Additional Financial Topics

Financial planning includes many other areas, as well as investing, that must be addressed. Brief summaries of the G.W. Henssler & Associates, Ltd. approach to other critical financial planning issues are listed below.

Life Insurance

GWH believes that in most cases, life insurance should not be held as an investment, but simply to replace lost earnings in the event of a breadwinner's death. Term insurance is usually the most inexpensive and most appropriate type of life insurance. Projections should be run to determine the most appropriate amount, and term, of life insurance. Consideration should also be given to the goals of the insurance, whether to replace lost income, pay for future education needs, or provide funds to pay off a mortgage. In some cases, life insurance may also be useful as part of a plan to cover possible future estate taxes.

Saving for Education Expenses

The recent tax law changes provided many more options to save for future education needs. Generally, GWH recommends the use of both Education Savings Accounts and Qualified State Tuition Programs (Section 529 Plans). Custodial accounts may also be used to create more tax-free income by taking advantage of the child's income tax exemption. Many states' 529 Plans provide additional benefits for residents of that particular state, although each state's plan is slightly different.

Tax Planning

GWH believes that income taxes should be taken into account at all times when financial decisions are being considered. However, tax considerations should not normally be the deciding factor of whether to take action or not (i.e., realizing taxable capital gains). Tax considerations should also not be the primary reason an investment is purchased, because tax laws can, and regularly do, change.

Saving for Retirement

In most cases, GWH recommends that if an employer matches a portion of retirement plan contributions, this should be the initial retirement savings vehicle for the employees, to the extent that contributions are matched. Next, the maximum Roth IRA contribution should be made, if the individual or couple is eligible. Then, any remaining contributions allowed into retirement plans, such as 401(k), 403(b), SEP, SIMPLE, etc., should be made.

These are just a few general descriptions of the approaches GWH takes to addressing financial issues. More information is available on specific issues in the Henssler University section of the Henssler website.