Financial spring cleaning should be done once a year. Use these four tips to get started this year.
Rebalance investments annually: A good rule of thumb is to review all investments annually and look at the asset allocation and rebalance the accounts. This can help reinforce the long-term strategy of buying low and
selling high and help maintain diversification. Ask a financial professional for a review or use online tools from sites like www.morningstar.com for an investment analysis.
Check into new or expiring law changes: The Bush-era tax cuts are set to expire at the end of this year. It is our opinion that tax rates will go up in the future. Thus, for many of the people we are talking with right now we are discussing Roth IRA strategies.
One strategy involves making contributions into Roth IRAs. Income limitation could come back into effect next year, making this a great year for high income earners to look at this option. Other times, a Roth conversion strategy can make sense for current retirement accounts. The main advantage for investors is they can pay taxes now versus later, which could be at a higher rate on what could be a higher balance.
Dust off old policies: Old life insurance policies can be another great area to review. More competition and longer life expectancies have driven down the cost of insurance at most insurance companies. Doing an insurance policy review can be an eye-opening experience on how offers vary from one company to the other.
Update documents: New grandchildren, a loss of a loved one, a marriage — you name it, life changes occur all of the time.
As life changes occur, not only is it important to make sure your legal documents, like wills and trusts, are up to date, it is important as well to make sure beneficiary designations get
updated. Accounts such as retirement plans, life insurance policies and annuities should contain named beneficiaries. If these accounts do not get updated as life changes occur an account owner’s assets may not be paid out the way the owner thought.
Make any changes necessary and make sure the changes have been acknowledged in writing.
For more information about The Retirement Guys, tune in every Saturday at 1 p.m. on 1370 WSPD or visit www. retirementguysradio.com. Securities and Investment Advisory Services are offered through NEXT Financial Group Inc., Member FINRA / SIPC. NEXT Financial Group, Inc. does not provide tax or legal advice. The Retirement Guys are not an affiliate of NEXT Financial Group. The office is at 1700 Woodlands Drive, Suite 100, Maumee, OH 43537. (419) 842-0550.
