When the time comes to put a new calendar up on the wall, you have the opportunity not only to reflect on the year gone by but also to plan for the year to come.
You may be planning to send a child to college, purchase a new vehicle, take a family vacation, or go after a big promotion at work. With all the incredible experiences you have on the horizon, it can be easy to forget about those to-do list items that don't spark that same feeling of excitement as the goals themselves.
3 Things to Help Achieve Your Goals In The New Year
1. Increase the Amount You are Setting Aside for Your Goals.
One simple step is to increase the amount you are investing for retirement, college expenses, etc by 1% at the beginning of each year. For example - if you currently invest 4% of your salary into your 401(k), change your allocation to 5%.
Using this technique can have a big impact on your savings over time without much pain in the short term. Investing an additional 1% of a $6,000 monthly salary would mean putting an additional $60 per month into your investment or retirement account. Making this small change every year can add up to big results down the road.
2. Use All of the Tax-Advantaged Investment Accounts Available to You
Prior year Traditional IRA and Roth IRA contributions can be made all the way up until the tax filing deadline—April 18 this year. The same holds true for Health Savings Accounts. Don't miss the opportunity to save additional funds and decrease your future tax bills!
For self-employed individuals who want to maximize their annual contributions, Simple IRA salary deferrals can be made all the way up until 30 days following the end of their tax year. For many businesses, this results in a contribution deadline of January 30th. Each year has its own contribution limits, so contributions missed in one year cannot be made up later.
3. Revisit Your Goals
A navigation system will only get you where you want to go if you put in the correct destination. Your financial advisor should be like your navigation system, telling you which turns to take and which moves to make to get you where you want to go.
However, you have to make sure that your advisor is aware of where you want to go and when you want to get there.
Your financial plan should be ever-evolving - continuing to change as you navigate your ever-changing life.
Take some time in this new year to think through your goals and how they may have changed over the past 12 months. If your goals and time- horizons look different for 2022, then your financial plan should be updated.
As you look forward to the year ahead, take advantage of every opportunity available to improve your financial health and advance along your True Wealth journey. Make small changes, take advantage of time-sensitive opportunities, and revisit your future goals.
Accomplishing these tasks now can go a long way towards making 2022 (& beyond!) a huge success.
Sincerely,
Andy
Andy Anderson, CFP®