Life Crises: How to Achieve Your Financial Goals

1
Life Crises How to Achieve Your Financial
Goals
2
Budget Your Way to Success

• Use personal finance software
• List sources of income
• Identify major expenses
• Record every expenditure
• Cut expenses if possible
• Monitor regularly

3
Budget Your Way to Success

• Cut expenses but pay yourself first
• Emergency funds and loans
• Sell unnecessary items
• Insurance and taxes

4
How to Handle Bankruptcy

• Affects your credit
• Discharges some debt
• Two primary types
• Chapter 7
• Chapter 13

5
How to Handle Bankruptcy

• Chapter 7
• Liquefies assets not exempt
• Restricts who can file by income
• Can use only once every 6 years

6
How to Handle Bankruptcy

• Chapter 13
• Can retain essential property
• Must complete in 3 to 5 years
• Must pay at least 100 monthly

7
How to Rebuild Credit

• Credit counseling service
• Nonprofit is preferable
• Helps organize budget
• Check credentials

8
How to Rebuild Credit

• Debt management plan
• Debt negotiation programs

9
How to Rebuild Credit

• Secured credit card
• Limited to deposited amount
• Available after bankruptcy discharge

10
Staying Out of the Red

• Negotiate severance pay
• Apply for unemployment
• Keep up insurance

11
Protect Yourself with Insurance

• Health insurance
• Compare policies
• Know limitations and exclusions
• Customize
• Rider
• Endorsement

12
Protect Yourself with Insurance

• Health insurance alternatives
• COBRA
• Individual coverage
• Trade group
• State-sponsored

13
Protect Yourself with Insurance

• Medicaid (Medi-Cal)
• Available for certain groups
• Directly pays providers
• Apply through social services office

14
Protect Yourself with Insurance

• Disability insurance
• Deducted by state
• Offered by employer
• Purchase on own

15
Tax Breaks for Job Hunting

• Must seek similar work
• Cannot deduct if too long of a gap
• Cannot deduct costs of first search
• Cannot deduct reimbursements

16
Tax Breaks for Job Hunting

• Possible deductions
• Résumé
• Travel
• Relocation
• Medical Costs

17
Reducing Taxes on Your Estate

• Estate planning
• Minimizes tax consequences
• Needed if worth 1.5 million or more
• Ensures how assets are disposed

18
Reducing Taxes on Your Estate

• Make annual gifts
• Shield property
• Use trusts
• Make charitable gifts
• Fund a life insurance trust

19
Preparing for Your Funeral

• Funeral home not necessary
• Be sure to comparison shop
• Get itemized price list
• Consider package offers

20
Preparing for Your Funeral

• Cemetery considerations
• Religious connection
• Restrictions on memorials
• Incidentals
• Endowment care
• Veteran burial

21
On behalf of AICPA and CalCPA, thank you!