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3 Questions to Ask as You Financially Prepare for the New Year

Updated: Aug 16, 2023

As the new year begins, many people set goals in different areas of their life, including their finances. If you are looking to prepare financially for the new year, here are 3 important financial questions to ask yourself.

1. Do I have a savings goal?

A savings goal often will look different for every person. Most advisors and experts recommend saving 15% of your income to your IRA, 401k, or other retirement savings vehicle. Even if you are not at the point where you can comfortably save 15%, the new year is a great time to add a percentage or two to your retirement contributions. Setting up automatic recurring contributions to a Roth IRA or IRA is a great way to begin increasing your savings.

2. Am I prepared for the unexpected?

There are several components that are important to consider as you prepare for the unexpected. Whether it is a small problem such as a car breaking down, or a larger problem like a house fire or job loss, or how to provide for your family if you unexpectedly passed away. As much as it may be difficult to think about, as advisors, it is our responsibility to ensure our clients are appropriately prepared for life’s events. Being prepared for these events includes setting up an emergency fund of 3-6 months expenses, re-evaluating your home insurance if there have been any changes to your home (which we discuss here), making sure you have an adequate amount of life insurance, and having an estate plan that is up to date.

3. Are my investments appropriately and efficiently invested?

The market decline has been painful and despite that drop, some people could see large capital gain distributions from mutual funds this past year. If fundholders sold shares during the downturn, it could have caused the mutual fund to sell their investments and create gains. This only applies to mutual funds held in taxable accounts (not IRA's or 401k's). Utilizing ETF’s is a way to invest tax-efficiently and avoid these capital gain distributions. Along with this, you must consider whether you are appropriately diversified and allocated for your goals and stage of life.

After asking yourself these questions, if you feel you are lacking in any of these areas, we would be happy to help you get on track so you feel confident and comfortable in all financial aspects of your life. Please contact us here or visit our website for more information.


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