• peninsulawealth

Financial Tips to Start the New Year Off on the Right Foot

Updated: Mar 3



Happy 2020! With the start of the new year, we’re sure many of you are thinking about how you are going to achieve your New Year’s resolutions. Whatever goals or aspirations you have set for yourself, we thought it would be great if we helped by providing 7 tips/resolutions to get you closer to achieving all of your financial goals. If they are not already on your list, we encourage you to add them!


1. Set, Prioritize, and Plan for Your Financial Goals


Before any plan can be made, you need to know what is important to you and what exactly you are saving for. This involves defining and planning for short-term cash needs, large expected expenditures, and what you have your sights on for the long-term. The benefits of planning sooner rather than later are that you will not have to resort to a less than favorable last minute solution if you are left with a shortfall when expenses arise and it helps you stay on track for the longer-term goals.


2. Create a Budget and Be Aware of Your Spending


A budget will make you more aware of what you are spending your money on, so you can more easily recognize unnecessary expenditures, and in turn save more towards your goals. Budgeting can also help you reduce or more quickly eliminate debt, which can save you money in interest and penalties – which may seem small now, but can add up over time!


3. Increase / Maximize Your Retirement Savings


The contribution limits for IRAs and 401(k)s typically increase annually, so make sure that you adjust your contribution amounts accordingly. For 2020, the annual contribution limit for IRAs and Roth IRAs is $6,000 and $7,000 if you are 50 or older, and for SEP-IRAs the maximum contribution amount is $57,000. The 401(k) contribution limit for 2020 is $19,500, and the catch-up limit is $26,000. Also, see if your employer offers the option to make Roth 401(k) contributions. This can allow you to save even more towards retirement - maximum $57,000 combined or $63,500 for workers who are 50 or over.


4. Evaluate Your Insurance Coverages


This includes your auto, homeowners, and life insurance policies. Not only is it a good idea to compare the cost of your policies with that offered by other carriers, but it is also important to regularly review your coverages to ensure they are sufficient for your needs and are aligned with your goals.


5. Assess Your Financial Plan and Investment Allocation


Commit to sitting down with your financial advisor for an assessment of both your short-term goals to ensure you have cash available but to also provide updates for any longer-term goals to ensure that any necessary rebalancing can take place. Also, outside of any updates to your plan, take the time to think about and consider your current investment allocation to make sure that you are personally comfortable with the risk, so that you can continue to stay on track for your goals.


6. Evaluate Your Employee Benefits


Open enrollment for benefits has already passed for many of us, but do you truly understand your coverage and all of the options available to you? Or have you merely just kept the same insurance you have had in place for years just because it seems ok? Now is a great time to evaluate the choices your employer offers you to see if you are paying too much out of pocket for your health, dental, life and disability insurances. Could you be better off shopping for these products on the open market? In addition to insurance, are you aware of the other benefits your employer might be offering you such as pre-tax commuter accounts and legal plans. Some benefits can sound similar, such as an HSA (Health Spending Account) and an FSA (Flexible Spending Account) have numerous important differences. Do you fully understand what the similarities and differences are?


7. Review and/or Complete Your Estate Plan


This involves numerous items including reviewing your account beneficiaries, update or create your trust, coordinate asset titling with the rest of your estate plan and get your health care directive and durable power of attorney in place. Both your financial advisor and estate planning attorney are good resources to connect with to discuss these items. Make this the year that you get your estate plan in order.


8. Be Prepared for Tax Filing


Make sure that you keep an eye out for the investment tax documents that will start coming your way at the end of the month and accumulate any other tax information to make filing as least stressful as possible. Also, for the upcoming tax year, check your tax withholding if you didn’t so in 2019. It is very easy step you can take to avoid tax surprises down the road.


With these 8 steps, you’ll be primed for a great financial year! Be sure to include your financial planner in any changes you make to ensure that your plan is aligned with your overall goals and strategy for the year!


Contact the Peninsula Wealth Team for a free consultation to begin building a financial and investment plan customized to your goals.






Office Address: 350 Townsend Street, Suite 411, San Francisco CA 94107 | P: 415-678-5360 | Email: team@peninsulawealth.com

 

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