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As the long days of summer unfold, bringing with them the anticipation of family vacations, backyard barbecues, and leisurely evenings, it’s also the perfect moment to pause and reflect on your financial journey. A financial health check-up ensures your plans stay aligned with your evolving personal and family goals. Conducting these regular reviews is crucial—not only to celebrate your progress, but also to adjust your course in response to life’s changes and economic shifts. Below are six key areas to consider during your mid-year financial review:
Revisiting Your Financial Goals — Start by reviewing the financial goals you set at the beginning of the year. These might include saving for a house, paying off debt, funding education, an upcoming vacation, or preparing for retirement. Reflect on any changes in your priorities and adjust your goals accordingly. This ensures that your financial plan remains relevant and aligned with your existing goals and long-term vision.
Review Your Investment Portfolios — As economic conditions change, so too can the performance of your investments. Review your investment portfolio with these considerations in mind:
Compare the performance of your investments against your expectations and benchmark indices.
Ensure your asset allocation matches your current risk tolerance and investment timelines as those can change over time. Economic shifts or changes in personal circumstances may require some adjustments.
Check in on your portfolio diversification. If you’re overly concentrated in a specific sector or asset class, you may want to further diversify to mitigate risk.
Tax Planning Strategies — Mid-year is a perfect time to evaluate any potential tax liabilities and explore strategies to minimize taxes. This may include:
Retirement Contributions: Maximize contributions to retirement accounts such as IRAs or 401(k)s, which can also lower your taxable income.
Tax Loss Harvesting: Consider selling underperforming investments to realize losses that can offset any capital gains taxes.
Charitable Donations: If you plan on making charitable contributions, consider strategies such as donating appreciated stocks to avoid capital gains taxes.
Check Retirement Contributions — Are you on track to meet your annual contribution limits for your retirement accounts? If not, there’s still time to adjust your contributions to ensure you’re maximizing potential tax advantages and growing your retirement savings efficiently. Remember, contributing to your retirement plan reduces your taxable income and enhances your future financial security.
Evaluate Emergency Funds — Recent global events and economic uncertainties underscore the importance of having a robust emergency fund. Your fund should cover 3-6 months of living expenses. If your fund is not fully stocked or if your monthly expenses have increased, consider adjusting your contributions to shore up this financial safety net.
Update Estate Plans — If you’ve had any changes in your family situation—such as marriage, divorce, births, or deaths—you may want to consider updating your estate plan. Ensure that all documents, such as wills, trusts, healthcare directives, and powers of attorney, are up to date to reflect your current wishes and family dynamics.
Next Steps - Schedule a Check-In
Amidst your plans this summer, schedule a mid-year financial check-up with our team at Aspire Planning Associates to ensure you’re on track to meet your financial objectives. These check-ins provide an opportunity to realign your strategies with your goals, giving you peace of mind and better control over your financial future.
Stay tuned for part 2 of this piece, which explores mid-year tax planning strategies in more detail. Just as it's important to review your financial plan and investments, assessing your tax situation can uncover opportunities to reduce your tax liability and optimize your retirement contributions. In the meantime, we look forward to continuing to support you in achieving your financial aspirations!
