Here is a set of resolutions that can help with your long-term financial confidence.
- Update your beneficiaries
if you don't correctly document your beneficiary designations, who gets what may be determined by federal or state law, or by the default plan document used in your retirement accounts. When did you last update your designations? Have life changes (divorce, remarriage, births, deaths, state of residence) occured since then?
- Create flexible liquidity
Cash has inflation and opportunity tradeoffs, but a lack of access can cause greater problems if you find yourself needing to draw from your investments. Finding a balance in line with your life and goals is important to avoid disrupting your long-term plans.
The right liquidity strategy will be different for every investor and could incorporate case reserves, cash alternatives, highly liquid securities, lines of credit, margin loans or even structured lending. Multiple institutions and account owners can be used more than $250,000 with FDIC guarantees.
- Evaluate your retirement progress
What changes are needed given your current lifestyle and the market environment? Don't fixate solely on your assets' value - instead, drill down into what types of securities you hold, your expected cash flows, your contigency plans, your assumed rate of return, inflation rates and how long you're planning for. Retirement plans have many moving parts that must be monitored on an ongoing basis.
- Review your account titling
Haphazard account titling can create problems down the line. If one partner dies and an account titled only in their name, those assets can't be readily accessed by the survivor. The solution may be creating joint accounts, but it's not always that simple. Titling has implications across a range of estate planning issues, as well as other situations such as medicaid eligibility and borrowing power, too.
- Develop a charitable strategy
Giving comes from the heart, but you can also do well when doing good. For example, consider whether it would make sense to donate low-basis stocks in lieu of cash, or learn about establishing a donor advised fund to take an upfront deduction for contributions made over the next several years. Give, but do so with an eye toward reducing your tax liability.
- Spark a family conversation
Sustaining the benefits of wealth for generations is nearly impossible without a mutual understanding among family members. Consider creating a family mission statement that outlines the shared vision for your wealth and legacy. This can include nonfinancial topics, too, like your values, expectations and important life lessons
- Digitalize your record keeping
You likely receive emails, letters, reports and updates from multiple accounts. Consider going paperless and centralizing important files in one place to reduce frustration and ensure easy access when needed.
Your portfolio should reflect what matters to you - and that can mean anything from avoiding industries to actively pursuing an ESG (environmental, social and governance) investing approach. So, whether you want to promote the transiition to clean energy, advocate for diversity and inclusion in the workplace, or support companies with strong data privacy practices, your portfolio can be tailored to reflect those priorities.
- Check in with your advisor
Your advisor can offer specialized tools, impartiality and experience earned by dealing with many market cycles and client situations. Communicate openly about what is happening in your life today and what may happen in the future. It is difficult to manage what they aren't aware of, so err on the side of over-communicating and establish a regular checkk-in schedule of the year ahead.
These suggestions are a helpful starting point, but no two long-term plans are identical - so reach out to your advisor for more specific guidance about progressing toward your goals in 2023.