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18

CHAPTER 1

people feel that their finances are already taken care of, or are in good shape. While that may be true, everyone can benefit from hiring a financial advisor and having a plan. However, humans tend to procras- tinate, often putting things off so long that it becomes too late. Plus, planning encompasses certain life experiences that may be unpleasant. While planning for retirement may be a positive experience, planning for a disability or death might not be. Then there is the financial cost of planning. Professional financial planners charge a fee for their ser- vices. All of these factors can be deterrents to planning.

In regards to financial planning fees, these may be deductible from your federal income taxes. The current tax laws permit the deduction of expenses caused by the management or maintenance of property held for the express production of income. However, there are limits to deducting these fees.

While planning for uncertain events, such as unemployment, a disability, or a nursing home stay, may be uncomfortable, certainly planning for these events would be preferable to not being prepared for these occurrences. Being caught off guard could then cause the rest of your financial world to go into a tailspin. However, planning and being prepared for such events would make their happening less stressful. Think about it. If you were injured and unable to work, wouldn’t you like to know that you will have money coming in because you purchased disability insurance for yourself?

Death is an eventuality that we all must face. If you want to leave as much of your estate to your heirs as possible, it’s necessary to plan. This way, you will have an idea of what will go to your heirs and what will go to the government in estate taxes. Failure to plan may cause your heirs to fall behind and lose most of their inheritance to the IRS.

WHAT IF I DON’T DO ANY FINANCIAL PLANNING?

In addition to the possible situations of not being prepared when a disability occurs, or when a death happens, there are other costs of not doing any planning. Failure to plan may result in higher than nec- essary income, gift, and estate taxes. There may not be enough money for further education or retirement. You may find yourself unprotected in the event that there is a car accident, unemployment,

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