Financial success in 2017 begins today! Before the year-end, investors should take the following steps to organize and plan your financial future.
Review your goals.
The end of 2016 may bring you one year closer to retirement or sending your children to college—take the time to understand what you hope to accomplish with your investments. You are more likely to reach goals if they are defined clearly.
Check your asset allocation.
Review your total portfolio and ensure it’s in line with your financial goals. If your goals are short-term, your investments should be allocated in more stable assets—such as cash and bonds. If your goals are long-term, you may be able to take more investment risk in pursuit of higher returns. Even if your goals haven’t changed, you may need to rebalance your portfolio due to market changes.
Consolidate to simplify your life.
If you have a number of investment accounts—a 401(k) from a former employer, a small IRA or a 529 for a child who graduated two years ago, for example—it may be a good idea to consolidate all your accounts to a single advisor. Monitoring your investments will be easier, it may save you money on management fees and ensure a smooth tax time.
Review your investments.
It’s a good idea to get rid of any high-cost mutual funds you may be holding, as they tend to perform poorly in the future, and any funds that include sales and marketing fees that don’t improve investment performance. Look for recent management changes or long-term poor performance relative to the fund category.
Get rid of concentrations.
Watch out for concentrated securities or any single stock that makes up more than five percent of your portfolio. Ensure your portfolio is well diversified—all of your investments shouldn’t be concentrated in a single sector, such as technology or healthcare. Ensure you are diversified globally, as well.
Consider loss harvesting.
Year-end is a good time to consider tax loss harvesting. By selling securities that have decreased in value, you may be able to reduce the tax liability on other realized gains. When loss harvesting, ensure you’re not out of the market for too long—instead, invest the proceeds from the sale rather than holding cash.
Need to save more? Automate.
Meet your financial goals sooner by saving more each year—and the best way to ensure savings is to go automatic. Consider increasing your 401(k) contribution or set up an automatic deposit into your other investment accounts in 2017.
Start year-end planning today with the experienced professionals at Busey Wealth Management to get—and stay—financially fit throughout 2017 and beyond. Visit Busey at 312 E. Main St. in Mahomet, visit busey.com or call 1.800.67 l Busey.
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