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Webinar: Smart financial moves to consider in 2022

From historic government spending, potential new tax policies and rising inflation to mid-term elections and the ongoing fight against a persistent global pandemic, there's a wide range of factors shaping the market and economic landscape in 2022.

Tags: Investing, Investments, Planning
Published: January 20, 2022

In this webinar, investment and financial planning leaders from U.S. Bank address the current environment, anticipated market and economic developments and, most importantly, smart financial strategies to consider in 2022 that will help put you in control and give you confidence as you work toward your goals.

 

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Webinar: Smart financial moves to make in 2022

BILL NORTHEY: Welcome to the first webinar of 2022 presented by U.S. Bank Wealth Management. I'm Bill Northey, senior investment director with U.S. Bank Wealth Management. And I'll be facilitating today's discussion. From historic government spending, new tax policies, and rising inflation to the upcoming midterm elections and the ongoing fight against the global pandemic, there's a wide range of factors that are impacting both the economic environment and the capital markets in 2022. While you can't control what's going on in the markets, you can control what's going on with your finances.

For the next 45 minutes, we'll have investment and financial planning leaders from U.S. Bank Wealth Management here to address the current environment, the anticipated market and economic developments, and most importantly, the financial strategies that you can employ with your own portfolio in 2022 to improve your chances of a positive outcome.

Before we get started on our topic today, I want to familiarize yourself or familiarize you with a few logistics of the platform that we're working with. Should be very familiar to most of you. You have the ability to customize your screen. You can make the modules bigger or smaller by dragging on the corner of the edge of each of these boxes or windows.

You can hide any of the windows by hitting the X in the upper right-hand corner. The buttons along the bottom of your screen also allow you to control what you're seeing on screen. And if you did close one of those windows earlier, you can certainly reinstate that window by using those controls. Also at the bottom of your screen, you will see a tab labeled Questions. And if you click on that tab, you'll be able to submit your questions that you have during the course of our webinar today. And if your question isn't answered through the content, we'll be happy to get back to you after.

Today, we are joined by Sarah Darr, head of Financial Planning for U.S. Bank Wealth Management, and Rob Haworth, senior investment strategist, U.S. Bank Wealth Management. Welcome, Sarah and Rob, and thank you for being a part of our panel discussion today. Let's get started. As you can see from the agenda in front of you, we're going to hit on three major topics through the course of our conversation today.

First, we'll be talking about the current market and economic outlook. We'll also talk about financial planning strategies that you can utilize in the year ahead given some of those outlooks that we will provide early in the webinar. And then lastly, what are the important portfolio considerations that you might consider to help optimize your goals and objectives and have your portfolio meet those needs? So Rob, let's bring you in. And let's get started with what's going on in the current capital markets and economic environment. Thanks for joining us today.

ROB HAWORTH: Excellent. Thank you very much, Bill. Welcome, everyone, to the call today. So moving ahead to the next slide, what we'll really talk about is, as we think about 2022, we're really thinking along the lines of these three lenses that we really need to bring in focus as we move through this year. First up is kind of unbelievable at this point, but the global coronavirus pandemic is entering its third year. And this remains an important and major factor in how the global economy is evolving, opening and closing, reopening, changing behaviors. This is one of the key factors we really need to get a handle on.

The second important lens we've been evaluating is the jobs market. It's taken us quite some time to return to normal in terms of the jobs market. And with coronavirus' kind of return-to-office and return-to-work dynamics remain really important factors in pushing the economy back into its normal role. And last is the policy front. In 2021, we had significant fiscal stimulus in terms of the pandemic.

As we enter 2022, we're starting to see a Federal Reserve that's looking to change interest rate policy, reacting to the ongoing inflationary pressures, and rethinking really how they're going to approach policy this year. And the market has started to adjust to that. But that dynamic is going to remain very important. Well, corporate earnings remain a really important facet. Really, these three factors are probably the most important ones we're watching as we enter 2021-- or 2022, I apologize.

