As we approach the end of the year, there’s no more important time for financial planning. It’s your last opportunity to review where you are with your 2021 goals, and it’s your best opportunity for starting off right with the new year. Most importantly, it’s a critical time to review your long-term goals to see if you’re still on track to achieve them.
To-Do for Money Management and Financial Planning in 2022
Here’s a money management plan to help you transition smoothly from 2021 to 2022:
- Review, Adjust & Set Goals for Money Management and Financial Planning
Start by evaluating your short-term goals and ensuring they are achievable within the given timeframe. Also, assess your long-term goals and make any necessary adjustments to stay on track, such as adjusting your investment mix or allocating more savings.
- Save Money by Rebalancing Your 401(k) for Your Financial Plan
If you have stocks in your 401(k), you may have increased your risk exposure after a successful year. Consider rebalancing by selling shares in your stock accounts to get back to your original allocation.
Your insurance coverages may not reflect your current needs, so check them regularly. Consider increasing your coverage or adding a personal umbrella liability policy to protect all of your assets.
- Tax Planning for 2021 and 2022
You still have time to minimize your taxes for 2021. Project your taxable income for 2022 and look for opportunities to defer income or accelerate deductible expenses. Consult your tax advisor to see if any tax changes will affect you and discuss possible strategies.
- Plan Your Charitable Giving
End of the year is the time to plan any charitable gifts for 2021. Decide on how you want to give, whether with cash or appreciated securities, or consider a donor-advised fund.
Take the opportunity to update your will and estate planning documents based on any changes in your family circumstances. Ensure that your estate plan still reflects your current situation and objectives.
- Meet with Your Financial Advisor
Your financial advisor is best equipped to run through this checklist with you and help guide any changes to your plan for 2022. You may be dealing with higher inflation and higher interest rates in the coming year, so it’s essential to see how well-positioned you are to deal with them. If you don’t currently have a financial advisor, consider contacting a local representative of the Alpine Bank Wealth Management team. And if you’re not sure what your goals are or where to start, consider taking our Achieve courses on financial planning.
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