By Diana Palmieri
Your “service engine soon” light goes on in your car. What do you do? You take it to your mechanic or the dealer to check out what’s wrong. It might just be an “idiot light” that illuminates; however, your car is telling you it’s a good time to get everything checked out under the hood. Fluids, belts, perhaps a tire rotation is in order. Same goes for your personal financial planning. Have you looked under that hood lately?
Life is busy. Things change. This is all the MORE reason to do an annual financial checkup. You may have changed jobs, received an inheritance, bought a house, added to your family, your child is in the first year of college, you or a family member may have lost their job. These events are milestones in your life that require attention and careful planning.
Aside from a financial advisor, your tax preparer is also a good place to start looking under your hood. There are some tax laws that could affect you and your family. Inheritances, having a baby, and buying a house come with certain tax advantages (and maybe some consequences). Your tax preparer might be able to advise you and help you to take advantage of health savings accounts, contributing to an IRA account, increasing contributions to an employer-sponsored plan such as a 401k, or maybe even starting a 529 plan. Ask questions, and get the most out of your money.
Also really take a look at your account statements. Too often we become complacent in our investments. Yes, investing should be for the long term, depending on where you are in your life. But there are a lot of world events that go on that could adversely affect your investments. Within the past few months, we’ve seen a rather precipitous drop in oil prices, Switzerland changed its monetary policy, parts of Europe could be falling back into a recession, and China may be growing a little less than some analysts may have anticipated. World events seem to affect our markets more nowadays. It’s not that you should be scared, cash out, and stuff everything in your mattress. You just need to be aware and review these statements in detail at least annually. Assess the time horizon and risk factors in your portfolio.
I am sure you really don’t want to wake up 20 or even 30 years from now staring retirement in the face and wondering what you could have done differently. So take the time to write a list, meet with your advisor or tax preparer, and take action now. Once a year, taking a couple of hours of time (between the advisor and tax preparer) is not too much to ask. Financial planning is not something you do once and set aside; it is an ongoing priority that always should be integrated with life changes.
Diana Palmieri is dually registered with Vanderbilt Securities LLC and H Beck Inc., which are unaffiliated. Securities offered through Vanderbilt Securities LLC, member SIPC/FINRA/MSRB.
