Don’t “Fall” Behind on Your Financial Planning

Sep 28, 2022 | Financial Planning, Getting Started

With summer officially over and fall underway, here are some tips to make sure you don’t “fall” behind on your financial planning as the end of the year approaches.  Just as seasons change, financial goals can change, especially as individuals move through the “seasons” of life.  Take this opportunity to review your financial plans and start the new year and winter months on the right track. Talk with your financial advisor about year-end plans and changes to your individual circumstances.  And, if you don’t have a financial advisor, now is a great time to start a conversation so that you can begin 2023 with the confidence that comes with a solid financial plan designed to help you reach your goals.

1. Revisit your asset allocation.

Revisit your asset allocation, which is the percentage mix of stocks, bonds, and other asset types, in your portfolio, by making sure it is in line with your investment objectives, risk tolerance, time horizon, income needs, and ability, both financially and emotionally, to weather volatility. 

2. Update your estate plan.

Update your estate plan to ensure it still reflects how you want your assets distributed to heirs upon your death, which also means reflecting on how the past year has impacted your family and updating beneficiaries if births or deaths have resulted in needed changes. Those planning to give financial gifts to family members because they want to share some of their assets in life, and not only after death, should keep in mind the annual gift tax exclusion limit is $16,000 for 2022 ($32,000 for couples) and make those gifts before year-end.

3. Plan for your taxes.

While you can’t control taxes on income owed to the federal government, states, and local municipalities (taxes vary based on your residence), there are strategies that can be employed on your investment accounts to help minimize the taxes owed on income generated from investments and capital gains taxes. Tax-aware investment strategies seek to optimize after tax-returns by taking into consideration how different types of accounts are taxed. Tax loss harvesting is a strategy that can be employed in taxable accounts to minimize capital gains owed by offsetting long-term gains with short-term losses. Additionally, to avoid excess capital gains taxes in future years when securities are sold, you might seek to generate a specific amount of capital gains on a yearly basis by rebalancing your portfolio with this goal in mind.  

4. Review your retirement contributions and make catch up contributions if in your best interest.

If you’re contributing to an employer-sponsored retirement plan, such as a 401(k), review your year-to-date contributions to make sure you’ve fully funded your accounts for the year since contributions are made on a pre-tax basis and taken advantage of any employer matching since you could be leaving free money on the table. In 2022, you can save up to $20,500 through your 401(k) plan. For those age 50 and older, you can make up to $6,500 in additional contributions. Furthermore, you might want to consider opening an individual retirement account (IRA) if you don’t have one and maximizing contributions to IRAs. The 2022 tax year allows you to contribute up to $6,000 to an IRA plus an additional $1,000 if you are age 50 or older. Last, ROTH IRAs are also a good option for those that meet income eligibility requirements (one has to make below a specified Adjusted Gross Income (AGI) or no income to participate). The 2022 tax year allows you to contribute up to $6,000 to a ROTH IRA plus an additional $1,000 if you are age 50 or older. A Roth IRA allows you to make after-tax contributions and is best suited for an individual who expects to be in a higher tax bracket when he or she starts taking withdrawals, whereas a Traditional IRA allows you to make pre-tax contributions and is generally best suited for an individual who expects to be in the same or lower tax bracket when he or she starts taking withdrawals. In short, a ROTH IRA benefit is tax-free withdrawals in the future and a Traditional IRA allows you to take advantage of tax benefits today.

5. Consider the impact/likelihood of unexpected or milestone life events.

It is important to always be aware of how the things happening in your life might influence your financial situation and needs in the future. As you experience life events or approach milestones, revisiting your financial plan with a financial advisor is imperative because they might dictate changes to your financial plan and investment strategy.

For example, if you’ve recently retired or are considering retirement, this would dramatically change your life circumstances because your primary source of income will go away and you’ll likely need to start drawing on retirement accounts for income to fund your spending at some point in the near future. This requires putting an income plan in place and ensuring your asset allocation is more conservative because, for most, preserving capital becomes more important at this stage in life than growth.

Similarly, if you or a spouse is diagnosed with an illness that might require long-term care then you’ll need to put a strategy in place that ensures you allocate enough of your retirement savings to cover these costs if you don’t have insurance coverage for these types of events. On a more positive note, if you were to win the lottery or receive an unexpected inheritance from a long, lost relative then you’d want to consider how coming into this money changes your overall financial plan – will you donate it to charity, will you retire, will you set up trusts for future generations, will you start a new business?

Don’t underestimate the impact that life can have on your financial plan and communicate changes, however seemingly unimportant, with your advisor to make sure your life situation and circumstances are incorporated appropriately into a comprehensive and holistic approach to pursuing your financial goals.

To book a meeting with your financial advisor or set up an initial consultation please click the scheduling link below.  Our goal at ThinkWealth is to give you useful tools in evaluating your financial situation, whereas our parent company GreenUp, is a nationally recognized registered investment advisor that specializes in financial planning and wealth management.  Regardless of where you are in your financial journey, we’re here to ensure you don’t “fall” behind in your finances and take the opportunity of a new season to also evaluate your financial situation with a new perspective.


  • The GreenUp Wealth Management Team

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