Major life events can provide the impetus to create or revise your financial plan—and few events are bigger than welcoming a new child. Here are five action items to consider, whether you are a new parent, expecting or simply playing catch-up with your planning:
- Get your child a Social Security number. You’ll need one to add your child to your health insurance, claim them as a dependent on your taxes or establish a college savings account in their name. Your hospital should provide you with the necessary paperwork for a newborn. For adoptees, your adoption agency should be able to help.
- Add your baby to your health insurance. In all the excitement and stress that comes with growing your family, you won’t want to forget this one. Once your baby is born, you have a 30-day window to add the little one to your health insurance coverage. Notify your employer’s HR department or your insurer as soon as possible.
- Review your other insurance coverage. Even if you already have life and disability insurance, you may need to update those policies. Disability insurance can help replace at least a portion of your salary if you are unable to work, and life insurance can provide for your loved ones’ futures if the unthinkable happens.
- Begin budgeting (if you haven’t already). Baby budgeting means more than just adding diapers to the grocery list. Insurance, clothing, childcare and education are among the other expenses that factor in. Consider saving for your child’s future education with a tax-free 529 plan. Finally, be sure to continue making regular contributions to your retirement and investment accounts. Here’s our Budget Worksheet to get you started.
- Update your estate plan. To ensure that your child will be well cared for if something unexpected were to happen to you, you’ll need to update your will to reflect your wishes, designate a guardian and leave clear instructions for your child’s inheritance. After your baby is born, you’ll also want to consider updating your beneficiary designations to include your child on your various financial accounts.
This list is by no means exhaustive; for more detail, please read our Financial Checklist for New Parents. Of course, if you have any questions about your specific situation, please contact your portfolio team. Remember, we are The Planner You Can Talk To.
This material is distributed for informational purposes only. The investment ideas and opinions contained herein should not be viewed as recommendations or personal investment advice or considered an offer to buy or sell specific securities. Data and statistics contained in this report are obtained from what we believe to be reliable sources; however, their accuracy, completeness or reliability cannot be guaranteed.
Our statements and opinions are subject to change without notice and should be considered only as part of a diversified portfolio. You may request a free copy of the firm’s Form ADV Part 2, which describes, among other items, risk factors, strategies, affiliations, services offered and fees charged.
Past performance is not an indication of future returns. Tax, legal and insurance information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice, or as advice on whether to buy or surrender any insurance products. Personalized tax advice and tax return preparation is available through a separate, written engagement agreement with Adviser Investments Tax Solutions. We do not provide legal advice, nor sell insurance products. Always consult a licensed attorney, tax professional or licensed insurance professional regarding your specific legal or tax situation, or insurance needs.
Companies mentioned in this article are not necessarily held in client portfolios and our references to them should not be viewed as a recommendation to buy, sell or hold any of them.
The Planner You Can Talk To is a trademark of Adviser Investments, LLC, registration pending.
© 2021 Adviser Investments, LLC. All Rights Reserved.