Take a break from managing your finances when you go on vacation this year. Here’s how:
We are halfway through a pretty grueling year with our government in disarray, a new tax law to come to terms with, and jumpy markets. It’s no wonder that airlines are expecting the busiest summer in the history of U.S. air travel.1 Apparently more people than ever need a break from reality this year.
Common financial advice prior to going on vacation includes tips like alerting your credit card companies of your travel plans so they won’t decline purchases. But there is more you can do to help you take a vacation from your normal routine as well as your finances, particularly if you already work with a financial advisor.
Use your bank or brokerage’s bill pay system so you can receive and pay your bills electronically while away. While this service doesn’t replace the need for you to manage your bills, you can do so from anywhere in the world where you have access to WiFi. You won’t to have to arrange for someone to check your mail, open envelopes, write checks and mail them by the due date. You can handle your bills with little effort while taking breaks from lying on the beach or exploring foreign cities.
In order to pay those bills, you can continue to receive interest, dividends and other distributions from your investment portfolio. Ask your brokerage or advisor to arrange to have these regular payments automatically deposited into your checking account. In addition, your advisor can arrange for you to receive any Required Minimum Distributions (RMDs) from retirement accounts on a schedule that suits your needs.
Serious investors may already make deposits into their investment portfolio on a regular basis. This is called “dollar cost averaging.” If you plan to be away, you can continue this good habit by automating it. Your employer or business should be able to arrange for a percentage of your paycheck to be automatically deposited in your investment account, in the same way that you automatically make retirement fund contributions.
If you have a financial advisor….
…you have increased your opportunities to travel extensively or even go completely off the grid for long periods of time. Your advisor is already monitoring your investment portfolio and making needed adjustments in response to market conditions and the overall economy.
Besides monitoring timely distributions of RMDs from your retirement accounts, if you make charitable distributions from your investment accounts, your advisor can prepare and execute the required paperwork to help ensure that your donations are made and received on time by the organizations you support, even in your absence.
It takes a good deal of planning to get ready for even a weeklong vacation. For those interested in taking a break for several weeks or even longer, automate as many aspects of your payment and income streams as you can. And consult with your advisor to see what else they can do to help you unplug with the assurance that your finances are still working for you.