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It’s A New Year! Is It Time To Reevaluate Your Financial Plan?

It’s A New Year! Is It Time To Reevaluate Your Financial Plan?

| January 21, 2021
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Where do you begin your journey to financial independence? The beginning of a new year is as good a time as any to start! Even though 2021 holds plenty of uncertainty, you can still take control of your finances and make progress toward your goals. Take the fresh start of the new year to reevaluate your financial situation, make some decisions, and start making your ideal financial future a reality. Here are some areas to keep in mind as you review and assess. 

Tax Strategy Planning

In the wake of a major election and a change in administration, questions naturally arise about how tax laws could change and how that will affect your wallet. If tax rates increase for your tax bracket, you may want to shift some of your savings allocations to tax-deferred vehicles such as a 401(k) or a traditional IRA. The recent stimulus bill contains several tax law changes, including the ability to roll forward unused FSA funds from 2020, (1) 100% deductible business meals, and penalty-free retirement plan withdrawals for families affected by declared disasters. (2) Because of how often new tax legislation is introduced, tax planning is not a one-and-done deal. Revisit your plan to make some shifts that will help you in the long run. 

Tracking Retirement Funds

While we know better than to obsess over daily market movements, it’s also important not to adopt a “set it and forget it” approach with your investments. Staying proactive with your cash flow and retirement funds can help you avoid financial blind spots and get yourself into a situation that’s difficult to remedy. If you have not kept track of your investment accounts, retirement plan balances, and other assets, commit to start keeping a pulse on the health of your family’s finances at least once a quarter, if not monthly, to make sure you’re still on track toward your goals. 

Insurance Coverage

Inadequate insurance coverage is a common issue that can derail retirement plans, especially in the event of unforeseen health problems or injuries that force individuals to retire early. A 2020 study found that only 54% of Americans have life insurance, and 40% of policyholders reported that they wished they had bought coverage sooner. (3) Life insurance policies are not all created equal, and many policies offer living benefits that you can draw on if you need help paying medical bills or other expenses. It’s prudent to make sure you have the proper policies and coverage for your unique situation.

Estate Planning

Regularly reviewing your estate plan is a crucial component of your financial strategy. Life moves quickly, and it is all too easy to forget how much can happen in a short period of time. Arrivals of new children or grandchildren, health conditions, asset purchases or liquidations (such as buying a new home), marriage/divorce, retirement, unemployment, remarriage, and deaths in the family can make a significant impact on the big picture of your estate plan. 

We’d Love To Help

Your life doesn’t stay static; neither should your financial plan. Life happens and seasons change, and your plan must keep up. If you are ready to reassess your long-term goals or would like to discuss how to build a solid foundation for your future, we at Bridgerland Financial are here to help. Schedule an appointment online or reach out to us at david.packer@bridgetoretire.com or (435) 535-1630. We look forward to hearing from you soon!

About David

David Packer is founder and financial advisor at Bridgerland Financial, an independently managed financial firm in Utah. With 20 years of industry experience, David serves his clients by helping them bridge the gap between their working years and their retirement. He provides tailored, comprehensive financial plans to his business owner and individual clients so they can retire with confidence. David has a bachelor’s degree in finance and holds the Chartered Retirement Planning Counselor℠ (CRPC®) credential. Outside of the office, David loves to spend time with his wife and five kids and stay involved in his community. He currently serves on the board of directors of the Cache Valley Chamber of Commerce. He and his wife, Melonie, spent years as foster parents and eventually adopted their foster children. David loves playing and watching all kinds of sports, including officiating high school sports, and won’t turn down a good board or card game. Learn more about David by connecting with him on LinkedIn. You can also register for his recent webinar, “What We Do & How We Help” here.

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(1) https://www.marketwatch.com/story/covid-relief-bill-will-let-fsa-money-roll-over-into-2021-a-win-for-parents-and-those-with-live-in-elderly-loved-ones-11608825806#:~:text=Workers%20could%20set%20aside%20up,year%2Dend%20or%20be%20forfeited.

(2) https://www.journalofaccountancy.com/news/2020/dec/tax-provisions-in-covid-19-relief-bill-ppp-and-business-meal-deductibility.html

(3) https://www.policygenius.com/life-insurance/life-insurance-statistics/

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