Financial planning Seasons of planning: Summer edition

What are the Seasons of Planning?
Financial health check-ups can help you make sure your portfolio and your plan reflect life’s latest changes. The Seasons of Planning checklists help to make these “important, but rarely urgent” check-ups part of your routine, as a complement to the account review conversations that you usually have with your financial advisor.

Why use the UBS Wealth Way?
The UBS Wealth Way framework allows us to take stock of what matters most to you and your family—your goals, concerns, and priorities—and uses these insights to build a personalized investment approach that segments your wealth by purpose across three key strategies:

• A Liquidity strategy to help provide cash flow for the next 3–5 years
• A Longevity strategy to satisfy lifetime goals such as retiring comfortably and on time; and
• A Legacy strategy where you can earmark and invest capital for the goals that go beyond your own.

Now that summer is here, it’s time to check in on your progress towards your goals. And consider the aspects of planning below if you’re looking for ways to boost your progress.

1. College savings. The cost of college can be daunting, potentially representing one of the largest single investments that a family makes during their lifetime. Even though your children may be years away from college, the earlier you start saving, the easier it will be to afford those high costs of college education, especially when your savings strategy involves a tax-advantaged vehicle like a 529 College Savings Plan.

For more information, please see How to get the most out of your 529 plan.

Tip: A 529 account can have only one beneficiary at a time. For smaller families, a single account can be “handed down” to the next sibling, once the first beneficiary’s costs are covered. For larger families with two or more children who will be in college at the same time, it may be better to set up multiple accounts.

2. Saving for retirement as a young investor. It’s never too early to start saving for retirement. If you’re new to the workforce and you work for a company that has an employer-sponsored retirement plan like a 401(k), make sure you take advantage of it by investing in it as soon as possible. And, if your employer offers a matching contribution, aim to contribute at least the maximum amount required in order to receive the full employer match.

For more information on how to get the most out of your employer’s benefits, please see A checklist for your work benefits.

Tip: You can set up a Roth IRA for your child, regardless of their age, as long as they have earned income. Contributions can even be made as a gift (subject to the annual $17,000 gift exclusion) from you to your child, up to the lesser of their earned income that year or the annual contribution limit ($6,500 in 2023).

3. Prepare for the transition to retirement. As you travel with your family this summer, think about where you might like to settle down during retirement. You can also use your vacation as a “practice run,” renting a beachfront home or a house closer to the kids to assess the cost of living in the area. Not only will these practice runs help to ensure you’re ready for the financial aspects of the retirement transition, but they will also help you prepare for the nonfinancial aspects as well (see What will your retirement look like? for more information).

Tip: If you have the option to work remotely, you may be able to test out a new location before you retire. Not only will this help you to assess the cost of living in that area, but it will also give you the opportunity to experience what life may be like in the new community before you commit to making it your new home.

Questions to get you started

• When planning for college, are you saving to cover the entire costs or just a portion? Have you discussed these plans with your kids?
• How familiar are you with your company benefits? Do you take advantage of all that is offered?
• When you think of retirement, do you picture yourself relocating or staying in your current city?

Read the full report Seasons of planning: Summer (June 2023)

Main contributor: Ainsley Carbone

This content is a product of the UBS Chief Investment Office.

UBS Wealth Way is an approach incorporating Liquidity. Longevity. Legacy. strategies that UBS Financial Services Inc. and our Financial Advisors can use to assist clients in exploring and pursuing their wealth management needs and goals over different timeframes. This approach is not a promise or guarantee that wealth, or any financial results, can or will be achieved. All investments involve the risk of loss, including the risk of loss of the entire investment. Timeframes may vary. Strategies are subject to individual client goals, objectives, and suitability. This report has been prepared by UBS Financial Services Inc. (UBS FS). Please see important disclaimers and disclosures at the end of the document.