Welcome 2022

It is a new year and a great time to get financially organized. Here are a few items to put on your resolution list that can reap rewards for you in 2022!

Review your 401(k) and IRA allocations

This last year has been exceptional for the US stock market. Your holdings may have drifted farther than you anticipated from your original allocation. For instance, if you started 2021 with a 50% stock and 50% bond allocation, it is possible you could have ended the year with a 56% stock and 43% bond allocation! (To make this exercise very simple, I assumed you invested 50% in the S&P 500 and 50% in the S&P 500 Bond Index and did not make any changes or rebalances during the year. It also excludes dividends.) And if you have not rebalanced in several years, the drift could be even bigger. Rebalancing is critical to the long-term performance of your portfolio while not increasing your risk exposure.

Finally Do your Estate Planning

At the very least, if you do not have any estate planning in place, double check the titling and beneficiaries on all of your accounts for accuracy. If you were recently divorced or there was a death of a spouse, it is important to update your beneficiaries.

Review Insurance

At the minimum, take a moment to look at your life insurance and home insurance. With increased costs for construction, has your home insurance kept up with the cost to rebuild your home? Similarly, if your income and standard of living have increased in the last several years, do you have enough life insurance to protect your dependents?

Check your Credit Report

If it has been a while since you last checked your credit report, perhaps when you last bought a home, it is worth reviewing for accuracy and to protect against identity theft. I check mine for free at annualcreditreport.com.

Pay Off Debts

As interest rates rise, borrowing is likely to become more expensive. Make paying off debt with a variable rate, especially credit card debt, a priority.

Meet with a Financial Planner

If you are feeling overwhelmed or not sure where to start in organizing your financial life, reach out to a Financial Planner! A good Planner can help you get organized and achieve your goals. Financial planning is not just about money, it’s about creating a plan to get the most out of your life.

Book a call with me today to see if financial planning is right for you!