Five tips for physicians to find personal finance success in 2021

Removing things from your life that don’t serve any of your personal, professional, or financial goals can free your time and resources to dedicate to those things that can. Here is a checklist to get you started:

• Check to make sure there aren’t recurring subscriptions or expenses you are being billed for that you no longer use.
• Review your insurance policies to ensure you aren’t overpaying for coverage that doesn’t fit your needs—especially life and disability policies if you’ve experienced any major life changes.
• Depending on the interest rate environment, consider refinancing your home to potentially save thousands each year on payments.
• Check your credit report for outstanding balances and errors that could be negatively affecting your score.

Rather than finding yourself scrambling at the end of 2021 trying to locate important tax and legal documents, keep them together and sorted properly throughout the year.

1. Property taxes
2. Estate planning documents
3. Proof of charitable contributions
4. Business expenses
5. Healthcare initiatives
6. Payroll logs
7. Insurance policy documents

Your financial advisor may even have access to online document portals where you can upload, share, and securely store these important items electronically.

Beneficiary designations on insurance policies, retirement accounts, bank accounts, and brokerage accounts should be reviewed annually, especially if a major life change such as a marriage, divorce, birth, or death has occurred in the family.

The process generally begins by requesting the proper paperwork from your banking or insurance institution, filling out the desired change, and returning notarized copies.

Contributions for retirement accounts change over time according to the rate of inflation and cost of living adjustments. Unfortunately, the IRS announced that contribution limits for 401(k) s and IRAs will not increase next year. For 2021, 401(k) contribution limits will remain at $19,500 for individuals, plus an additional $6,500 in catch-up contributions for those 50 or older.

The same limit also applies to 403(b) accounts, most 457 plans and the government Thrift Savings Plan. SIMPLE retirement accounts (savings incentive match plan for employees) will also stay at their current savings limit of $13,500.

Limits on individual retirement accounts will also stay at the 2020 level, maxing out at $6,000. Those over 50 can contribute an extra $1,000 to traditional and Roth IRAs in 2021.

The best way to invest is to do so early, often, and on a consistent basis. Keeping your long-term picture in mind is ideal when it comes to your investment portfolio.

Sometimes shifts in our current situation or the market conditions themselves make it necessary for us to adjust our portfolio allocations. You want your current mix of assets and asset classes to align with both your personal timeline and risk tolerance level, two factors that are not mutually exclusive.

The closer you are to retirement, for example, the more conservative you might need to be with your portfolio. If the market experiences a downturn just before you retire, you may not have enough time to recover before your anticipated retirement date. Conversely, if you are early in your accumulation phase, you may be able to afford taking on a little more risk with your allocations.