Eight Financial To Do Items for the Rest of 2014


We are nearing the final third of 2014.  Labor Day is upon as is the start of the 2014 football season.  College football starts this weekend.  Next week my beloved Packers start their quest for the Super Bowl against the Seahawks.  Kudos to the Little Leaguers from Jackie Robinson West, Chicago’s best baseball team by far.

Though most of 2014 is behind us there are still plenty of things left to do financially in 2014.  Here are eight financial to do items for your list.

Review your 401(k) 

With the S&P 500 and other market indexes at or near all-time highs this is a good time to revisit your 401(k) asset allocation and to rebalance if needed.  Better still why not take this time to active the auto-rebalance feature if your plan offers this feature?

Are you on-track to contribute the maximum to your 401(k) this year?  If you are not there is still time to increase your salary deferral if you can afford it.  The maximum contributions are $17,500 and $23,000 if you will be 50 or over at any point during 2014.   Even if you can’t contribute the maximum amount this is still a good time to bump your deferral if you can.

Prepare for employee benefits open enrollment 

Open enrollment has always been important.  But with the advent of Obama Care and the efforts of many employers to rein in health insurance and all benefits costs, it is more important than ever to manager your employee benefits as an important part of your overall compensation.

I suggest reviewing your usage year to date.  Once the materials are issued for your employer’s open enrollment be sure to review them carefully with an eye towards any changes in various benefits.  You can then look at your current usage and anticipated changes in your personal circumstances in combination with the new benefits menu to make the best choices for you and your family.

Also note that many organizations use this time frame to roll out any changes in the 401(k) menu or other changes in the plan so keep an eye out for that as well.

Update your estate planning documents 

The recent deaths of celebrities such as Robin Williams and Lauren Bacall remind us of our own mortality.  If you don’t have a will, a named guardian for your minor children, or other estate planning documents as appropriate for your situation it is time to get moving and get this done.  The cost of being unprepared can be devastating to your family and loved ones and can frankly distort their memories of your life.

Along these lines also double check your beneficiary designations on retirement accounts, life insurance policies, annuities and other assets that pass via beneficiary designation to ensure that they are consistent with your intentions.

Get a retirement plan in place if you are self-employed 

I’ve mentioned this here on the blog on several occasions, but it’s worth repeating.  If you are self-employed you need to have a retirement plan in place for yourself.  You work too hard not to do this.

Options to consider include a SEP-IRA, a Solo 401(k), a SIMPLE, or even a pension plan.  If you do not have anything in place some plans such as the Solo 401(k) must be established by the end of the calendar year though you can fund them up to the time you file your tax return.  Check the rules for any plan you are considering.

Don’t forget an IRA as well.  If your ability to contribute is limited this can be a great way to start.

Check your Social Security statement 

The Social Security Administration has indicated that if will begin mailing out statements again after halting this practice several years ago.  Make sure to review your statement to be sure that you have received credit for all years worked and that you understand all of the benefits shown on your statement.  You can also go their site to check your benefits as well. 

Track down old pension and retirement accounts 

As we move through our careers many of us will switch jobs a number of times.  It is quite common to leave a number of retirement accounts, both 401(k)s and pensions in our wake.  It is a good idea to take some time to make sure we are aware of all of these old accounts.

In the case of an old 401(k) or similar defined contribution account make a decision as to what to do with the account balance.  You can typically leave it where it is, roll it to a new employer’s plan if allowed, or roll it over to an IRA.  If it is a relatively small amount in relation to your other retirement and investment accounts it might make sense to consolidate with other money so you have one less account to keep track of.

In the case of a pension you may have a few options.  At the very least you will want to ensure that your old employer has your current contact information and you will want to apprise them of any changes in the future.  You may have an option to take the benefit as a lump-sum and roll it into an IRA or to receive a monthly benefit at some point in the future.

While old retirement accounts might seem small and insignificant, I’ve seen more than a few folks with several of them floating around.  At some point this can become real money if you add it all up. 

Review your investments and your strategy 

With the markets at or near record highs this is a good time to review your investment holdings, your overall asset allocation, and your strategy going forward.

If you hold stocks how have they done?  Are any of them at or near your selling price target (you have one right)?  Is your allocation to stocks higher than your target?  Are you now taking more risk than you desire?  Have portfolio gains pushed you closer to your financial goals and is it time to take less risk?

Get a financial plan in place or update your current one 

Have you done any financial planning?  If not, no better time than the present.  Whether you are early or mid-career or in the home stretch toward retirement a financial plan prepared by a competent, fee-only financial advisor can help you focus in on your goals and on strategies to achieve those goals.  If you have a plan in place this is a good time to review and if needed update your plan.  NAPFA has published this excellent guide to choosing a financial advisor.

With summer soon behind us and the end of the year approaching this is a great time to get your financial house in order.  What are you waiting for?

Check out the 2015 version of this post Financial Planning Steps for the rest of 2015.

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Originally posted at https://thechicagofinancialplanner.com/financial-to-do-items/

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