If we think about earnings as we entered 2021, expectations for corporate earnings were really quite poor. And we saw a significant ramp up in earnings over the course of 2021 which provided such a tailwind to the market. As we look at 2022, we think there's still room for earnings to grow. But it's probably not as great a return as we look at 2022. So we'll have to watch that as we move forward.

But let's take a closer look at these three lenses. And moving to slide 8, let's start talking about the coronavirus. So we continue talking about the coronavirus. We've had now three meaningful waves here in the US. We are in the midst of the Omicron variant. We are now seeing record levels of infections and hospitalizations when it comes to this variant. And we're seeing signs that behavior is starting to change in the short term around this.

And we've seen this happen with past waves, where behavior starts to falter as individuals or businesses make new or different decisions as they're confronted with these risks. So what we're starting to see is consumer activity is softened a little bit in December going into January. We've seen travel and leisure and hospitality spending start to falter as we moved into January.

That's something we're going to keep an eye on. So these waves still remain very important. I think the one thing is you take a look at this chart-- and I'll just highlight the most important factor is the light blue line, which is actually the death rate from this most recent wave. The good news there is-- or the constructive news is this is not nearly as fatal a variant as we'd seen in the past. So I think that's what gives us constructive hope that we're moving past this wave and can get back to perhaps more normal activity as we look forward.

But as I mentioned before, with coronavirus, one of the keys is that return-to-office, return-to-work dynamic. And if we move forward to the next slide, this will give us a more direct look at-- sorry, at what's really going on with the labor market. So what you see here is that the main thrust of this is it tracks payroll growth for the prior decade. And we extrapolate the pre-pandemic trend going forward.

As you can see with the blue line, we saw a significant drop in employment, which makes sense, during the early phases of the pandemic. We've really recovered quite a bit of what we lost in terms of jobs relative to the pandemic. But as of the December jobs report, we're still just about 3 million jobs shy of where we were pre-pandemic. And if we extrapolate forward, if we hadn't been through the pandemic, we're probably 6 million jobs shy of where we'd been.

Now that's a lot. That's a lot of people on the sidelines even when we think about a number that's as big as 160 million or 155 million people employed right now. But it's still pretty significant. I think the challenging thing as we think about the return-to-work and return-to-office is we still have-- through November, we have about between 10 and 11 million job openings.

So in terms of what we're looking for is we're looking for a lot more labor than there really may be out there. So that's one of the important dynamics. As we think about return-to-office, return-to-work, the key question is, are individuals' taste changing? So are they looking to retire, or maybe they don't want to work anymore? Or are they opting out of the labor force? Or are they looking for a new job? Or maybe they're holding out for something better. And that's what we'll have to see as we evolve forward. But this dynamic will be very important in maintaining spending as we move forward.

We look at the last lens, the Federal Reserve, right? This is where policy has a meaningful impact on our economy overall. The Federal Reserve has played a very important role in getting us through this pandemic by making capital available at reasonable prices. For quite some time, they've been buying bonds to hold interest rates down to make borrowing very easy. But in December, they shifted their policy, right? They've shifted to really two things.

First up is they're going to stop buying bonds. So they've been buying bonds to hold those long-term interest rates down. Now they're going to stop buying those bonds. They anticipate wrapping up the program in March. And then they're expected to start to raise interest rates. And what we see here on this chart are really three key factors. So the one key is the dots. So if you take a look at those dots, that's what the Federal Reserve itself on average thinks they're going to do over the next couple of years.

The lighter line is what the market thought the Federal Reserve was going to do before their last meeting, which was mid-December. Their next meeting is next week. And then the darker line is more recent-- at the beginning of January, what the market thinks the Federal Reserve will do. And what you can see is the market has been catching up to what the Fed projected in December. And that is continuing.

