Sunday, October 17, 2021

Time for a Tune Up

Ask the CFP Practitioner

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Always bear in mind that your own resolution to succeed is more important than any other. Abraham Lincoln.  

QuestionI want to polish my financial plan for 2020. What tips can you provide to get going with this task? 

AnswerThere’s no time like the present to get going on something as important as either creating or reexamining your financial plan. At this time of year, one way to approach this task is to identify Twelve Financial New Year’s Resolution. These twelve steps, if implemented and monitored, may help you achieve your financial goals.  

  1. Get your balance sheet in order. Each year update your personal balance sheet by reviewing assets vs. liabilities, and income verses expenses (real and anticipated).  
  2. Income and Expenses should match or provide you with excess income. How close did you come to your budget last year? Where did you go off track? Has something changed that affects your expenses? Where can you cut back on expenses?  
  3. Review the titling of your accounts. Things change and so should the way your accounts are titled to reflect current situations and estate planning wishes.  
  4. Designate and update beneficiaries for the same reasons as number three above. When is the last time you updated this information? Outdated designations can have unintended consequences.  
  5. Evaluate your cash holdings. What is the amount you’re comfortable being able to access easily and quickly? The classic recommendation is to have six months of living expenses on hand, but your situation may call for more or less. Remember that the maximum FDIC insurance is $250,000 per account.  
  6. Revisit Portfolio Asset Allocation. Are you comfortable with your portfolio’s level of risk? Risk tolerance changes and is not a one-time evaluation.  
  7. Evaluate Retirement Income Sources by identifying them. Will you receive social security, pensions, inheritance, retirement accounts, rental properties or employment income? If so, how much?  
  8. Review your Social Security Statement. Establish an online account with the Social Security Administration to review your earnings history for accuracy. You can compute benefits at various retirement ages. If married or divorced (married for more than 10 years), understand the rules regarding spousal benefits.  
  9. Review tax efficiency of your charitable giving. It’s perfectly okay to be strategic and generous. Some options include donating low-basis stocks rather than cash or even consider establishing a donoradvised fund.  
  10. Determine if your retirement plan is on track. Market volatility and increasing costs cause changes. Realistically address changes that might be needed.  
  11. Make the necessary and indicated changes. Hope is not a plan. Don’t just wait for things to improve, take action. Adjust plan contributions, tax withholding while maximizing retirement plan contributions to receive the employer match and remember the effects of compounding interest.  
  12. Set up a regular review with your advisors. As a CFP Practitioner, I can only help manage what I’m aware of and can’t help you with what we don’t know. In this instance, it’s better to overcommunicate than under-communicate.  

What you do next matters. Your future financial health depends on the decisions and actions you take today. The most important step is not listed and is required for success; take action and follow through. Stay focused and invest accordingly.  

Financial markets and our office will be closed on December 25th and January 1st. We wish you a joyful and peaceful Christmas and a healthy and prosperous new year! 

There is no assurance that “resolutions” will bring financial planning success or materialize in obtaining your goals Investing involves risk, and investors may incur a profit or loss. All expressions of opinion are those of the author as of December 11, 2019, and subject to change.  

The data and information contained herein obtained from sources is considered to be accurate and reliable, but accuracy and completeness are not guaranteed. Any opinions are those of the author, and not necessarily those of Raymond James. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. The author’s views are as of December 11, 2019, and subject to change based on market conditions and other factors. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal issues with the appropriate professionals. Donors are urged to consult their attorney, accountants or tax advisors with respect to the deductibility of various types of contributions to a Donor Advised Fund for Federal and State Tax purposes. To learn more about the potential risks and benefits of Donor Advised Funds, please contact us.  Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.”   This article provided by Darcie Guerin, CFP®, First Vice President, Investments & Branch Manager of Raymond James & Associates, Inc. Member New York Stock Exchange/SIPC 606 Bald Eagle Dr. Suite 401, Marco Island, FL 34145. She may be reached at 239389-1041, email Website: 

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