work out the logistics of their finances in a way that works to the benefit of everyone. 
   
   
4. Graduating. Recent graduates might not think they have enough money to talk to a financial planner. But they face key money choices as they start repaying their share of the over $1 trillion in national college debt with “starter” jobs. They likely could use help prioritizing credit card payments and student loans. Ready to get out of debt as fast as possible? A qualified CPA can help you devise a bulletproof plan for a bright financial future.
   
   
5. Relocating. Moving to another state can be as different as moving to another country. Tax rates differ and the cost of living can shift dramatically. There’s also the cost of moving-related expenses to consider. Whether you need assistance with the financial aspects of buying/selling a home, updating your bank account and insurance providers, or reviewing important documents like wills and trusts, your CPA has all of your pressing financial needs covered. Especially the ones you’ve yet to consider.
   
   
6. Receiving an inheritance. Receiving an inheritance can be bitter-sweet. Acquiring a lump sum of money after the death of a loved one can raise questions about spending habits, charitable contributions, tax payments, and a slew of other concerns. You might want to get help from a professional as you figure out how to handle the money.
   
   
7. Expecting. When a baby arrives, life inevitably gets more complicated. It could be well worth it to add a financial planning meeting to the long list of preparations as you await your new baby. You might want to open a 529 account, for example, to start paying for college, as well as take out additional life insurance policies.
   
   
8. Getting a job. The acquisition of a new job is a great time to check in with a financial planner. Parents, consider paying a one-time fee to a planner as a gift to your child (and to yourself, since it makes your child more independent). Even though your children are now adults, it is not uncommon for them to need – and even want – guidance during this key life transition. 
   
   
9.  Being offered a generous severance package. Emotions often run high when your employer offers a big severance package. It’s important to understand the complex financial issues associated with severance packages. Most plans are immediately taxable, for example, and you want to make sure you understand all the fine print before you sign on the dotted line. A financial advisor will be your best ally in understanding what is right for you in this situation. 
   
   
10. Retiring. Retirement is the pivotal financial moment in a person’s life. If you haven’t already worked with a financial planner to figure out your plans and budget, then now is the time. In fact, financial advisors urge even clients in their 20s and 30s to begin planning for retirement instead of waiting until later in life. Don’t get lost in the maze of 401k and Roth IRA jargon. A qualified CPA can help you untangle the web of retirement plans and identify which model works best for your unique situation.  
    
11. Divorce. As with losing a loved one, your finances are probably going to be the last thing on your mind when it comes to breaking up with your significant other. However, divorces are extremely stressful life events that can completely destabilize your financial situation. With a divorce, almost anything can be disputed, such as the nature of your filing status or who should claim involved children as dependents. A certified public accountant can help you cut through these complicated aspects of divorce and ultimately save you major headaches in the long run. Here are a couple of ways that an accountant can assist you during a messy separation: 

• An accountant can help locate any hidden holdings that may be of interest during the division of assets
• Asset appraisal, including preparation of blueprints for the division of assets
• Identification of all joint assets and liabilities
• Child support calculation
• Account setup for joint fund spending during the divorce
• …and more.

Financial Planning Doesn’t Have to be Difficult…

Life is definitely full of its ups and downs but your finances don’t have to suffer as a result. With a qualified certified public account in your corner, you’ll be able to weather life’s storms and prosper from life’s windfalls. With over 30 years of accounting experience, Steven Lissner & Co. delivers the answer. Whether you need assistance with estate planning, income tax returns, or converting life’s lemons into lemonade, our CPAs will help you stabilize and declutter your finances.