So the market very much believes the Fed that they're probably going to raise interest rates three or four times in 2022. Meaning, interest rates will rise. Short term interest rates will rise. Borrowing costs will rise, but a lot of this is so the Federal Reserve can battle what's been the inflationary pressures that are working their way through the economy.

And that's something where I think we've seen the inflation be very constructive. Meaning, wages have gone up. That's a good thing, but problematic because we've seen costs for some items really, really move higher. So as we think about this dynamic of the market expectations and what the Federal Reserve actually does, how that interaction works is going to be really important in determining how the market and economy go over the course of 2022.

BILL NORTHEY: Well, Rob, those are great insights. And as we know, when we're talking about the Federal Reserve, they've often referred to themselves as data-dependent. And I'd like to apologize to our audience, clearly we started this off on a data-dependent sort of foot. So I appreciate everybody sticking with us and being adaptable, and to my colleague Rob Haworth for doing that.

So Rob, we've learned that contextualizing events and where we are with current news can really help us navigate through some of the known milestones. And we've put together a framework that we utilize that helps us think about these identifiable phases and how to contextualize those events. Maybe you could talk to us a little bit about where we currently stand in that current environment.

ROB HAWORTH: Yeah, absolutely Bill. So the framework we really use is we call it horizon 1 and horizon 2. And the way to think about it is the first horizon, we are saddled. We are struggling through this global pandemic-- the openings and closings and re-openings and fits and starts we have with normalization. And that's a dynamic where we're not really back to normal, right? There's not an everyday environment.

And we see this globally as well. China's been a great example, where with their coronavirus policies, they've gone through shutdowns of whole provinces, locking them in. And that really changes the economic environment or the market environment as you think about that. So as we think about the US situation right now, we're still working our way through this horizon 1, where we are still working through this global pandemic.

There is not really an all clear or a new normal yet. It's not yet endemic, meaning we're going to live with it like the common flu. And that doesn't mean we don't have good economic growth. We've actually had very solid economic growth. Fourth quarter growth will probably be quite robust. First quarter growth? Maybe not so much. But we'll certainly see the economy move through this dynamic and maybe meet some more support from fiscal policy. The Federal Reserve will have to be cautious as it deals with inflation. We'll have these supply constrained dynamics that we've been working through with inflation.

As we move past that, our next view and the next important point is really a migration from what we call a liquidity-driven environment to a fundamental-driven environment. And that's horizon 2 for us. It's really the steady state as we move past the pandemic. What is our normal level of activity? We're all back to where we've returned to work, whatever the new return-to-office may be. More things are open. Travel is in its new environment.

And the key here will be rather than getting lots of support from the federal government and the Federal Reserve, the key here will be what is the new level of economic activity? And there's room to be constructive. There's room to think that it's going to be just kind of a more normal level with some meaningful rotation and the types of businesses or activities that do well. So we continue to evaluate these two kind of horizons as we think about what type of market environment we're in, and what type of economy we're really facing.

BILL NORTHEY: Well, great. Thank you, Rob, for those insights. And with that, we're going to go ahead and shift now to thinking about some of the financial planning considerations. And I'd like to bring in my colleague who didn't get the appropriate introduction at the outset, Sarah Darr, who is our head of Financial Planning for U.S. Bank Wealth Management. Sarah, thank you for being here today.

So let's go ahead and shift our focus to some financial planning considerations. And we know as Rob alluded to, there's a lot going on in the global capital market environment, the global economic environment. And we know that those can be outside of our control. But what can be inside of our control is some of the actions that we take. And I'd love to invite you in to share some of those actions with our audience. So thank you for being here, Sarah.

SARAH DARR: Perfect. Thanks, Bill. Yeah, as you mentioned, especially during times of prolonged uncertainty, but even without that, we really believe that understanding your goals and creating a plan to achieve those goals is really critical to make sure that we have clarity, and we have confidence to make sure that we understand your situation. And that we have a plan to make sure that we are achieving those goals.

