By Eric Tashlein
Your Finances
Eric Tashlein.
As 2019 rolls to a close, it’s a good time to review the results of your financial plan over the past year and make adjustments in anticipation of 2020.
Retrieve your written 2019 financial goals from your desk drawer and determine whether you met those goals. Perhaps you planned to save $20,000 but you only put away $15,000. Maybe you planned to rebalance and diversify your investment portfolio but never got around to it.
Ask yourself what happened. Did you experience a major change this year such as a reduction of income or unexpected expenses? Or did you just get busy with other things?
If you decide that your financial plan/goals need to be revised in light of your 2019 experience, now is the time to make those revisions, before you get busy after the new year.
Here are some items to consider before New Year’s Eve comes around:
Take advantage of year-end tax-saving strategies. Offset capital gains by taking losses on under-performing assets in taxable brokerage accounts. (It’s best to seek help from a financial planner with this type of strategy, since there are IRS rules such as the wash-sale rule to take into account.) This is also the time to plan next year’s taxes by reviewing your deductions.
Maximize your retirement accounts. Make the most of any employee match you are offered through a 401(k) plan, and contribute as much as you can to IRAs and other tax-advantaged accounts.
Tune up your portfolio. Check your asset allocation and rebalance as needed. Look at the mutual funds or other investments you have and decide if you need to make any revisions in light of changes in your life or in the economy.
Review insurance and health-care coverage. Make sure you have the insurance coverage that is right for your family and business situation. Ensure that you still have the proper health-care coverage and maximize contributions to your health savings account.
Clean up spending. Look at your credit card bills and identify and cancel automatic payments for products or services you are no longer using, such as streaming TV services or magazines.
Review debt. If you carry debt, it’s important to evaluate whether you reduced your debts this year. If not, I would suggest making this a major priority for 2020. Nothing eats away at your future financial security as much. Not only are you paying interest on past purchases, you are also missing the potential gains from investing the money now going to pay your debts.
Rededicate yourself. If you set up a budget and a financial plan last year but fell short of implementing them, don’t beat yourself up. Use your experience from this year to improve your performance next year. Revisit your goals, draw up a budget and revise your financial plan, and rededicate yourself to following these guidelines in 2020. A certified financial planner can help you with any or all of these financial best practices.
Eric Tashlein is a Certified Financial Planner professional and founding principal of Connecticut Capital Management Group, LLC, 2 Schooner Lane, Suite 1-12, in Milford. He can be reached at 203-877-1520 or through connecticutcapital.com. This is for informational purposes only and should not be construed as personalized investment advice or legal/tax advice.