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Government and political pros affected by Nov. 8: a 4-step financial planning primer

By Travis Ford

For the first time in eight years, we’ll have a new Governor, a new President and changes in scores of other offices. That means the familiar mass movement of personnel serving longstanding officeholders or campaigns.

Ford
Ford

If you are part of that movement (like I was a few years back), you know the future will look at least somewhat different than the recent past. Maybe you’re leaving a government job; acquiring one; accepting a different one; moving from one campaign or consulting job to another; starting a business; or retiring.

There are four major financial aspects to this transition that should not be overlooked:

  • Income (the obvious one). You will earn more or less. Are you prepared? Do you have a budget that needs to be adjusted downward? If your income is increasing, do you have a plan to put those new dollars to work so that you are rewarding yourself and your family years down the road? My clients who see significant increases in income also see stress: are we making the right decisions? Higher income is a great blessing that can move the needle for your current financial position and your retirement outlook. Put it to good use!
  • How you’re paid. There is a big difference between a steady paycheck (W-2); inconsistent contractor income (1040); your own business earnings; and pensions and Social Security. The impact of these on your family budget and taxes should be examined thoroughly.
  • Retirement accounts. How you save may need to change. Maybe you’re moving to or from a 401k or other employer plan. Maybe you need to create your own retirement account. What are your options for contributing in the future? What will you do with your existing balances? Is your investment strategy changing with your career plans? Maybe you need to be more or less aggressive with your investments. Maybe you need to defer more income for tax purposes.
  • Health benefits. If you’re moving from the public to the private sector, you may experience sticker shock. Does your employer provide benefits to you and your family? After how many months of service? Which plan is right for your family? How will you pay for it? Are there tax-saving opportunities to consider? Are there subsidies available?

These are just a few of the financial implications of this transition. You may be comfortable with your ability to navigate these waters. But there are opportunities and pitfalls around every corner, and they are not always obvious. So you may decide to engage a financial planner, who can provide objective, non-emotional assessments, and recommendations.

Finally, don’t forget to spend some time on your dreams and vision. This is a turning point and a chance to look 10 to 20 years down the road on the career and life you envision. Best of luck to you.

Travis Ford is a financial advisor with Wallstreet Group in Jefferson City and an eight-year veteran of state government. He can be reached at 573-636-3222 or travisf@wallstreetins.com.

Securities and advisory services offered through Client One Securities, LLC member FINRA / SIPC and an investment advisor. Wallstreet Group and Client One Securities, LLC are not affiliated.