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Question: What suggestions do you have for reviewing, refreshing, and revamping our financial plan for the New Year?
Answer: It’s always a great idea to start the New Year with a focus on financial well-being. Here’s a set of resolutions that may help increase your long-term financial confidence.
Update your beneficiaries
Neglecting to properly document or update your beneficiary designations could result in who gets what being determined by federal or state law, or by an outdated or default plan document used in your retirement accounts. When did you last update your designations? Have life changes (divorce, remarriage, births, deaths, state of residence) occurred?
Update your beneficiary listings on wills, life insurance, annuities, IRAs, 401(k)s, qualified plans, and anything else that’d affect your heirs. If you’ve named a trust, have any relevant tax laws changed? Have you provided for the possibility that your primary beneficiary may die before you? Does your plan address the simultaneous death of you and your spouse? An estate attorney can help walk you through these various scenarios.
Create flexible liquidity
There are tradeoffs in holding cash as it may lose purchasing power due to inflation and lost opportunities. Yet a lack of liquidity may cause other problems if you need to draw from your investments at an inopportune time. Finding the right balance to align your life and goals is important to avoid disrupting long-term plans. The right liquidity strategy is unique for every investor and could incorporate cash reserves, cash alternatives, highly liquid securities, lines of credit, margin loans or even structured lending.
Track retirement progress
Are changes in order to match your lifestyle and the current market environment? Don’t fixate solely on your assets’ value, instead, drill down into what types of securities you hold, expected cash flows, contingency plans, assumed rate of return, inflation rates and life expectancy. Retirement plans have many moving parts that must be monitored on an ongoing basis.
Review account titles
Haphazard account titling can create problems down the line. If one partner dies and an account is titled only in their name, those assets can’t be readily accessed by the survivor. The solution may be creating joint accounts, but it’s not always that simple. Titling has implications across a range of estate planning issues, as well as other situations such as Medicaid eligibility and borrowing power, too.
Develop a charitable strategy
Giving comes from the heart, but you can also do well when doing good. For example, consider whether or not it makes sense to donate low-basis stocks in lieu of cash, or learn about establishing a donor advised fund to take an upfront deduction for contributions made over the next several years. Give, but do so with an eye toward reducing your tax liability.
Spark a family conversation
Sustaining the benefits of wealth for generations is nearly impossible without a mutual understanding among family members. A family mission statement outlines the shared vision for your wealth and legacy. This should include nonfinancial topics, too, like your values, expectations, and important life lessons.
Digitize your record keeping
You likely receive emails, letters, reports, and updates from multiple accounts. Consider going paperless and centralizing important files in one place to reduce frustration and ensure easy access when needed. Your advisor may have access to secure storage tools (ours is “the vault”), that can help.
Invest with your values
Your portfolio should reflect what matters to you – and that can mean anything from avoiding particular industries to actively pursuing others. Your portfolio can be tailored to reflect those priorities.
Check in with your CFP®
Your CERTIFIED FINANCIAL PLANNER™ Professional can offer specialized tools, impartiality and experience earned by dealing with many market cycles and client situations. Communicate openly about what’s happening in your life today and what may happen in the future. It’s difficult to manage what your advisor is not aware of, so err on the side of over-communicating and establish a regular check-in schedule for the year ahead.
These suggestions are a helpful starting point, but no two long-term plans are identical so reach out to your trusted advisor for more specific guidance about progressing toward your goals in 2024. While making financial resolutions, don’t overlook the customary lifestyle and health related New Year’s resolutions; health is wealth. Remember to be kind, loving, caring, and sharing. Stay focused and plan accordingly.
Changes in tax laws or regulations may occur at any time and could substantially impact your situation. Raymond James financial advisors do not render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professionals.
Raymond James & Associates, Inc., member New York Stock Exchange/SIPC. The opinions expressed are those of the writer as of December 21, 2023, but not necessarily those of Raymond James & Associates, and subject to change at any time based on market conditions and other factors. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Donors are urged to consult their attorneys, accountants or tax advisors with respect to questions relating 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 Main™, 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 was 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 (239)389-1041, email darcie.guerin@raymondjames.com Website: www.raymondjames.com/Darcie
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