January 6, 2025

Financial Resolutions for 2025: A Guide to Long-Term Confidence

The start of a new year is the perfect time to refocus on what truly matters. Instead of setting short-lived resolutions, consider prioritizing your financial well-being—an area that can provide long-term benefits and peace of mind. This guide offers practical steps to help you strengthen your financial foundation and plan confidently for the future.

1. Keep Beneficiary Designations Current. Ensuring your beneficiary information is accurate and up to date is essential for protecting your legacy. Without proper documentation, your assets may be distributed based on federal or state laws rather than your wishes.

  • When to update: After major life events like marriage, divorce, the birth of a child, or relocating to a new state.
  • What to review: Wills, life insurance policies, IRAs, 401(k)s, annuities, and any accounts affecting your heirs.
  • Points to consider:
    • Have you accounted for the possibility of a beneficiary predeceasing you?
    • Does your plan address scenarios such as simultaneous death with your spouse?
    • Have recent tax law changes affected trusts or estate plans?

Consulting an estate attorney can simplify these complexities and ensure your plans align with your intentions.2. Ensure Financial Flexibility with Liquidity. Balancing liquidity is crucial to navigating unexpected expenses without disrupting long-term investments. Having accessible funds can prevent financial strain while maintaining your overall strategy.

  • Options to explore:
    • Cash reserves or cash alternatives
    • Highly liquid securities
    • Lines of credit or margin loans
    • Structured lending solutions
  • Pro tip: To maximize FDIC insurance coverage, consider holding funds at multiple institutions when balances exceed $250,000.

3. Assess Your Retirement Plan. Retirement planning is an ongoing process, not a one-time task. Regularly evaluating your plan ensures it remains aligned with your goals and adapts to changes in your lifestyle or the market.

  • Key elements to review:
    • Types of investments and their performance
    • Expected cash flows and contingency plans
    • Inflation rates and assumed rates of return
    • Time horizons and longevity projections

Fine-tuning these components with your advisor can keep you on track for a secure retirement.4. Review Account Titling for Accessibility. Improper account titling can lead to complications, especially in cases where one partner passes away. Ensuring that accounts are titled correctly can streamline access and avoid unnecessary legal hurdles.

  • Steps to take:
    • Confirm account ownership aligns with your estate plan.
    • Evaluate the need for joint accounts to provide access for a surviving partner.
    • Understand how titling decisions affect Medicaid eligibility and borrowing capacity.

5. Create a Strategic Charitable Giving Plan. Philanthropy is rewarding, but it can also provide tax advantages when approached strategically. A well-thought-out giving plan can maximize both your impact and your tax savings.

  • Ideas to consider:
    • Donating appreciated stocks instead of cash to reduce capital gains taxes.
    • Establishing a donor-advised fund for a consolidated tax deduction on multi-year contributions.

Working with your advisor can help you identify the most tax-efficient ways to give.

6. Organize and Digitize Financial Records. Streamlining your record-keeping process can save time and reduce stress. Going paperless and centralizing your files ensures easy access when needed.

  • Steps to take:
    • Transition to electronic statements and reports.
    • Use secure storage tools, such as those offered by your advisor, to manage important documents.

7. Foster Open Family Discussions About Wealth. Building a shared understanding of your family’s financial vision is essential for sustaining wealth across generations. Open communication ensures alignment and prepares future generations for their roles in managing family assets.

  • Where to start:
    • Create a family mission statement outlining your values, financial goals, and legacy plans.
    • Discuss nonfinancial topics like life lessons, expectations, and guiding principles.

8. Align Investments with Personal Values. Your investments should reflect your priorities and principles. A values-driven portfolio can make a positive impact while achieving your financial objectives.

  • Approaches to consider:
    • Avoid industries or practices that conflict with your values.
    • Embrace ESG (environmental, social, governance) investing to support causes like renewable energy, workplace diversity, or data privacy.

9. Schedule Regular Check-Ins with Your Advisor. Open communication with your financial advisor is key to staying on track. Regular updates ensure your plan evolves alongside your life and goals.

  • Tips for effective communication:
    • Share major life events and anticipated changes.
    • Establish a consistent meeting schedule for the year ahead.
    • Ask about tools or resources that can enhance your financial strategy.

Final Thoughts

These resolutions can provide a roadmap for improving your financial health in 2025, but every individual’s journey is unique. For tailored advice, reach out to your Wealth Advisor to create a plan that’s right for you.

Important Disclosures:  Investing involves risk, and strategies may not be suitable for all investors. Consult with your Wealth Advisor to determine the best approach for your situation. Donors should seek guidance from attorneys or tax professionals regarding the deductibility of contributions and other tax implications. Always consult appropriate professionals for assistance with tax or legal matters.

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