Why Your Annual Financial Review is a Must

What a difference a year can make when planning for your future. Of course, you’re 12 months closer to, or farther into, retirement. Unexpected obligations may have arisen. Your family may have grown or taken on a new structure. Your income may have changed. You may have developed new interests or set new life goals. And, even if you think you haven’t changed, the world around you has.

These are just some of the many reasons why an annual financial review is a critical aspect of your ongoing financial health and why now is the perfect time to meet with your financial advisor, see where you are and want to go, and adjust your investment strategy accordingly. Among considerations to be addressed:

1. Moving Targets. Maybe you’ve decided you want to retire earlier or make sure the new family addition has a college education. Maybe the dreams for your dream home got bigger. An in-depth financial review can not only show your progress toward previously stated goals, but also enable you to create strategies for achieving new ones, factoring in external forces that could stand in the way.

2. Insurance Coverage. Your evaluation should also include a thorough review of your insurance plans. his is a good opportunity to look at your insurance policies and retirement accounts to ensure they align with current plans and situations and whether beneficiaries have changed.

3. Tax Time. You’ll also want to make sure you’re planning in a tax-efficient manner across all your accounts. Your advisor can guide you through this complex territory, suggesting personalized strategies and adjustments to reduce taxes and maximize return. Your estate plan should also be updated to reflect any familial changes and to take advantage of any relevant revisions in federal estate tax law.

4. Charitable Giving. For many, one of the most positive aspects of wealth is being able to give back. While a common approach is to wait until the end of the year to make decisions about giving, planning charitable actions earlier in the year creates much more flexibility.

5. Checks and Balances. A key factor and topic of discussion likely will be asset allocation and diversification and determining whether investments are in balance with current goals and market conditions. This is where it really pays to have a personal investment advisor who fully understands you, your needs, your hopes and your dreams and can structure and restructure your investment portfolio to reflect them.

This is an important process, so be sure to be prepared, giving yourself enough time to pull together all the paperwork you need to create the full picture of your financial life. Armed with this data and the knowledge that the most subtle alterations can ripple through your planning, you can address issues more quickly and speed your journey into the next phase of wealth accumulation.


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