5 smart actions for the new year


Father and baby daughter sitting at the kitchen table together on laptop

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. Review your financial goals and notify your advisor of changes

Perhaps you’ve decided to buy or renovate a home, pay for a grandchild’s college education or adjust your retirement date.

Whatever your new or updated goals are, communicate the changes with your Ameriprise financial advisor. They can offer personalized recommendations to help you stay on track to achieve your financial goals.

 

2. Review your investment portfolio with your financial advisor

With near-record stock valuations in 2021, 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).

“The combination of low interest rates and strong earnings growth has supported lofty valuations,” said Ameriprise Chief Market Strategist David Joy. “As those two begin to moderate, it will become more challenging for stock prices to move higher, which is why now may be an opportune time to meet with your financial advisor to discuss a portfolio rebalancing.”

 

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. Evaluate 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 2021 federal tax returns draws closer (April 19 for residents in Maine and Massachusetts), you 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 the tax day deadline.

 

Feel more confident about the year ahead

Your Ameriprise financial advisor is committed to helping you stay on track to achieve your financial goals. Contact them to review your progress and investment portfolio. You can also track your goals and progress online — any time, from any device.