FINANCIAL MATTERS: STARTING EARLY Continued from page 12 Health insurance coverage Review the level of coverage during pregnancy as well as the effective date of coverage for the baby. There are many doctor visits and vaccinations during the baby’s first year. Without insurance coverage, these expenses add up quickly. Look at life insurance Beyond providing for your child directly, life insurance can help relieve financial burdens on the surviving parent or guardian. You should also consider beneficiary designations on insurance policies, trusts, or other accounts such as IRAs, annuities, and employee benefit plans. Make sure they’re in line with your overall estate plan. Consider long-term disability insurance The chance you’ll become disabled during your working years is much greater than the probability of you dying during that time. Accidents can happen. You should consider supplemental coverage that can replace your
income if you’re unable to work because of an injury or disability. TIP 3: APPLY FOR A SOCIAL SECURITY NUMBER Your child will need a Social Security number to receive ongoing health insurance coverage; for tax benefits when filing your federal income tax return; and to open a savings or investment account in your childs name. Many hospitals have a process to help you apply for your child’s Social Security number. Waiting a couple months requires more documentation, and it may take longer to complete the process. Visit www.ssa.gov to learn more. TIP 4: CREATE A NEW BUDGET Take another look at your budget to figure out ways to pay for all the new expenses that come with having a baby or adopting a child. By planning ahead and adjusting your budget early, you can stay in control. You’ll need to factor in child care costs, medical costs, food, diapers, clothing and all the other accessories and necessities of life.
TIP 5: START AN EDUCATION FUND College may seem far away, but kids grow up fast, and the cost of college continues to increase. If you put just $50 a month into an account at a hypothetical 8% annual rate of return, in 18 years you would have more than $22,000. You can always increase your savings along the way if your financial position changes. TIP 6: TAKE NOTE OF TAX BENEFITS One added bonus to having a child is the many tax benefits you may be eligible to claim. Some are in the form of deductions reducing your taxable income like the dependent exemption and a Flexible Spending Account. While other tax benefits are credits like the Child Tax Credit, Adoption Credit and Dependent Care Credit which can directly reduce your taxes. Margie Archer, CRPS* ADPA* is a Vice President, Investment Officer and Portfolio Manager. *Wells Fargo Advisors does not provide legal or tax advice. Be sure to consult with your tax and legal advisors before taking any action that could have tax consequences.
Village Magazine 13
Oakhurst Magazine serving the south area of the City of Decatur. Winter issue 2018.