Kim Ciccarelli Kantor  |  Naples Daily News  |  August 15, 2013

There is no one right way to run your “household financial business,” yet these words of wisdom can lead to success: discuss, design and delegate.

These words of wisdom stem from personal experience as well as the shared intimate lifelong experiences of my financial planning clients.

You may be familiar with the saying, “People do not plan to fail; they fail to plan.” Nothing can be closer to the truth when it comes to running your household financial matters. It does not matter which spouse is the financial guru in the family, nor who actually pays the monthly bills.

What does matter is that you discuss your finances and how you want to run them.

For a great way to begin your discussions, start by designating a certain day and time every week – perhaps, a Saturday morning. Whether you enjoy financial matters or not, spouses need dedicated time to discuss their finances and strategic plans together.

Although critical financial discussions are made jointly in most families, few actually discuss their current circumstances or plan of action. Leave the television off, don’t bring up the kids, and keep an open mind. Review your general cash flow, analyzing income and expenses, and expected cash on hand for reserves by year end. Remember, running your finances is like running a business so plan accordingly. Save the inventory of your assets via compilation of a balance sheet and your portfolio review for your meeting with your financial advisor.

This special time is to discuss how you want to spend and save your money, whether you both have similar priorities or any unforeseen circumstances that will hinder or help your financial health and your expectations for the next six to twelve months. (Examples might be income tax preparation, a new roof, retirement plan contributions, tuition expense, or family vacation.)

After you discuss your financial matters, plan. Set your priorities for the next three months. List them out and design your plan of action. Be sure both of you understand the needs and expected results of your plan. Set a dollar amount to your priority items and designate a time table for completion.

As a final item in running all successful businesses, delegate. Your “household financial business” demands no less. Delegate which of you will be responsible for each area. There is no right or wrong way to do this, and there is no such thing as “splitting up the list.”

As a matter of interest, many families have only one spouse who actually handles all financial responsibilities.

This is okay, as long as together you discuss, plan and delegate.

To be truly successful at this, meet with your spouse each week – forever!

Kim Ciccarelli Kantor  |  Naples Daily News  |  July 24, 2013

That magic time in your life might already have come for you; that time when you can proudly call yourself a “retiree.”

This is a time for a sense of freedom to do what you wish with your day and a change from your normal habits of accumulating assets to now preserving and enjoying them. As a retiree, you have an overriding concern to be sure your money lasts as long as you do.

You will face a task that might be more difficult than many challenges previously experienced in your career. Your success will be in planning how to use your portfolio without using it up.

Following are tips for planning your cash flow:

Review your Expenses
Determine the appropriate income you must have to pay necessary expenses to maintain your lifestyle. Your expenses can be categorized into generally three areas: 1) necessary living expenses; 2) travel or leisure activities; and 3) charitable and/or family gifts. Be sure you are realistic in totaling your necessary living expenses. It may be helpful to prepare a spreadsheet to ensure you don’t forget to include all your monthly, quarterly and onetime annual expenses such as property taxes and insurance, auto insurance, life insurance and golf club membership dues, to name a few.

Design your portfolio
Select the appropriate balance of stocks, bonds, and cash to keep within your portfolio. Understand your time horizon and your tolerance for volatility. Based on the Morningstar Index return guide (1), stocks historically provide more return over time than bonds or cash, but not without any down years. Your assets will need to support increased living needs over time and should be properly allocated between equities and fixed instruments.

Organize your cash flow
Determine how much you can afford to withdraw each year from your portfolio, and the timing of the withdrawals. This will help you plan ahead and prepare for the most effective way to live off your portfolio. I have found over the years a realistic percentage of assets to take each year might be around 4%. Taking less than the expected average annual return can provide a cushion to make up for any negative return years. Of course, the appropriate percentage to withdraw from the portfolio will be directly related to the type of investments you hold. In retirement, cash flow should be related to the total return on your invested assets (dividends, interest, and appreciation).

Plan for taxes
Your tax bill will have an effect on how you organize your cash flow. If a pension or supplemental income is providing a major source of your retirement cash flow, then your portfolio might be designed to minimize taxable income. When calculating your net cash flow, be sure to account for the after-tax results.

For many, retirement means freedom of choice. Be sure to study your financial choices, meet with your financial advisor to discuss your options and carefully design your retirement picture.