As the new year rolls around, it's a good time to take stock of your finances and set a plan for the coming months. Use this guide to help you keep track of key dates in your financial year.
Every year, you know there are financial matters you need to take care of throughout the year, but you may not know the best time to do them. This brief, handy guide will help you figure it out.
Review 2015 portfolio performance and make necessary 2016 adjustments: Now.
It’s not written in stone that the end of one year and the beginning of the next is the best time to review past performance and make adjustments. But, since any time is fine, how about now? Why now? Because re-balancing and reviewing can seem like a “nice to have” rather than a “need to have,” and may, for that reason, get pushed to the back burner. But it really shouldn’t. This is an important step to make sure you are on track to meeting your financial goals.
It’s important to review this annually, because priorities change, and financial goals are not set in stone. Use this time to check your progress, verify the performance of any advisor you may be working with, and look at any needs for immediate liquidity.
Gather tax information: End of January.
By Jan. 31, with a few minor exceptions, employers, financial institutions, and others who have documents related to your tax liability are required to send them to you. That’s a good time to gather all your documents for your tax professional, or, if you do your taxes yourself through an online program, to get a sense for your liability or refund. If you owe, you can wait until April to submit your taxes and payments. If you’re expecting a refund, you’ll want to submit your tax returns sooner.
Review wills and beneficiaries: Early spring.
Consider this task a part of spring cleaning. As we covered in greater detail here, each year, you should look over your retirement plan documents, and discuss beneficiaries with your advisor and your family to make sure nothing has changed and the money will go where it’s supposed to in the event of your untimely passing.
Insurance review: Now.
Why now? For the same reason you should review your portfolio performance now--because otherwise this may get pushed to the back burner, where it decidedly doesn’t belong. Life insurance is an obvious need, but depending on your age and overall health, you may also consider long-term care insurance, disability insurance, updating your malpractice coverage, and any other needs you should address.
Of course, there are many other steps you’ll need to take during 2016 to make sure you stay on track. Having a basic calendar in your head or on paper will help you navigate the new year.