- The new year can inspire a fresh look at your financial picture.
- Review your portfolio, confirm beneficiaries and evaluate your cash reserve.
- Periodic reviews in these areas can help keep you on track and provide greater peace of mind.
If the new year has you reflecting on goals and what’s ahead, it’s a good time to also review your financial priorities. Here are three areas to consider:
Review your investment portfolio
Your portfolio should always reflect your financial goals, time horizon and risk tolerance. Have any of those elements changed in the past year?
If so, schedule a review with your financial advisor. Just as the stock market can change over time, so can your goals and comfort with risk. In addition, throughout market cycles, your asset mix may drift away from your original targets, which were selected to support your financial goals. Your Ameriprise financial advisor is a knowledgeable resource to help you remain on track over time and make adjustments when your goals and needs change.
Confirm your beneficiary designations
A beneficiary is a person or entity, such as a trust or non-profit, that you designate to receive the assets in your financial accounts when you die. Beneficiaries named on your financial accounts override your will. For that reason, it’s important to keep your information up to date, especially after a major life change such as a birth, divorce or marriage.
Designating beneficiaries could be considered an act of kindness for your loved ones. It allows your assets to transfer outside of probate, a court process that is both time consuming and costly. Periodically review your designations and communicate your plan to heirs.
Evaluate your cash reserve
When a financial emergency arises, a cash reserve can help you pay for 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, you should review 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 aging parent, for example — it’s worthwhile to replenish it.
Feel more confident about the year ahead
Your Ameriprise financial advisor is committed to help you stay on track to achieve your financial goals. Contact them to review your goals, progress and investment portfolio.