And oftentimes such as what we have going on right now, we know that these factors can impact your situation unknowingly. Or we need to work through some of those nuances to make sure that we can adapt to situation as needed. But there's also different preferences and motivations that you might be reconsidering. As you've had time to reflect throughout the pandemic, maybe your priorities have shifted over time.

And so having conversations to monitor and to adjust to make sure that your goals are still appropriate, that you're on track to achieve those goals are really important to make sure that we can help you make that a reality. And so that is really why we've created an integrated wealth planning approach that's focused on you. That's focused on your unique situation and on your goals. And so as we talk about your motivations, your priorities, it's really geared towards what is personal to you, what's meaningful to you, and the complexities surrounding your situation.

And so we design a plan that is centered on those goals. We look at the most appropriate strategies. And then we create ability and flexibility to really work in and through that on an ongoing basis. And so that's part of our process that we'll work through with clients. We have advisors with the expertise to be able to build in that wherever you're at in the process. Some of our clients are still working at building wealth. Some of them are really laser-focused on the growth.

Others really want to protect and really look at the risks that they might be facing, or focus on the legacy or the impact that they're trying to generate. And so those are all of the different facets and really why we really believe that planning is core to how and why we work with our clients. So the process for planning for us really begins with a robust conversation around goals. And so on the next slide, what you'll see is we have a dialogue to help identify, what are those top priorities so that we can understand what's most important to you?

And it's not only understanding what, but the importance and the priority level for each of those goals, to understand how they work in concert with one another, to understand the relativity to your situation, and to make sure that we can help deliver the right planning and advice to your situation. The goals and topics that you see listed here contain a lot of the key topics that clients like you are thinking about and are focused on. And as you identify those priorities, the real value that we find is when we can engage in a deep conversation with clients to really understand, what are those motivations and those reasons behind that situation?

A lot of times what we find is that through those conversations, it's the perspectives behind that. It's a lot of the qualitative factors that is often most important and can drive the planning in a more meaningful way, but also has impacts on the broader situation. And so that's why we really believe that having this conversation on a regular basis, adapting and re-prioritizing over time is really going to lead to better results and more impactful planning for your situation. And Bill, I believe we do have a checklist that's attached to the bottom of the screen. If anybody wants to take a look at that and go through that exercise, or we're certainly happy to guide that conversation with you as well.

BILL NORTHEY: Yeah. Thank you, Sarah. And again, if you missed it at the outset, there's a Resources tab along the bottom of the webinar platform that we're working with here today that will link you to a lot of resources that we'll reference throughout the course of our conversation. And so one of the things that we wanted to do is we're actually going to post a poll to get a sense of who we're visiting with today. And so you'll have an opportunity to respond to this poll as we're transitioning into the next slide here.

So when was the last time that you reviewed or updated your financial goals? Within the past year, a couple of years ago, more than three years ago. And if that's the case for either of these last two answers, then we want to talk to you. Or I don't have my goals documented and have a financial plan-- or have a financial plan.

So as we look at those results as they're coming in, it looks as though most of you are good attendees to this particular webinar. You're updating them within the last year. And that's very important as Sarah alluded to is to keep those refreshed and continue to revisit those. So let's go ahead and move on to the next one. And I'd like to invite you back to talk a little bit more about the financial plan.

SARAH DARR: Perfect. Thanks, Bill. Yeah, I agree. I think knowing that this audience has had a regular plan that they're working on and revisiting is really powerful. There's a lot of research out there that less than half of clients have a written plan that they're working on. And so that's something that we are laser-focused on in working with our clients, making sure that they not only have a plan, but have a current plan that we can have a conversation around. Make sure that we are revisiting that. That we are talking about the variety of topics.

Today, we're going to talk about several different facets, but this is not all inclusive. There's many other areas that can be pertinent to your situation. And so it's important for us to make sure that as you think about the different decision making and complexity of your situation, that we really look at those different areas. They're driven by your goals and by your situation. But ultimately, we want to make sure that we are looking at that. We are navigating through that and creating an experience that is really partnering with you to make sure that it comes to life in a way that is both understood by you and is really in alignment with where you want to go.

