By Vincent Birardi, CFP®, AIF®, Wealth Advisor
Hard to believe, but we are steady barreling towards the end of yet another year. As we look towards 2025 and beyond, now is a great time to take stock of your financial life.
Here are eight important tasks to consider completing before the end of this and every year to help ensure you’re on track to meet your financial goals.
1. Review your retirement plan account beneficiary designations
Naming at least one beneficiary on each of your retirement accounts (e.g., IRAs and 401ks) is important to help these assets avoid probate after your death. Probate can be costly, time-consuming and a matter of public record so this is a great way to help ensure your beneficiaries receive your assets in a timely and private manner.
It’s important to understand the payout periods for beneficiaries of these accounts. Specifically, a spouse inheriting an IRA can spend it down over their lifetime – but still will most likely be subject to annual Required Minimum Distributions (RMDs). In contrast, most non-spouse retirement account inheritors only have 10 years to drain down the account they have inherited. And starting in 2025, they will also be required to take an annual RMD within each of these 10 years if the person from whom they’ve inherited the retirement account had already begun taking annual RMDs.
2. Check in on your retirement planning
If you’re still working, are you keeping pace with planning for your retirement? Here are some questions that merit careful consideration:
When do you want to either stop working entirely or dial back the amount you work? What do you plan to do in your semi / full retirement years? Have you developed a financial goal plan to document those details, including developing an investment plan designed to help give you the best chance to retire on your terms?
Here’s where working with a CERTIFIED FINANCIAL PLANNERTM professional can make a difference.
3. What are you spending?
Let’s be honest: Tracking your expenses is similar to going to the dentist. It can be painful and uncomfortable but it’s necessary to do on a routine basis for your overall well-being. Take the time to track your routine spending and ensure that it’s in line with your income and your longer-term financial goals.
4. Locate any forgotten investment accounts
Take the time to confirm you don’t have an old retirement account you contributed to with a previous employer and have since neglected. You may be able to merge it into a similar account to reduce your overhead – and consolidate and streamline managing your investments.
5. Review your Social Security and Medicare elections
If you’re either on the cusp of participating in or are currently enrolled in either or both of these programs, be sure to review your current elections to ensure that they are in line with your cash flow and medical insurance needs.
6. Review your tax situation
Are you aware of your projected taxable income this year? What’s your marginal tax rate? Do you have any carryforward capital losses? The list goes on. Have a conversation with your tax preparer and your CERTIFIED FINANCIAL PLANNERTM professional to address these and other pertinent tax planning matters.
7. Confirm that your insurance coverages meet your current needs
Your insurance needs will vary over time as your life circumstances change. Be sure to review your current coverages (home, auto, life, & umbrella, to name a few) to ensure you’re adequately covered.
8. Make sure you have a Digital Estate Plan
Invest the time to create and securely store digital copies of your essential estate plan documents – wills, trust documents, medical directives and powers of attorney. Then be sure to share the location with whomever you have entrusted to assume these decision-making responsibilities and/or identified to inherit your estate assets. This can save time and avoidable stress for everyone involved in locating these important documents.
Disclosure:
Halbert Hargrove Global Advisors, LLC (“HH”) is an SEC registered investment adviser located in Long Beach, California. Registration does not imply a certain level of skill or training. Additional information about HH, including our registration status, fees, and services can be found at www.halberthargrove.com. This blog is provided for informational purposes only and should not be construed as personalized investment advice. It should not be construed as a solicitation to offer personal securities transactions or provide personalized investment advice. The information provided does not constitute any legal, tax or accounting advice. We recommend that you seek the advice of a qualified attorney and accountant.
