As we approach the new year, taking time to review your financial picture can help keep you on track toward your long-term goals. Here are seven important areas to examine:
1. Review Your Risk Tolerance
Your long-term investment strategy serves as your financial foundation. Now is an appropriate time to confirm your risk tolerance remains aligned with this strategy. Consider whether any significant life changes have occurred that might affect your timeline or goals. A regular review helps ensure alignment between your risk tolerance and portfolio allocation.
2. Update Estate Planning Documents
Year-end provides an opportunity to assess your estate plan. Many individuals neglect to keep these documents current. Your will, trust documents, healthcare directives, and power of attorney designations should reflect your present wishes and circumstances. When you acquire new assets or property, incorporating them into your estate plan maintains clarity for your loved ones.
3. Verify Beneficiary Designations
One of the most critical yet frequently missed financial tasks is reviewing beneficiary designations. Because these designations take precedence over instructions in your will or trust, it is worth confirming that the beneficiaries on your retirement accounts, life insurance policies, transfer-on-death accounts, and annuity contracts still match your intentions.
4. Review Insurance Coverage
Your protection needs may shift as your life circumstances change. A comprehensive insurance review encompasses your life insurance coverage, property and casualty policies, long-term care options, and disability coverage. A clear picture of your current coverage helps protect you and your family.
5. Set Clear Financial Goals
Looking ahead to 2025, establishing specific financial objectives creates a framework for decision-making. Consider recording your major financial milestones for the coming year. Whether planning for significant purchases, setting retirement contribution targets, or mapping out education funding, well-defined goals provide direction and motivation.
6. Build Your Emergency Fund
Your emergency fund should reflect your current circumstances. Think through any changes in your monthly expenses and evaluate whether you have an appropriate level of reserves. The right amount varies by situation, but most households benefit from maintaining three to six months of expenses in readily accessible funds.
7. Assess Your Cash Flow
Understanding your spending patterns offers valuable insights for financial planning. Review your monthly cash outflows and note any changes in your financial obligations. This knowledge helps you prepare for upcoming expenses in 2025 and maintain alignment with your long-term financial goals.
Looking Forward
Regular attention to these key areas supports consistency in your financial approach while allowing for refinements as circumstances evolve. Because each person's financial situation and goals are unique, working with a financial advisor can help you identify how to best achieve your long-term objective.
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To discuss your financial planning needs and how you can prepare for 2025, please contact us.
This content is provided for educational purposes only, represents only a summary of topics discussed, does not constitute any personalized investment advice or recommendation, and represents only the views and opinions of the speakers which are subject to change without notice. Investing involves risk including the potential loss of all amounts invested.
This material prepared by Certus Wealth Management, LLC (“Certus Wealth”) is for informational purposes only. It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product. Opinions expressed by Certus Wealth are based on economic or market conditions at the time this material was written. Economies and markets fluctuate. Actual economic or market events may turn out differently than anticipated. Facts presented have been obtained from sources believed to be reliable. Certus Wealth, however, cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Certus Wealth does not provide tax or legal advice, and nothing contained in these materials should be taken as tax or legal advice.