And so the first area that we're going to talk about today is cash-flow planning. And in essence, it's really understanding how your money is positioned and aligned to your goals so that you can adequately prepare for the future needs of those goals. And one strategy that we recommend to regularly assess is your level of liquidity or cash reserves. And this is really a balancing act. Having too much cash on the sidelines, you can miss out on potential growth and long-term goals.

But on the other hand, without proper liquidity, you do run the risk of not knowing where to draw the funds when the need arises. And you could also result in costly tax consequences or unnecessary selling of long-term positions. So this is why we really want to make sure that you're looking at that liquidity or your cash position to make sure that you have the proper flexibility and you're able to address those immediate expenses. And that's core to having a good financial plan.

A lot of times, you might hear that a good starting point is to have three to six months of monthly expenses set aside during your working years. However, depending on your situation, or if you're in your retirement years, that number may vary based on your sources of income or your expenses.

And so this is why we really want to look at this in conjunction with your overall plan and with your advisor to make sure that we're thinking about this. Because there could be some sources that you can draw upon without having to keep those assets in straight cash. And so that's one thing that we would really recommend that you think about and really consider as you're looking at the year ahead.

It also may be worth looking at where your money is going from an expense standpoint. Are you looking at, and do you have a plan from a savings and an investment standpoint? What does your debt situation look like? Are there opportunities to refinance or to consolidate debt? As Rob mentioned earlier, if we're anticipating a couple of interest rate hikes this year, that might be an opportunity to really take a look at and see if there might be opportunities to activate around that.

And really looking at both sides of your cash flow as well as your balance sheet, because we can often find opportunities that will enhance your situation. And so that's a good way to do smart cash flow planning that can help you both in the short term and in the long term. From an advanced planning standpoint, for some of those clients where retirement is your top priority, and you're nearing that, a critical part of preparing for retirement is really the lifestyle that you want to achieve.

And so understanding your income sources that will be available in retirement is one way that we often work closely with clients to understand, what are the assets? What are your income sources that you're building out? And really projecting that to understand the replacement ratio and the current income so that we can really make sure that you have effectively prepared.

And so that's taking a look at everything that you saved, all of those income sources that are going to be made available. And then taking a look at the specifics around rules and timelines and withdrawals. So that you have an adequate plan once that transition happens so that there are no surprises for your situation.

The other key part of this is the duration of retirement. And this is where it's important to understand how much you're going to be drawing down on your assets. What is your life expectancy or the total years that you're going to be in retirement? And then what are some of those planned and unplanned expenses? Sometimes clients tell us they want to travel more, or they have specific purchases that they planned. But there's also unexpected things that we know often come into play. And so creating a scenario that we can really build that in and understand can help you manage your portfolio and your expenses more strategically.

BILL NORTHEY: So Sarah, thank you for that. And I want to remind the group before we move on that, again, there's a Q&A module in the bottom where you can ask your questions. And if we don't get to your questions to the course of our conversation today, we'll be sure to follow up with you. But Sarah, I want to move us on to another topic that's top of mind for a lot of people as we think about a lot of the legislation that has been put forward and how that might impact taxes. So let's talk about tax strategies.

SARAH DARR: Yeah, absolutely. I know that this is a key area with a lot of complexity and ever changing with legislation, but also with the specifics of your situation. And so this is why we say it's always wise, regardless of what's going on, to make sure that you understand how you're positioned from a tax perspective, and that you are working very closely with your advisors and your tax advisors to make sure that you understand and you're maximizing those opportunities.

One way to do this is to make sure that you're taking advantage of your tax benefits and your retirement accounts. This means taking a look at your current and your future tax rates along with your contributions to retirement and to tax deferred plans. If you don't have access to employer plans, our advisors can help with some other plans that can potentially reduce your taxable income. But there's other vehicles that you can also take advantage of that can help your situation, such as health savings accounts or flexible spending accounts that will have both taxable, but also personal benefits as well.

