When I first took over Daily Insights, I wrote an article entitled ‘The Year of the Bump,’ which was about several of the Acropolitans that were having kids that year. Unfortunately, I wrote that article before our current website, so it isn’t online, but I thought about that in a meeting today.
We were visited by representatives from Dimensional Fund Advisors (DFA) and our primary contact said that he and his wife are expecting their second child.
Our contact probably brought it up because Minjung is visibly pregnant and while he knew that Cliff has a baby under the age of one, he didn’t know that Ryan adopted a girl that, when added to his natural kids, brings his total to seven. The last person from our trade desk, Seongpil (who wasn’t there because he was manning the desk), just came back from paternity leave for his second child. While Marie wasn’t in the meeting, she’s sporting a very nice bump too.
All of these little ones (arrived and forthcoming) reminded me of a checklist by Leslie Beck from the Financial Planning Association that you can use or pass along to the parents of your new grandchildren.
- Get a Social Security Number: Whether or not Social Security will be around when this child turns 67 (or 89 at that point), it’s still a must. Thankfully, it’s pretty easy and can be done when you apply for the birth certificate. Even if your kid never gets a benefit, you’ll get a deduction for your new dependent and you need the SSA number for your tax return.
- Health insurance plans typically cover newborns for up to 30 days, but check with your plan to see what you need to do to make sure that your baby is covered. I know a great guy whose child needed $1 million worth of healthcare due to a heart condition, so this is critical (thankfully the condition is long gone!).
- Review your will or trust. Most young people ignore estate planning because they don’t have a lot of money, but it is essential to name a guardian for your new child. Also, you may need to change the beneficiary designations on your 401ks, IRAs and other retirement accounts. Different lawyers have different views on how this should be done, so talk to a lawyer about specific recommendations.
- Make sure you’ve got insurance for yourself to replace the income that you’re going to earn in the coming years. We’re big fans of level premium term, which is what I have for my family. If something happens to me, my income will be missed (among other things, I hope) and the insurance will cover that. In 10 years or so, all of that insurance will be gone because the kids will be out of the house and will have to make their own money.
- If you can, start a college savings plan for your child. When we first had kids, I felt like I was bleeding money on toys, diapers, multiple joggers and happy playtime classes. Despite that, I still made some 529 contributions and 11 and 13 years later, all of the primary colored junk is gone, but their accounts have grown. Grandparents, this is one where you can help a ton (along with some babysitting).
This list may seem daunting when you’re operating on little sleep and trying to do a million things, but make the time because time flies. Chris told me that the nights were long and the years are short and he was exactly right.