Before You Return to Work: Your Financial Health Checklist

As the coronavirus pandemic continues to linger, many of us are nevertheless facing a return to work as our children return to school this fall.  This article will discuss some ideas for keeping your financial health in check as you make the transition back to work.

How is Your Emergency Fund?

Prior to the pandemic, the rule-of-thumb advice for many financial planners was to keep at least 3 to 6 months’ worth of expenses, in cash, set aside in an emergency fund.  Such an emergency fund is designed to cover your necessary living expenses during any periods of job loss due to illness or layoffs.  Now, with so much uncertainty as to when the pandemic will end and what kind of long-term effects it will have on our economy, advisors are now recommending that we keep 12 to 18 months’ worth of living expenses in our emergency funds.  If you do not have this much cash in the bank, but you have investments in stocks and bonds, you may have to rebalance your investment portfolio to generate more short-term, liquid investments.

How Will You Deal Financially With an Illness?

There are several things we can all do to make sure we are financially prepared in the event of an illness, from COVID-19 or otherwise.  First, take a look at your health insurance and determine the details.  What is your deductible?  Do you have funds set aside to meet the deductible?  Which doctors and hospitals take your insurance?  Do you need a referral to see a specialist?  Second, related to meeting your health plan’s deductible, consider contributing to a Health Savings Account or a Flexible Spending Account if your employer offers one.  Your contributions will be deducted from your paycheck before taxes, accumulate in a separate account for later use, and any withdrawals you make for medical payments will be tax-free to you.  Third, make sure you know what your employer’s sick leave policy is and what your rights are under the Families First Coronavirus Response Act.  This Act is designed to provide certain protections to eligible employees such as paid sick leave for those who are quarantined or experiencing COVID-19 symptoms.  Finally, check on your employer’s short- and long-term disability benefits.  Disability policies are designed to replace a percentage of your income if you become disabled and can be purchased from a private insurer if needed.

Do You Have an Estate Plan and Is It Up to Date?

The pandemic has unfortunately shed light on the necessity of making sure your affairs are in order in the event of death or incapacity.  It is important to make sure you have a Will in order to prevent default rules to apply to the distribution of your assets in the event of an unexpected death.  It is also important to make sure you have decision-makers in place to handle your financial and medical decisions in the event you are incapacitated for an unexpected and uncertain length of time.  It is also crucial for your college-aged children to have at least a Power of Attorney, Medical Directive, and a HIPAA waiver in place.  Even though they are still under your care, they are considered adults once they turn 18, and access to their health information will be very limited.  As was discussed in a prior Hook Law Center article, even if you already have these documents in place, it is important to review them to make sure they are still applicable in a COVID-19 scenario.  For example, are your decision-makers local or would they have to travel in order to help you?  Does your medical directive prohibit intubation in all situations?  Do your power of attorney documents permit your agent to communicate decisions by email, electronically signed documents or video conferencing?

Have You Budgeted For Different Employment-Related Expenses Than Before?

This fall, many of our children are having to attend school virtually.  What does this mean for you if you have to return to work?  If you are not one of the lucky few to have willing family members or friends to supervise the kids, you will likely be spending money on child care that you did previously.  If you were using mass transit for your commute to work before the pandemic, you may be uncomfortable using it now.  Does your budget allow for a new car payment or ride-sharing costs?

These are just some ideas for checking in on your financial health during these unprecedented times.  Hook Law Center, P.C. has two CERTIFIED FINANCIAL PLANNER™ Professionals on staff who can assist you with these important matters.     

Ask Kit Kat: Retirement

Hook Law Center: Kit Kat, are you really retiring from the Hook Law Center?

Kit Kat: Yes, actually September 4, 2020 is my last day. I’ve worked for over 8 years at the firm. It’s been a wonderful experience, and I have learned a lot about the legal profession. At age 17, I feel like I would enjoy having more leisure time at home with my human parents and with my 3 kitty friends—Junior (age 17 from Savannah, GA), Scout and Charlotte (brother and sister from the Eastern Shore of Virginia who are age 4). We are a motley crew, but all in all, this little group has learned to get along with each other and actually enjoy each other’s company.

As you might know, the life of a cat is not as long as that of a human. I want to savor each day that I have left. My mom and dad take excellent care of us. Previous cats that they have had lived long lives. The longest living one was Brigitte, a beautiful Seal Point Siamese. She lived to be 19 years old and 1 month. Another, named Misty, was a tri-color tabby who lived to be 17 years and 4 months. So, I think I am very fortunate to have landed in this wonderful family. After all, I was rescued from a backyard in Virginia Beach by one of our paralegals named Patty, who has 2 of my brothers—Tuck and Socks. I am not sure what happened to my sister Daisy, but I hope she, too, is still enjoying life!

There is an old saying, “Retirement isn’t the end of the road, it’s just a turn in the road.” So, I will begin the next chapter in my life with a hopeful and positive outlook!