Finances

Once you have decided to try to sell your home, the next big decision you will face is whether you want to sell it yourself of go through a real estate broker. The broker usually charges 5% to 7% of the selling price for her services. However, realtors know the local market, can help you determine a reasonable selling price, and save you a lot of the hassle involved if you sell it yourself.

Tax

For most of us, our home represents our largest asset. Over time, the management of this asset can make a big difference in our overall financial outlook. One of the largest planning opportunities home ownership brings is the favorable tax treatment afforded the sale of a primary residence.

College

One of new products that came out of the Budget Reconciliation Act of 1996 is the Coverdell ESA. The Coverdell ESA offers the potential for tax-free growth when you use the account to fund a child's qualified higher education expenses.

Insurance


If you purchased your home paying less than 20% down, chances are you had to purchase “mortgage insurance” in order to qualify for your loan. A mortgage insurance policy protects the bank in the event they are forced to repossess your house and sell it at a loss. As with most other types of insurance, you pay a monthly premium on top of your monthly mortgage payment for this policy. A mortgage insurance policy provides the means for purchasing a house you may otherwise be unable to afford, due to a limited down payment.

Retirement

If you have existing retirement assets in a traditional IRA, you may want to consider converting those assets to a Roth IRA. Possible benefits of converting include tax-free distributions at retirement, no required minimum distributions at age 70 ½, and leaving income tax-free assets to your heirs in the event of your death.

Estate Planning

A will is a legal document that transfers what you own to your beneficiaries upon your death. It also names an executor to carry out the terms of your will and a guardian for your minor children, if you have any.

Your signature and those of two witnesses make your will authentic. Witnesses don't have to know what the will says, but they must watch you sign it and you must watch them witness it.

Investments

When you start organizing your portfolio you will want to consider how you will be spending your money after you retire. Some money will be deposited directly into your checking account; such as Social Security where as other income could be less predictable. It is always nice to get extra income you are not counting on but you must not plan on this.

Estate Planning

A revocable living trust provides financial protection in the event you are no longer able to manage your financial affairs yourself. You can be trustee while you are healthy, but if you have a stroke or become otherwise incapacitated, your successor trustee would manage your assets in the trust.

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