And there's also on a regular basis, we recommend taking a look at your withholding and your quarterly tax payments for accuracy. That's something that can change on a regular basis, especially as we look at legislation and just annual updates that happen. And so those are just some of the fundamental things that we recommend doing on a regular basis and have an ongoing conversation with your advisors. But as we take a look at-- Oh, go ahead.

BILL NORTHEY: Well, please continue, Sarah.

SARAH DARR: OK. As we take a look at some of the advanced planning strategies, something that's really critical to be doing on a year-round basis is tax-loss harvesting. This is something that we recommend doing and really examining your portfolio to identify and leverage capital losses that can be used to offset capital gains. This can be a really effective way to maximize the upside and then also lower your tax bill. And so this is something that we won't get into all the nuances.

There are some things that you want to make sure that you look out for. But that's something that is a really powerful strategy that we recommend working with your advisors on to make sure that we look out for those rules. In the interest of time, I'm maybe going to move forward. I know we're running short on time, so I'll hand it back to you, Bill.

BILL NORTHEY: Oh great, Sarah. And thank you. And we could spend absolutely the entire webinar on this tax topic, because it's an ever-evolving body of work. So we want our audience to continue to be updated on that. We do have some resources that are available, including LinkedIn in the bottom of this webinar itself, "Understanding Potential Tax Law Changes" article that is very useful.

Additionally, we want our audience to understand we're not tax advisors here at U.S. Bank and U.S. Bank Wealth Management and U.S. Bancorp Investments. But we do want to work closely with you and help to closely align with the advice that you're receiving from your tax professional. So with that, I want to bring my colleague Rob Haworth, senior investment director, back in to talk about some of the investment planning strategies that we might consider as we move into the new year.

ROB HAWORTH: Yeah, thank you so much, Bill. Yes, the investment portfolio obviously sits at the heart of most financial plans. And as I think about 2022 for people, there's really two key things that everyone must do when it comes to their portfolio. One is look at rebalancing. And really rebalancing is a set of three things you need to do when it comes to your portfolio. Or work with your advisor to think about when it comes to your portfolio.

One, you need to affirm that the asset allocation you have-- right? The asset classes you are in are appropriate for the goal you're trying to achieve, right? So are you going to capture enough return over time to meet your needs? The second thing is you need to look at risk. Because ultimately, risk tells us what you can bear as the market gyrates up and down. And we know this happens episodically. But making sure your risk is aligned with your goals, with your tolerance will be very important.

And then finally, you can get to, OK, do I have enough diversification? Do I have enough of the right asset classes? Do I have the right weights in those asset classes? And now, we can get into changing that portfolio in what is normally thought of as rebalancing, which is trading that portfolio. I think the second thing we see that's really important to do for individuals every year is often you end up with cash on the sidelines.

And when we think about that, we think, OK, you can either get invested right now. But we also think a lot about dollar cost averaging. So working your way into the market and into your strategy over a modest period of time, think under two years for sure. Sooner is probably better. So you can take advantage of that market volatility to put, perhaps, more money to work when prices are down-- maybe a little less when prices are up. But yet you get implemented to your plan. And those are the basic things we really need to do every year.

If we roll forward, Bill, and think maybe about some more detailed strategies and considerations we could have in portfolios, there are some things we'd have people consider doing a little differently in their portfolios versus their long-term strategic view. And for us, we really think about it in a couple of ways. First, we'd have a slight emphasis towards stocks relative to bonds at this point in time, right? Part of that is we're seeing interest rates rise, probably a little more so with the Federal Reserve. That's a headwind for bond investors.

Two, earnings are still growing. We had good growth in 2021, but we think we still see good earnings growth, and so therefore probably good stock market returns in 2022. And that extra return we're capturing for taking on that risk is still present. So we tilt that way. Within equities, we think more about large US stocks relative to foreign stocks. Right now the US economy is growing a little faster, earnings growing a little faster. Some of the sectors we have really benefit there.

