Are you starting the year off with fresh financial goals?
Recommitting to your finances is a great way to enter the new year. One of the best ways to ensure progress toward your goals is to consider how they impact each part of your financial plan and make updates accordingly.
Here are a few things to focus on in 2024:
Account for life events.
One of the most important reasons to continually update your financial plan is to ensure it continues to meet your needs as your life evolves over time. Any time you experience a major life change, such as a marriage, divorce, new baby, death of a loved one, new job, etc., work with your wealth manager to make sure that change is accounted for across all aspects of your financial plan.
Update your goals.
Your goals may not be the same today as they were a year ago. Maybe you successfully saved for a down payment on a home and made a purchase of a second home. Perhaps your son graduated college and you no longer need to plan for that expense. Maybe you injured yourself skiing and decided that purchasing a ski condo is no longer something you wish to pursue. Whatever changes may have occurred in your goals over the last year, be sure to incorporate them into your financial plan.
Minimize your taxes.
Proactive tax planning can lead to significant savings over time, which is why it’s important to regularly check in on your tax planning strategies. If you’re a client of GatePass, your wealth advisor regularly reviews your portfolio’s tax efficiency and makes changes as necessary to help minimize your tax liabilities. However, it’s still important to check in and ensure you’re taking advantage of tax planning strategies available to you either through yourself or your accountant.
Check in on your investments.
When you first established your portfolio’s asset allocation, you chose a mix of investments you believed would give you the best possible chance of achieving your financial goals. Make sure to review your investments and target allocation annually, discussing whether any changes should be made (as life events take place and risk tolerances evolve).
It’s important to periodically rebalance your portfolio back to your original (or an updated) asset allocation. Rebalancing is the process of selling off outperforming investments and reinvesting in lower-performing assets in order to get back to your target allocation. While this may seem counterintuitive, it prevents your allocation from drifting too far from your target investment ranges. This is an important risk management strategy because it helps to prevent one asset type from dominating your portfolio and exposing you to to concentration risk.
Plan for retirement.
Planning for retirement is an important goal to focus on at any age. In fact, the younger you start, the better off you should be when you’re ready to retire. As you review your financial plan, don’t forget to review progress toward your retirement goals. If your financial situation allows, think about possibly increasing or even maximizing your 401k and/or IRA contributions.
Prepare for emergencies.
If you don’t already have an emergency fund, consider starting one as soon as possible. Generally, you should have at least three to six months’ worth of expenses set aside in a liquid account for emergency use. If you have an emergency fund in place but have recently dipped into it, be sure to focus on building it back up to your ideal level.
Protect your loved ones.
Insurance and estate planning are vital components of any comprehensive financial plan. After all, it’s not enough to simply build your wealth — you must also protect it. Ensure your insurance policies continue to meet your ever-changing financial goals. In addition to standard policies, such as medical, homeowner’s and auto insurance, your recent life changes may require additional coverage, such as:
Your wealth advisor can help you establish or update your estate plan with the help of an estate planning attorney. Just like your overall financial plan, your estate plan should be reviewed on a regular basis to ensure it continues to meet your needs as your life and situation evolve over time.
Could you use some help updating your financial plan?
GatePass has you covered. Our experienced professionals are committed to your success at all stages of your financial journey.
Let’s all have a great 2024!
Unless otherwise indicated, commentary on this site reflects the personal opinions, viewpoints and analyses of the author and should not be regarded as a description of services provided by GatePass Capital or its affiliates. The opinions expressed here are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual on any security or advisory service. It is only intended to provide education about the financial industry. The views reflected in the commentary are subject to change at any time without notice. While all information presented, including from independent sources, is believed to be accurate, we make no representation or warranty as to accuracy or completeness. We reserve the right to change any part of these materials without notice and assume no obligation to provide updates. Nothing on this site constitutes investment advice, performance data or a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Investing involves the risk of loss of some or all of an investment. Past performance is no guarantee of future results.
The best time to start is now. Personalized financial solutions don’t have to be difficult. We’d love to chat with you to learn more about who you are, what your goals are, and how we can help.
TALK TO AN ADVISOR