Financial Priorities Checklist

Here is a list of items to consider when organizing your personal financial matters, in order of priority that applies to most people.  If you want to know more, please contact me.

--Gary Partoyan

• Life Insurance
• Term—create necessary nest egg for your survivors if you die too soon
• Permanent (optional)—to ensure additional buy-up despite health; to maintain coverage throughout lifetime

• Disability Insurance
• Long-term
• Short-term
• Pay for it yourself and have the income benefit tax-free (this is the better choice), or have employer pay for it and have income benefit taxed

• Cash-flow Positive Monthly Budget

• Debt
• Mortgage, car, and student loans are usually okay
• Revolving credit card debt, personal loans, home equity lines of credit, etc., are usually not okay—get rid of them

• Emergency Reserves Fund
• 3 to 12 months of necessary living expenses, in case of income interruption, etc.
• Keep liquid in money markets or the bank, or low-risk investments with easy liquidity

• Retirement Investments (order of funding priority)

1)     Employer-sponsored Retirement Plan—contribute the minimum necessary to get the maximum matching contribution from employer

2)     Roth IRA, if eligible

3)     Employer-sponsored Retirement Plan—top-off up to the IRS maximum allowable contribution

4)     Traditional IRA

5)     (If you still have more to invest for retirement after 401k and IRA contributions) Variable Universal Life Ins and Variable and/or Fixed Annuities for tax-advantaged savings

• Secondary Investment and Savings Priorities
• Education
• Early-retirement
• Private schools
• Charity
• Luxury items
• Investment speculation

• Other Considerations
• Use a professional to file your taxes!
• Use a patient and flexible but expert lawyer to prepare your estate planning documents, which should probably include:
• Pour-over Will
• Revocable Living Trust
• Irrevocable and Marital A-B trusts, if estate taxes are part of your picture
• Durable (financial) Power-of-Attorney
• Advance Medical Directive (in VA, this combines Healthcare Power of Atty and Living Will)
• Childcare provisions