And then the last thing we have you contemplate is within that bond portfolio, think about taking on some extra credit risk. Buying some lower quality bonds where you're picking up a little extra yield. Right now, the fundamentals of the US economy remain strong. And the fundamentals of that market remain fairly strong. So we think there's some opportunity to pick up extra return there.

BILL NORTHEY: So Rob, you've mentioned a lot of different portfolio considerations that we can think about. And we know we've had topics on this recently as we closed out 2021 joined by some of our other colleagues. And as we move into this current year, we know that the environment is very fluid as you've elucidated. So what are some of the ways that you would encourage our audience to stay up-to-date with our most recent views?

ROB HAWORTH: Yeah, great question, Bill. I think we continue to publish our market analysis on a weekly basis. We make that available. Two, we have our quarterly outlooks that we publish. We recently published it at year end, our 2022 outlook. And coming up at the quarter end we'll be more up-to-date. And then lastly, your advisor will be able to help you with that in a meaningful way.

BILL NORTHEY: Great. Appreciate that, Rob. And so Sarah, let's bring you back in and move on to our next topic of discussion, which is estate planning.

SARAH DARR: Perfect. Thanks, Bill. So yeah, this is definitely one of those really critical pieces of planning not only to make sure that you have an estate plan in place, but it's something that you should be reviewing on a regular basis. Oftentimes what we see is that clients will have a will or revocable trusts, but may be missing other essential pieces that will appoint healthcare or financial decision makers.

And so this is something that we often hear from clients story after story that say that these key decisions and the totality of all of these documents are really what saved them in the critical time of need. And so I would say that number 1, it's not only making sure that you have all of these documents in place. But it's also important to sit down with your advisor to examine that all of your intentions are in place. That we have all of the current provisions are included in those documents. That all of the individuals that you want to be represented, and your intentions are included.

We know that over the last couple of years that there's been a lot of legislation that has been updated. But your situation may have changed too. And so it's critical to make sure that all of your wishes are included here. And then the other thing that we often recommend is to consider how you've communicated your intentions to your family and your loved ones. Some clients find it really valuable to have a family discussion, especially with those who may find themselves in a position of decision making, or to even share where you keep these documents in the event of emergency.

I think that's something that's been really brought to light through this pandemic. That we want to make sure that your loved ones know what decisions you have made, how you've prepared for that. And this also goes for digital accounts and passwords having a plan for how to protect and store this information in a secure way. The other thing related to this is how your assets are titled, and making sure that your beneficiary designations are also as intended.

All of these things can have a really profound impact on your estate situation, and more importantly on your loved ones, who are often the ones who are impacted by this in the event of those situations. So that is high-level, really the fundamental of estate planning. There's so many other strategies from an advanced planning standpoint that we can't touch on today. But based on your situation, our team and our professionals are able to really dig into and see what's appropriate and what can stem from this to really make sure that you can maximize your intent and the impact of what you're trying to accomplish.

BILL NORTHEY: So thanks, Sarah. And if people want to have an additional resource as they think about their estate and legacy planning, again in the Resources tab, we have an e-book titled-- we're now publishing e-books, which we're quite proud of, titled How to Use Your Wealth to Make a Difference. And speaking of that, Sarah, let's talk about our next set of strategies around charitable giving.

SARAH DARR: Yeah, absolutely. I know for many clients charitable giving is a focus especially at year end. We know that that's something that they're often contemplating the causes that are important to them. A lot of organizations are really focused on how they can meet their year-end goals. But it's also something that, as we turn the page to this new year, we think about this as a fresh opportunity to create and think strategically about your charitable giving for the year ahead.

