4 Financial Factors to Review Annually

Posted on: March 18th, 2018

Many people use tax season as an opportunity to review their finances. But if you’ve never done a financial review before, you might not be sure where to begin. To get you started, here are a few financial items you should review each year:

  1. Investment strategy. A review of your investments — including mutual funds, 401(k) plans, individual stocks and more — isn’t just an opportunity to evaluate investment performance. It’s also a chance to determine if your asset allocation should be updated to reflect where you are in life. For example, many financial planners recommend that a person’s asset allocation should include more stocks when young to maximize growth potential and fewer stocks when older to reduce risk.

Tip: Speak with a financial advisor at Seaside to help determine whether you’re on track to meet your savings and retirement goals for the future.

  1. Tax-efficiency. You can reduce the amount of taxes you pay now or in the future by adjusting the types of accounts you’re invested in. For example, you can defer taxes with some accounts such as 401(k)s and health savings accounts (HSAs) or reduce taxes in the future with Roth IRAs or 529 college savings accounts. You can also adjust your tax withholding if you’ve experienced a life change such as having a baby.

Tip: If you itemize your deductions, you can make contributions to charity and claim them on your tax return to reduce your taxable income.

  1. Insurance needs. Checking your insurance annually may seem unnecessary. But the reality is that you may be missing out on coverage or overpaying on premiums by not re-evaluating your insurance. For example, your home may have increased in value, leaving you with a gap in coverage. Or your car might now be old enough that full comprehensive and collision coverage doesn’t make sense anymore. Have a discussion with a Seaside Insurance professional if you think any of your insurance policies need updating.

Tip: If you have life insurance, check if your insurance beneficiary information is up-to-date. You wouldn’t want a new dependent to be excluded simply because your policy wasn’t updated!

  1. Will/estate plans. If you were to suddenly pass away, do you have a will or estate plan that would address your current family and financial situation? As jobs change, children are born, marriages take place and other life events occur, your will or estate plan should change accordingly. You may not need to make changes every year, but quickly looking over the details never hurts.

Tip: Don’t forget that most investment accounts, including IRAs and 401(k)s, have designated beneficiaries that should also be reviewed whenever you’re updating your will or estate plan.

You don’t need to review your finances on your own. Contact your Seaside Client Advisor today for more information and to schedule a personalized review.

Please note that neither this financial institution nor any of its affiliates give tax or legal advice. Consult your tax advisor regarding your individual circumstances.

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