What Issues Should I Consider at the Start of the Year?
What Issues Should I Consider at the Start of the Year?
The beginning of the year is the ideal time to reset, reassess, and refocus your financial plan. This checklist covers the full range of year-beginning financial planning tasks—from reviewing last year’s progress to setting contribution rates, evaluating tax opportunities, and preparing to file your return.
Personal and Goal Issues
- Assess your progress toward financial goals from last year. Compare your current position to a year ago and identify what worked.
- Identify new goals for this year or the future. Assign priority and time horizons and incorporate them into your overall plan.
- Identify any significant life events likely to occur this year (move, marriage, birth, job change, retirement, illness). Plan accordingly.
- Check whether you or any family members will reach a milestone age this year. Reference the “Important Milestones” guide for age-triggered rules.
- Consider any variables or circumstances that could impact your plans.
Cash Flow Issues
- Review your cash flow plan. Evaluate actual income and expenses from last year and adjust your spending plan as needed.
- Review employee benefits. Are you maximizing contributions to your 401(k), HSA, FSA, and Dependent Care FSA?
- Consider IRA contributions. Determine whether a Roth IRA, deductible traditional IRA, or after-tax traditional IRA contribution is most appropriate based on your eligibility.
- If your spouse doesn’t have earned income, explore spousal IRA options.
- Review your target savings rates. If you fully fund some goals early in the year, shift focus to other goals.
- Spend FSA funds from last year before the grace period expires.
- If you take RMDs (including inherited IRAs), plan the timing. If age 70½ or older and charitably inclined, consider a QCD. Review withholdings.
- If you make annual gifts, plan funding strategy and track use of the $19,000 annual gift exclusion per donee.
Asset and Debt Issues
- Replenish or adjust your emergency fund.
- Consider any planned purchases or sales of business, personal, or real property.
- Review investment risk tolerance and performance.
- Rebalance your portfolio and adjust asset allocation. Consider tax consequences before trading. Revisit any short-term positions taken last year for tax purposes.
- Review asset location across accounts—hold tax-efficient investments in taxable accounts and tax-inefficient investments in tax-preferred accounts.
- Consider mortgage refinancing if rates are favorable.
- Target debt elimination, prioritizing those with the least favorable terms.
- Review your credit report and score. Consider freezing your credit if needed.
Tax Issues
- Collect tax forms and begin organizing documents for your prior-year return. Use last year’s filings or a tax organizer as a guide.
- Determine whether you made taxable gifts last year and collect documentation for Form 709.
- Evaluate whether Roth conversions would be beneficial this year while in a potentially lower bracket.
- Make a prior-year IRA contribution if you missed it—you have until Tax Day.
- Review taxable account investments for upcoming capital gain distributions. Consider selling in advance if advantageous.
- Review unrealized gains and losses and establish a harvesting strategy for the year.
Insurance Issues
- Review life insurance coverage for adequacy.
- Assess disability insurance needs.
- Explore or review long-term care insurance.
- Update property insurance if you’ve made improvements or acquired new valuables.
Legal Issues
- Review your estate plan for any needed updates.
- Review asset titling and beneficiary designations.
- If serving as a fiduciary (executor, trustee), review your duties and performance. Consider whether a 65-Day Rule distribution is appropriate for irrevocable trusts.
- Evaluate the impact of any new laws (including OBBBA or SECURE 2.0) on your financial plan.
- Review any contracts or agreements that expired or went into effect.
- If you own a business, review any planned changes for the year.
Download the Year-Beginning Financial Planning Checklist
Get the complete checklist with yes/no prompts across every financial planning category—personal goals, cash flow, assets and debt, taxes, insurance, and legal. Use it with your advisor at your first meeting of the year.
DOWNLOAD THE CHECKLIST