4 financial focus areas to consider for the new year


This blog was originally published on January 25, 2023. It was updated on January 8, 2024.

Every new year brings a new opportunity to refocus on what’s most important in your life, set goals for what you want to accomplish, and start making progress. This is a great time to review your financial picture and take steps to set yourself up for future success in the years to come.

With that in mind, here are four personal financial goals to consider this year.

1. Review your financial plan with an advisor

How much money will you need in retirement? Knowing the amount needed to fund your nest egg and support your lifestyle in retirement (aka “your number”) will help you set goals and plan better.

A quick way to determine your number is to calculate how much you expect to spend in retirement. For example, let’s say your current spending is $500,000 a year. Once you retire, you believe you can get by on 80% of that, or $400,000, as you no longer have to pay employment income taxes, the cost of commuting, etc. Your investment portfolio needs to be working hard now to generate those funds you will need in the future.

Because your portfolio is such an important part of your financial plan, this is an area where most people will benefit from professional guidance. A financial advisor can help you assess your needs, understand your financial picture, and implement and maintain a plan tailored to your specific situation and long-term financial goals.

If you’re not sure if having a professional advisor is worth it, check out Vanguard’s Advisor Alpha study, which shows how investors benefit up to an additional 3% on their returns each year after hiring a financial advisor.

To create a financial plan with confidence, look for a CFP® professional who is obligated to act as a fiduciary – putting your best interest first – when providing financial advice. Fiduciaries are regulated and required to be completely transparent with their fees and compensation in a way that non-fiduciary financial advisors are not. Greater transparency helps you to understand your true return on investment and maximize your returns.

If your advisor is not transparent about pricing or only recommends proprietary products, created by their employer, instead of presenting lower-cost third-party solutions and strategies that fit your needs, it may be time to look elsewhere for guidance.

2. Review your investment strategy

Having a long-term investment strategy in place is essential for your long-term success. A broad-based, globally diversified portfolio is a good place to start. If your portfolio is not as diverse as it should be, it may make sense to reposition your portfolio to improve your asset allocation mix.

A financial advisor can add value by designing a strategy that aligns with your financial goals, reviewing your current investments, and helping you to make adjustments where needed.

Alternative strategies that generate income and lower volatility are becoming a larger part of portfolios for many investors, especially as higher interest rates and inflation continue to cut into returns. For example, one income-generating strategy that is growing in popularity for accredited investors is private mortgage lending.

Ask your advisor if these types of alternative strategies may be the right fit for you.

3. Review gifting and charitable giving strategies

If you’re considering charitable giving, one strategy you may want to consider is charitable capital gain harvesting, which enables you to donate appreciated securities. This strategy presents a double benefit from charitable contributions, with both the market value tax deduction for charitable giving and elimination of the capital gain liability of appreciated securities.

Speak with your financial and tax advisors about which charitable strategies may be most aligned with your financial goals.

4. Make it a priority

Has it been a while since you reviewed your financial plan? What about your estate planning documents and insurance policies? Are you saving enough to stay on track and have the financial resources you’ll need for the best future you?

Make this the year to make your finances a priority. Be proactive about reaching out to your professional advisors, including your wealth advisor, tax professional, insurance professional and attorney. Get ahead of tax and financial planning, and be ready for a mid-year financial check-in. You may miss out on valuable opportunities if you wait until the end of the year.

Your financial security is critical in the pursuit of a long and fulfilling life, so invest the time in planning for your future.

Charles Sachs, CFA, CFP®, is a Chief Investment Officer at Kaufman Rossin Wealth, LLC, a Registered Investment Adviser.

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