Thoughtware

Article 09/28/2018

Five Steps for Strengthening Your Financial Plan

Presenters/Authors
CFP®
Mom, dad and daughter watching TV

October is National Financial Planning Month, which is a perfect time to evaluate your personal financial plan and consider strategies to strengthen your approach. Taking steps to make better financial decisions doesn’t need to be complicated or expensive. Here are five steps we recommend taking to help improve your financial life.

  1. Take full advantage of your 401(k) match at work. One study suggests that Americans leave $24 billion in unclaimed 401(k) company matching contributions on the table each year. This is “free money”—make sure you’re getting yours. Contribute enough each pay period to collect 100 percent of the match offered by your employer.
  2. Review your investment accounts at least once a year. Rebalancing forces you to sell investments that have risen in value (sell high) and put the money into investments that haven’t performed as well (buy low). Over time, this disciplined approach can help you remain in line with your risk objective. This is particularly important following long periods of positive stock market returns, when you may find yourself with more stocks in your portfolio that can lead to more risk than anticipated.
  3. Make a thoughtful choice on when to begin taking Social Security benefits. More than 50 percent of retirees start collecting before they’re eligible for full benefits, locking in a lower benefit for the rest of their lives. Of course, there are some times when taking benefits early makes sense. However, be sure to look at all your options before making this irreversible decision.
  4. Watch your spending. One of the biggest obstacles to reaching a comfortable retirement often is the result of overspending before retirement. As our income increases, we tend to increase our spending at the same rate. This makes it more and more difficult to save enough to maintain the lifestyle to which you have become accustomed through your golden years. A simple solution is to save at least half of any pay increases, whether from raises, promotions or new jobs. Think about it—you were living comfortably before the new money arrived. Enjoy some, but save some as well.
  5. Make sure you have enough life insurance. While this will require some cost, it may be the best money you can spend. Premiums for term life insurance are very affordable considering the peace of mind they provide. Besides, life insurance could make a massive difference to your family if the unthinkable should happen.

Your financial plan should be unique to your situation—there are no off-the-shelf solutions. Your plan also should be refined and updated as your situation changes to help you stay on track to achieve your goals. Learn more about our approach to financial and retirement planning here.

For more information, or if you’d like to speak with an advisor about your plan, please contact Steven Martin.

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BKD Wealth Advisors, LLC is an SEC registered investment adviser offering wealth management services for affluent families and investment consulting services for institutional clients and is a wholly owned subsidiary of BKD, LLP. The views are as of the date of this publication and are subject to change. Different types of investments involve varying risks, and it should not be assumed that future performance of any investment or investment strategy or any noninvestment-related content will equal historical performance level(s), be suitable for your individual situation or prove successful. A copy of BKD Wealth Advisors' current written disclosure statement is available upon request.