The new year is a great time to reflect, revisit priorities and take actions — big and small — to help you stay on track to reach your financial goals.
Here are five smart actions to consider:
1. Evaluate any changes to your financial situation
Your financial situation can change a lot in a year. Maybe you are pursuing an exciting new financial goal, such as renovating a home or early retirement. Or perhaps you are dealing with more subtle lifestyle shifts that affect your cash flow, such as workplace benefit changes, the phasing out of childcare expenses or new car loan payments.
Whatever changes you are experiencing — positive or negative — please let us know. We’ll offer personalized recommendations to help you stay on track to achieve your financial goals considering your current situation.
2. Review your investment portfolio
2022 was a year marked by many market swings, both upward and downward. As such, your investment portfolio may have evolved to a different risk profile. Depending on your goals, this may mean you have too many stocks and too few bonds (or vice versa).
“Rising interest rates, tighter monetary policies, slowing global growth, heightened geopolitical tensions, and growing recession odds sapped investor sentiment in 2022 and weighed on stock and bond prices,” said Ameriprise Chief Market Strategist Anthony Saglimbene. “With higher interest rates expected to hold in 2023 and volatility likely to persist, now may be an opportune time to meet with your financial advisor to discuss ways to boost portfolio income and rebalance your portfolio.”
3. Confirm your beneficiary designations
A beneficiary is a person or entity, such as a trust or nonprofit, that you have designated to receive the assets in your financial accounts when you die. The named beneficiaries override the will you may have set up.
All financial accounts (regardless of size) should have beneficiaries named — and updated over time, as needed. Major life changes such as a birth, divorce or marriage are also good times to review your beneficiaries.
4. Assess your cash reserve
When a financial emergency arises, a cash reserve can help you pay for it and stay on track with your financial goals. Strive to keep three to six months of living expenses in a safe, liquid cash account. A savings account, money market deposit account or short-term certificate of deposit are good options to consider.
Because your cash reserve is the first line of protection against a financial setback, consider reviewing it annually to make sure that it fits your current needs. If you used some of your cash reserve recently or your circumstances have changed — higher expenses with a new child or a new job, for example — it’s worthwhile to replenish it.
5. Jump-start organizing your tax records
It's important to maintain quality records to support your income and expenses each tax season. As the April 18 deadline for filing 2022 federal tax returns draws closer, you will begin receiving tax documents from employers and other institutions.
Whether you file yourself or work with a tax professional, consider organizing this material earlier in the season to help minimize stress and stay on track for tax day.
Feel more confident about the year ahead
We’re committed to helping you stay on track to achieve your financial goals. Contact us to review your progress and investment portfolio. You can also track your goals and progress online — any time, from any device.