Articles

by A. Scott White, CFP®, ChFC, CLU
President, Scott White Advisors

Many people have stopped planning for their financial futures because they don’t know what changes might occur in Washington, DC. Health care, tax law changes and other elements that affect financial plans are in heated debate and no one knows the final outcome. However, not planning is far more dangerous than planning based on current data. A logical approach to the facts benefits your financial confidence— and your financial future.

Social Security offers retirement, survivor and disability benefits. However, each type of benefit is based on how much you have paid into Social Security over your lifetime and benefits are minimal. Very few experts predict any Social Security benefits to be more generous in the future; in fact, there are no proposed bills to change disability benefits.

As most retirees know, Medicare only covers acute care. If retirees need assistance with long-term care, Medicare won’t help. It does not cover the custodial care, or daily living activities, which comprise the bulk of long-term care. Does anyone really think Medicare programs will be expanded?

What about protecting yourself from natural and manmade losses of property? We haven’t seen any new proposed laws that fundamentally affect the way you should title your property, incorporate, or purchase property and casualty insurance. At this point, we don’t foresee lower tax rates or new laws that protect surviving spouses from people taking advantage of them.

How will losses resulting from higher health care costs affect you? Whoever collects the premiums or no matter what procedures are covered, you can be prepared by incorporating health care insurance into your financial plan.

Even if none of these bad things happens, how will proposed changes in Washington affect what we want for our future? For example, will proposed changes affect how you pay for your children or grandchildren’s college education—or provide for income during your retirement? Although the federal government currently offers a number of programs for financial assistance, most current discussion focuses on expanding these types of programs to the unemployed. So unless your children or grandchildren are unemployed, you shouldn’t expect much more relief.

Finally, no one knows what the future estate tax rate will be or the size of an estate exemption. For nine of the past ten years, we’ve had either the estate tax rate change or a change in the per person exemption on the size of the estate. An estate plan can accommodate changes in the tax rate or exemption amount.

In short, there’s nothing to lose with financial planning. A well-considered financial plan can help you navigate the future, regardless of the sea changes in Washington, DC.

Scott White is past president of the Financial Planning Association Southwest Florida Chapter. He is past president of the Southwest Florida Chapter of the American Society of Financial Service Professionals, past president of the Lee County Estate Planning Council, and founding president of the Planned Giving Council of Lee County. For more information, visit www.scottwhiteadvisors.com or call (239) 936-6300. Scott White Advisors is an independent Registered Investment Advisor and is located at 1510 Royal Palm Square Boulevard, Fort Myers, Florida 33919. Securities offered through Raymond James Financial Services, Inc., member, FINRA/SIPC.