2021 Financial Wellness: Mid Year Check-In

By | July 8th, 2021|Financial Planning|

July marks the mid-point of the year. With kids out of school and the prospect of real, not-in-the-backyard vacation this year, it can be easy to put off thinking about some of the things you need to do consistently to keep your entire financial picture in focus.

Below are a few things you should be thinking about as we head into the second half of the year. We’ve organized them by life-stage, from having small kids to being closer to retirement. We’ve also included charitable giving, as that happens at every stage.

College Savings Plans

  • If you haven’t started one yet – the sooner you get saving, the better. You can fund a 529 plan with up to $15,000 per year and still quality for the annual gift tax exclusion – but you can also fund 5 years at once.
  • If you have a 529 plan set up, it’s a good idea to revisit your allocation as your child gets closer to college age, to make sure you’re not taking too much risk. If you don’t want to consistently manage this, your plan may offer a series of target date funds geared to your child’s age that you can roll into as they grow.

Risk Management

  • Life insurance is critical to keeping your family’s lifestyle and goals on track. For most people, a term life policy offers the ability to cost-effectively replace your salary during your prime earning years. The rule of thumb is the policy should be 5-10 times your annual pre-tax income.
  • If you have life insurance, think about any changes you want to make – are you sure your coverage is enough? How has your situation changed since you put the policy in place? Has your debt increased or decreased?

Retirement Savings

  • Volatility in the markets has increased and is likely to remain elevated. If you’re within ten years from retirement, this is the most critical time for investing. Re-visiting your asset allocation is a good idea, given the big drop and then the outperformance over the last year. Does your allocation match your risk tolerance and your goals? Are you maxing out contributions?
  • If you turned fifty during the last six months, you are now eligible to make the additional “Catch Up Contribution” to your IRA or 401(k) of $6,500.

Long-Term Care Insurance

  • It’s generally sooner than you think to start thinking about long term care insurance, either for your parents or for yourself. Since policies are basically impossible to get once you need the insurance, it’s better to have a plan a place at a younger age. It’s also less expensive.

Charitable Giving

  • If you haven’t yet sorted your plan for charitable giving for 2021, the slower pace of summer can be a good time to think about what is meaningful to yourself and your family and where you would like to see your contributions go to make a difference. Come up with a plan now so you aren’t up against year-end deadlines during the busy holiday season.

The Bottom Line

Thinking about your financial picture and keeping all the different pieces tuned up is important to making sure you and your family are achieving your goals and staying protected. Taking a few minutes to review your plans can pay off in the long run – and then it’s time to enjoy summer!

How does your financial view of 2021 look so far? We are here to assist as you as needed so please don’t hesitate to reach out to set up a time to chat!

The information contained herein is intended to be used for educational purposes only and is not exhaustive.  Diversification and/or any strategy that may be discussed does not guarantee against investment losses but are intended to help manage risk and return.  If applicable, historical discussions and/or opinions are not predictive of future events.  The content is presented in good faith and has been drawn from sources believed to be reliable.  The content is not intended to be legal, tax or financial advice.  Please consult a legal, tax or financial professional for information specific to your individual situation.

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