Helpful miscellaneous articles
regarding our retirement plan and planning.
Like you, I review my retirement nestegg and plan from time to
time. Recently, I went though some
continued education for some credentials I maintain and it occurred to me that
we all could use a review about these issues.
So with your help, we will share and post articles and info that may be
helpful and of interest to many of you in this section.
A little dated but a good checklist non-the-less!
Time to Conduct Your Own Year-End Financial Review
With the holiday season upon us, I
expect most people are caught up in the rush and excitement leading up to
Christmas. But if you can set aside an hour or two, this is an ideal time to
conduct your own year-end financial review. This is a great way to determine
exactly how your year went, take stock of your current status, review your
goals, and consider whether any changes are advisable. Putting your plans into
place now allows you to benefit from the changes and improvements throughout
the entire year of 2015.
I would suggest you carefully
consider each of the following questions. Taking a good look at last year
will help you determine what worked and what didn’t, what you need to change
and what should stay the same. This review puts you in the best position
to define your plan for the coming year.
• What were the best things that happened
to you this year? Did you have an exceptional return on an
investment? Perhaps you did some traveling you particularly
enjoyed. Were you involved with a rewarding volunteer function?
Maybe you added a new grandchild to your family.
• What were the worst things that happened
to you this year? Did you have any unexpected medical
problems? Was the return on your investments disappointing? Were the
expenses for the year much greater than you anticipated? Did you have to
downsize or make unwanted changes to your living standards?
• How much did you set aside in savings
this year? If you still have outside income, were you able
to contribute more money to your savings? Do you expect that outside
income to continue?
• Is the amount of money you withdrew from
your investments appropriate? Was the income you withdrew from savings and/or
investments sufficient to maintain your desired lifestyle? Is
the amount of income you are withdrawing depleting your investments too
quickly? Are you withdrawing income in the most tax-efficient way?
• How much did you invest and were your
returns in line with your expectations? Did you make
well-considered choices in your investments? Did you get the returns you
expected? If your investments are not performing to your satisfaction, how can
you change that?
• Are your financial targets and asset
allocations still in line with your goals? Is your
allocation of stocks and bonds appropriate for your age and your needs? Do you
have a sufficient variety of investments? Are your financial targets realistic?
• Would it be advantageous to make any
changes to your IRA investments such as converting a traditional IRA to a Roth,
re-characterizing a recent change, starting or changing the Required Minimum
Distribution?
• Are there any tax advantages available if
you make a change to your IRA? If you are taking a
distribution, is the timing and amount of distribution appropriate to your situation?
• Will you be taking on any new debt this
year? Consider your expenses from last year — housing,
medical, transportation, etc. — and determine whether any of those expenses
will increase. Will you be taking out any loans in the coming year? If
you have a mortgage, business loan, or line of credit, now may be the time to
evaluate refinancing options since the rates are low.
• Have there been any changes in your life
that could affect your will or insurance needs? Think
about any changes in your family members such as additional children or
grandchildren that might precipitate a change to your will, insurance, or other
legal documents. Review your will to make sure that the content is still in
line with your wishes. Also review your powers of attorney for financial,
healthcare, and living will to determine if any changes are warranted.
• Are your beneficiary designations
current? It’s important to review all beneficiary
information in your will and any other applicable accounts to make sure that
the individuals listed as beneficiaries are correct and their contact
information is still current. Remember to review this information on your IRAs,
since these avoid probate.
• Are there any substantial changes to your
income and/or expenses for the coming year? Review your
income and expenses for this year — both recurring and one-time — and think
about any changes that may occur in the coming year. Do you have a suitable
amount of ready cash available for any emergencies?
• Do you want to take advantage of the
annual gift tax exclusion by making a monetary or property gift to a friend or
family member? The IRS allows an annual gift tax exclusion
for amounts up to $15,000 per person per donor. For example, if you
gifted $10,000 to each of your five grandchildren, neither you nor your
grandchildren would be taxed on the amounts. Obviously, there are some
powerful tax implications here, so you should discuss options with your tax
accountant.
Wishing you a joyous holiday
season and a healthy and prosperous New Year!
(As with any of these informative articles,
anyone who needs someone to talk to about
this
very subject contact me and I can direct you to a knowledgeable advisor).
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