Financial Planning

Financial Planning: COVID, The Coaching Carousel & Your Year-End Checklist

The year 2020 is one that some of us want to put as far into the rearview mirror as possible. It has been a year filled with unprecedented uncertainty on many levels including global health, the global economy, politics, and certainly the world of high school, college, and professional football. Many of you reading this article have had practices, games and even full seasons postponed or cancelled due to the global pandemic. For some, it happened at a moment’s notice, making it all the more difficult to digest and do your jobs appropriately. From coaches to the operations staff and the training rooms and equipment managers, there have too many headaches to count.

But the football world is not free from uncertainty just yet. While we may be somewhat close to the return to “normal” from the pandemic with recent news of a vaccine, December is usually when the firing and hiring of football coaches ramps up to full speed. In most recent years, by mid-December, anywhere from 15 to 30 FBS head coaching jobs and a handful of NFL head coaching jobs have changed hands1. But, in true 2020 fashion, regular season games and conference championships are still being played, meaning the college and NFL playoff pictures are still being decided along with the fate of some coaches and their families. All this while the biggest recruiting day of the year, National Signing Day, is around the corner.

So, how fast will the Coaching Carousel turn this year? Will it come to a halt sooner than normal only to spin off its axis at warp speed next year? Will athletic directors and general managers show grace to underperforming coaching staffs because their attention is directed toward tightening budgets and figuring out how to get fans back into their stadiums? No one knows at this point, and it may be too late to control your own destiny in some regards.

But, one thing you can control is your ability to make sure you have various aspects of your financial plan in place, especially if you find yourself battling through difficulties that may arise from an unexpected job change. Here is a checklist of action steps you may want to address sooner rather than later.

1) Review Your Asset Allocation

The end of the year is a good time to revisit your investment strategy and asset allocation to help ensure your portfolio is still apportioned among stocks, fixed income, cash and other asset classes in a way that fits your goals and risk tolerance. Given the recent market volatility, rebalancing to a target asset allocation and level of risk, or tactically repositioning your portfolio, may help you take advantage of strength in certain asset classes and sectors.

Since the stock market’s low on March 23, 2020, many investors have sought to participate in the rally by deploying cash after stock prices dip or gradually re-entering the market through a process known as dollar-cost averaging. As you do this, be sure to have a plan in place for the optimal asset allocation for your goals and objectives.

2) Update Your Beneficiaries And Estate Planning Documents

Investors may want to consider periodically updating their wills and other estate planning documents. Year-end can be a good time to review the beneficiaries named on your retirement accounts and insurance policies considering any changes the past year brought to your family – as well as your overall estate plan – in order to ensure it still reflects your situation and objectives.

Other ideas you might want to consider may include setting up trusts and also gifting to reduce your overall estate tax liability and providing for education expenses for family members through a 529 plan or a direct gift to an institution.

3) Determine If You Are Tracking To Meet Your Goals

Don’t worry if your financial goals look out of reach now based on what you’ve saved. There are ways to adjust course that aren’t as difficult as you may think.

If you have a long-enough time horizon, increase your investments in equities. Stocks are more volatile than bonds and cash, but given enough time, their returns are also potentially higher, sometimes significantly so. When investors increase their allocation to stocks in their portfolio, they take on more downside risk (risk of a portfolio decline during market corrections), but if they have a long enough horizon, they also increase their potential ability to achieve their goals.

Save more each year – or better yet – each month. In employer-sponsored 401(k), 403(b), and 457(b) plans in 2021, the IRS allows individuals to save up to $19,500 with up to $6,500 in additional contributions for those age 50 or older. In addition, individuals can save up to $6,000 in an Individual Retirement Account (IRA), plus an additional $1,000 for those age 50 or older. If you can put aside even a little bit extra per paycheck, it can put you on a path to achieving your goal.

4) Simplify Your Life With Account Consolidation

Many people find that their financial accounts can end up being spread too thin because they’re using a traditional bank for their day-to-day finances, one brokerage firm for investments, another for retirement savings, and they may also have retirement plans scattered around from various employer-sponsored plans from their past coaching jobs. Having an array of accounts can give you an unclear picture of your financial well-being.

Managing numerous financial streams and expenses can be complex and can hinder the ability to effectively track cash flow. Consolidating your financial accounts into one relationship can help you meet both your long term investment goals while also meeting your day-to-day cash management needs.

In addition to the knowledge, flexibility and convenience of having your finances and investments managed under one roof, the benefits of consolidation may extend to simplifying your taxes and making it easier if you move or when you’re traveling.

It is no secret that most successful teams are the byproduct of a well thought out and well executed game plan. As Benjamin Franklin one said, “If you fail to plan, you are planning to fail.” Well, admittedly, there was no way to plan for the football side of what 2020’s pandemic had in store for us. However, there are ways to plan for the next period of volatility in the stock market or the next financial crisis. We encourage you to take some time to assess where you and your family are now and also in what direction you may be heading. You only have one chance at executing a sound financial plan. Just be sure you don’t wait too long to do so regardless of the chaos of 2020 and what the hectic nature of your profession may have in store for you.

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About The Authors

Investment with Matt Kuerzi and Keith NorrisKeith Norris, First Vice President and Financial Advisor, and Matt Kuerzi, Vice President and Financial Advisor, are co-founders of The Derby City Group at Morgan Stanley in Louisville, Kentucky.  They have a combined 40 years of experience helping families with their financial planning2.  In 2019, Matt was recognized by Forbes in their first ever list of “Best-In-State Next-Gen Advisors”.  He can be reached directly at (502) 394-4094 or matt.kuerzi@morganstanley.com.

Branch address: 4969 U.S. Highway 42, Suite 1200, Louisville, KY 40222

(1) https://footballscoop.com/news/2020-21-nfl-and-college-head-coaching-changes/
(2) Keith Norris, First Vice President, Financial Advisor, experienced in the financial services industry since 1997. Matt Kuerzi, Vice President, Financial Advisor, experienced in the financial services industry since 2002.

The information contained in this article is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be appropriate for all investors as the appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives. Investing involves risks and there is always the potential of losing money when you invest.

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Source: Forbes Magazine (September 2019).  Data provided by SHOOKTM Research, LLC. Data as of 3/31/19. SHOOK considered Financial Advisors born in 1980 or later with a minimum 4 years relevant experience, who have: built their own practices and lead their teams; joined teams and are viewed as future leadership; or a combination of both. Ranking algorithm is based on qualitative measures: telephone and in-person interviews, client retention, industry experience, credentials, review of compliance records, firm nominations; and quantitative criteria, such as: assets under management and revenue generated for their firms. Investment performance is not a criterion because client objectives and risk tolerances vary, and advisors rarely have audited performance reports. Rankings are based on the opinions of SHOOK Research, LLC, which does not receive compensation from the advisors or their firms in exchange for placement on a ranking. The rating may not be representative of any one client’s experience and is not indicative of the Financial Advisor’s future performance. Neither Morgan Stanley Smith Barney LLC nor its Financial Advisors or Private Wealth Advisors pays a fee to Forbes or SHOOK Research in exchange for the ranking.  For more information see www.SHOOKresearch.com.

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