Your Annual Reminder to Review Your Financial Health Alongside Your Physical Health
As we enter the season of open benefits enrollment, you may be considering whether you should make changes to your healthcare benefits in order to keep up with your changing physical wellness needs. Conducting regular reviews of your family’s health and related benefits is a vital step in helping to secure your long-term wellbeing. As you’re considering your health benefits for the upcoming year, don’t forget to also review your financial wellness.
Like your physical health needs, your financial health needs can change over time. That’s why it’s important to conduct regular financial wellness check-ins. As you decide on healthcare benefits for the upcoming year, be sure to make similar plans to address your financial wellness. The following tips can help.
#1 – Schedule regular preventative care appointments.
Just as you schedule regular preventative care appointments with your doctor, it’s important to schedule annual financial check-ups with your wealth manager. Important financial wellness topics your wealth manager should address in your annual review include:
- Any changes that occurred in your life over the past year and how those changes may impact your financial planning strategies
- Investment performance and asset allocation
- Fees
- Progress toward your personal financial goals
- Goals for the upcoming year
- Tax planning opportunities
- Estate planning documents and account beneficiaries
#2 – Plan for emergencies.
An unexpected healthcare emergency has the potential to upend your entire life. If not properly planned for, financial emergencies can do the same. To protect your long-term financial health, it’s important to save at least three to six months of expenses in a liquid savings account. Doing so allows you to quickly access funds without the need to sell investments at an inopportune time (which could potentially lock in losses that could be difficult to recover from).
In addition to emergency savings, it’s important to have an estate plan in place to provide for your family should something unexpected happen to you. Depending on your particular situation and long-term goals, your estate plan may include any combination of the following documents.
- Will
- Guardianship documents
- Revocable/living trust
- Durable power of attorney
- Healthcare power of attorney
- Letter of intent
#3 – Choose relevant insurance policies.
As you review your employer-sponsored insurance options, such as health, disability, life, etc., be sure to consider how these policies fit into your overall financial plan. Your wealth manager can work with you to conduct a risk assessment and determine the right amount of coverage to meet your needs and protect both your assets and your loved ones.
Your wealth manager can also advise you on whether it makes sense to make changes to any non-employer policies, such as umbrella insurance, homeowners/renters insurance, long-term care insurance, etc.
#4 – Pay your monthly “premiums.”
Just as you automatically pay your monthly health insurance premium directly from your paycheck, consider automating a percentage of your paycheck toward your savings. One of the easiest ways to enhance your long-term financial wellness is by making regular contributions to your employer-sponsored retirement plan. At a minimum, make sure you’re contributing enough to take full advantage of any employer matching contributions.
If you don’t have access to an employer-sponsored retirement plan or would like to save even more, you can also make automatic contributions to other account types, such as IRAs and taxable brokerage accounts. Your wealth manager can help you establish an automatic savings strategy that makes sense for you.
