Risk Management

Congratulations, you’re finished with your financial plan, but what happens if…… 

In the final stage of the financial planning process, we’ll run your plan through several “what-if” scenarios to determine what the effect would be on your plan and review potential solutions to help minimize these effects and maximize your probability of success.  

Two of the common “what-if” scenarios we will run are:

Death of a spouse: Do you know what would happen financially to your surviving spouse if you were to pass away prematurely or even at life expectancy?  What portion of your pension will they retain?  Did you realize that your surviving spouse will only retain the higher of your and their Social Security, but the lower benefit will be lost?  Did you realize that once you pass away, your surviving spouse will be subject to the “widows penalty”, now be taxed as a single individual, often resulting in a substantial increase in taxes?  These are just a few of the potential financial pitfalls that can happen when one spouse passes away.  Through our “what-if” scenarios we can see these effects and determine what actions can be taken today to lessen the devastating effects to your spouse.

Long term care:  One of the biggest concerns may not be outliving your income, but instead outliving good health.  What would happen to your spouse if you were to need long term care for a period of time?  With the median cost for a private room in a nursing home now at over $90,000 and increasing at twice the rate of inflation how many years of care could you pay before you run out of money, leaving your spouse destitute.  If you already have a long term care insurance policy, is it sufficient to meet the need.  Or maybe you have enough assets to pay for the care, but is there a better way.  Through our “what-if” scenarios we can these and other questions to determine the effects of under your current situation and looks at options that could improve your overall financial situation.

Through our risk management process we will help you prepare for the unexpected and the inevitable.

“Questions? Phil Putney, CPA/PFS is a federally licensed fiduciary. Call (248) 888-7530 or click here to schedule a no obligation consultation.