And so it's an opportunity to really think about your giving for the coming year, to think about those tax advantages. It can really be a purposeful way to think about your desired impact, to think about the available funds that you have to give. And so one way that you can do that is to really list out the causes and the organizations that are important to you. And reflecting on that to see, what do you want to learn more about? Are there any organizations that you want to add to the list, maybe get them more involved in.

And then also understanding, how have you facilitated your giving in the past? Do you give directly to an organization? One tool that many of our clients find really helpful to be more strategic and more flexible is the donor-advised fund. That will allow you to pool your donations so that you can advise when and where those funds should be dispersed. It helps to be more proactive. It could help maximize your tax benefit. And it can really facilitate the contributions of planning in an effective way.

So that's just one way to really be thinking about. And we would encourage you to do this earlier on in the year. One thing that can really help is that reactive planning when you do get asked that you don't find yourself thinking, what do I want to do? And how do I want to do this? Or what have I given? And so can really help organize and be more purposeful in your giving.

BILL NORTHEY: That's great, Sarah. And I know we had one major other topic, protection strategies. And maybe we could jump forward to protection strategies so you could touch on just a couple of ways that our audience could think about protection strategies.

SARAH DARR: Absolutely. Yeah, so part of comprehensive planning is not only looking at the goals and opportunities, but it's also looking at areas of risk and exposure. And some of these things may be items that keep you up at night. But others may be things that go unnoticed and that could pose a serious risk to your situation in unforeseen situations or impact your loved ones. And so part of the conversation that we do as part of planning is to really look at and assess a lot of different protection strategies.

One of those is insurance and disability. We can really look at your financial assets, and doing an ongoing review to understand, how are you protecting the wealth that you've created? We can look at your situation, understand where you're exposed, do reviews around that. But there are so many other angles that we don't have a chance to dig into today. There's market risk, liquidity risk, estate risk, business risk.

And so we'd really just leave it at, and mention that protecting and having conversation about risk is so critical to make sure that you understand and that we understand your concerns. And so that's a really valuable conversation for us to have with our clients.

BILL NORTHEY: Yep, Sarah. And you make a great point. And insurance products are offered through our affiliate U.S. Bancorp Investments. And if you're looking for an opportunity to visit with one of those individuals, again, you can touch on the Resources tab. And there's been a lot of things that we've touched on here today. Sarah, is there anything else you'd like to add before we wrap up?

SARAH DARR: Yeah. I'd be remiss if I didn't mention that behind our planning experience is a dedicated and a dynamic process that we really bring together the technical expertise of our professionals and the interactive capabilities of tools and platforms that can really help bring to life the planning process in a way that can give you the confidence and the clarity in your planning. And so what we do is we leverage these tools in a way to be able to identify and update your goals in a collaborative process. It helps show you a financial picture and your goals real-time.

Understand your progress. Help test into different scenarios. But more importantly, it's creating an innovative experience that can empower you to understand and to collaborate with us. So that we understand, and we're locked arms and working through this planning process together. And so that's really how we make this process come to life and create an experience that we are working together on an ongoing basis.

BILL NORTHEY: Well, thank you, Sarah. And I want to thank both Rob and Sarah for being a part of our conversation here today. So as we close up our conversation, I just want to say thank you to our audience. If you're not a Wealth Management client, but you're interested in knowing how to apply the insights that we've talked about here today, or just want a second opinion on the plan, if we go to the next slide, there's an opportunity for you to schedule a consultation with one of our advisors. The phone number on your screen, 844-233-5836. Or you can utilize the electronic version by going to usbank.com/advisor. Or fill out the contact information in the bottom.

Finally, we'll be sending out a replay of this webinar. And it will be posted to our website. But we encourage you to come back. And as I alluded to in our conversation with Sarah earlier, taxes is a topic we could spend an entire webinar on. And we will in March. So there's a tease. Please rejoin us at that time, March 9. Put it on your calendar. So again, thank you to our audience. And thank you to Rob Haworth and Sarah Darr for their thoughtful insights. Appreciate you joining the discussion. Have a great day. 

 

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