No one can predict the unexpected, but that doesn’t mean you can’t do your best to be ready. Preparing for life’s uncertainties is vital to your financial health, and you can take a few actions to strengthen your financial foundation to give you a peace of mind.
Review your portfolio
The end of the year is a good time to check your portfolio’s asset allocation and make sure your mix of stocks, bonds and other assets reflects a level of risk that fits with your goals.
Check your retirement accounts
It is also wise to evaluate your contributions to your retirement accounts as limits often increase annually. This can be a good yearly practice until you’re contributing the maximum amount allowable to an IRA, 401(k), 403(b) or their Roth counterparts. It may also be a good time to consider converting a portion of traditional retirement accounts to Roth. The tax advantages these accounts offer can help your money go further over time.
Confirm beneficiaries on your accounts
Now is also a good time to review and update primary and contingent beneficiaries on retirement accounts, group benefits and life insurance policies, as well as adding or updating transfer on death designations for investment accounts and payable on death designations for bank accounts. When minors are involved, it is wise to consider appointing trustees.
Evaluate your 2024 and 2025 budget
Finally, review your 2024 spending and update how you plan to allocate money for 2025 and beyond. Tracking your spending is a great way to see where your money is going and can help you prioritize those things that are most important to you and your family. This may include evaluating or planning distribution options from your retirement accounts to guarantee lifetime income.
These are just some of the things you can do at the end of the year, but it’s always a good idea to work with your financial advisor or tax attorney to make sure you are being smart about your finances throughout the year.
Joseph Edwin Funderburk uses 3D Wealth Management as a marketing name for doing business as a representative of Northwestern Mutual. 3D Wealth Management is not a registered investment adviser, broker-dealer, insurance agency or federal savings bank. Joseph Edwin Funderburk provides investment advisory services as an advisor of Northwestern Mutual Wealth Management Company® (NMWMC), Milwaukee, Wisconsin, a subsidiary of NM and a federal savings bank.
