Financial To-Dos for Year-Round Healthy Wealth

by Blake Herzog

If you’re looking at the bottom line of your bank accounts and investments and as if things are going pretty well, first of all, let yourself be thankful for that feeling.

Second, dig into the numbers you have and make sure your financial present and future really are as secure as you think they are, given the short- and long-term challenges you could face. Some of the questions you should ask are:

As we reach the end of 2021, here are a couple to-dos so you can start the next year on firm financial ground:

* Do you have enough cash to put aside in a savings account or short-term CDs to cover three to 12 months of expenses? This is critical for protecting yourself against unexpected job losses or medical bills. Try to save even more if you’re working in a field where job openings are few and far between.

* Know how much you want to save for retirement; many experts suggest saving 10 times your annual income. The number depends a lot on what kind of lifestyle you want to have once you are done working.

* Look into every type of retirement savings account available to you, whether it’s a 401(k) plan at work, an IRA (either traditional or the Roth version) or whichever product works best for your future.

* Don’t be shy about putting some of your savings in the stock market where it’s likely to multiply faster and further than most savings accounts, at least for the immediate future.

* Carry all the insurance you’re going to need, including life, health, home and vehicle.

* Consider the impact of any major life, work or net wealth changes on your taxes and insurance coverage. Even a large appreciation in your home’s value, not an uncommon position to be in this year, could affect how much home insurance you need.

* Reassess your investment portfolio to make sure it will continue to agree with your risk tolerance and future goals.

* Seek financial advice about “inflation hedge” investments such as government inflation protected bonds and CD ladders to see how they may benefit you.

Calling a professional

You may need an attorney to help ensure your estate documents are binding, and there are certainly other situations where bringing in either a wealth manager or financial adviser would be a wise move:

* If you’re experiencing or planning a major family life change such as parenthood or divorce. Even couples seriously dating may want to drop into an office to get a sense of where they stand on financial issues, which have doomed many a relationship.

* You’re seeing a rapid increase in your wealth through a job change, inheritance or other means. An adviser or manager can make sure the influx of cash isn’t being overspent and is being invested wisely and managed for tax purposes.

* If retirement is on your horizon, or already here, a specialized planner can help you figure out what your goals for that phase of your life are and what steps you need to take to achieve them. Some of the planners you consider may boast a retirement-specific credential after their name, but make sure it’s one with teeth that isn’t that easy to earn.

* If you have too many investments to be able to monitor each one closely, or if you have little interest or aptitude in tracking the money you spend or invest, bringing in an adviser can be an especially good idea.