Three Reasons Why Summer is a Great Time for a Mid-Year Review

Louis DeCuir |

Summer is a great time to meet with your financial professional to ask questions, review policy and portfolio performance, and make decisions that can help keep you on track with your goals. Regardless of your age, scheduling your financial review mid-year gives you enough time to implement changes before the year ends. Here are some items that may require your attention this summer:

Reason #1- You may be paying too much or too little in personal income tax 

The first thing to evaluate is whether the correct amount of taxes is being withheld from your paycheck each month. If you are an employee, the IRS withholding calculator can help you determine whether you need to update Form W-4, the Employee's Withholding Allowance Certificate, to avoid having too much or too little Federal income tax withheld from your pay. Use the results from the calculator to help fill out the form.

Although examining and updating your W-4 is a great start, there are a few more ways to save on personal taxes that you may want to consider:

  • Save more into a pre-tax-sheltered retirement savings account.
  • Fully fund or increase your contribution into a flexible spending account (FSA) or health savings account (HSA)
  • Determine if you’re eligible for the earned income tax credit (EITC)
  • Donate money to a charitable cause.

Reason #2- Your portfolio may be out of sync with your financial plan

It may be some time since you have reviewed your financial plan with your financial professional. Common areas include:

  • Allocations- Is your portfolio too heavy in one asset class? With today’s volatility, rebalancing and adding another asset class like annuities may help balance portfolio allocations to align with your goals. Work with your financial professional to determine if annuities are a suitable investment for you.
  • Risk Tolerance- Are you taking too much risk or not enough? Changing jobs, being furloughed, or contemplating early retirement can affect your risk tolerance.
  • Performance- Reviewing your fund, stock, and cash performance can help determine a future strategy. Although future performance is not a guarantee, you and your financial professional can plan for any market condition.
  • Taxes- Your tax professional and financial professional may suggest extra contributions or other tax-savings strategies for lowering your taxable income for 2021 after your fall review.  

Reason #3- Your need for life insurance and policy information may have changed.

Reviewing your insurance mid-year is essential for many reasons. With all the changes in our lives, there is no better time than now to have a life insurance review.

Death Benefit Amount- Have you acquired more debt, retired, or had assets increase in value? Review each policy to ensure it will provide enough death benefits to cover all your beneficiaries' financial needs. If you have a large estate, ensure the death benefit will offset estate taxes.

Additional Policies- Was there a new family member born or did families combine this year? Life Insurance can benefit your new family members in future years. Consult your insurance professional to add policies for additional family members.

Beneficiaries- Do you need to change your beneficiary information? For example, has there been a marriage, divorce, or has anyone had a name change? Update all beneficiary information with full names and include their social security numbers to ensure the death benefit pays quickly to your beneficiaries.