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As the year comes to a close, it’s the perfect time for pre-retirees to conduct a financial checkup. Ensuring financial health can set the stage for a prosperous and worry-free retirement. Here’s a guide to help you start the new year on the right financial foot.
Reflect on Your Goals
Before diving into the numbers, take a moment to reflect on your retirement goals. What do you envision for this next chapter of your life? Whether traveling, starting a hobby, or spending more time with family, understanding your aspirations will guide your financial decisions.
Assess Your Budget
Review your spending habits and create a detailed budget. Are there areas where you can cut back or reallocate funds toward your retirement savings? Knowing where your money goes is the first step in making informed financial decisions.
Review Investments and Retirement Accounts
Evaluate your investment portfolio and retirement accounts. Ensure your asset allocation aligns with your risk tolerance and retirement timeline. Consider rebalancing if necessary. Check for unused contribution room in tax-advantaged accounts and maximize your contributions before year-end.
Emergency Fund Check
Unexpected expenses can arise at any time. Assess the health of your emergency fund – aim for three to six months’ worth of living expenses. A robust emergency fund provides a financial safety net, allowing you to navigate unforeseen circumstances without derailing your retirement plans.
Insurance Coverage
Review your insurance policies, including health, life, and long-term care insurance. Ensure your coverage is adequate for your needs, and consider any adjustments based on changes in your health, family situation, or financial status.
Social Security Planning
If retirement is on the horizon, familiarize yourself with your Social Security benefits. Understand when to start claiming benefits and explore strategies to optimize your Social Security income. Making informed decisions about the timing of your Social Security benefits can significantly impact your retirement income.
Estate Planning Update
Review your estate planning documents, including wills, trusts, and powers of attorney. Ensure they reflect your current wishes and circumstances. Let’s discuss creating or updating your estate plan if you haven’t done so.
A Financial Roadmap for the New Year
Conducting a year-end financial checkup is a proactive step toward securing your financial future in retirement. Start the new year confidently, knowing your financial house is in order, and your retirement dreams are on track. Happy New Year!
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.