Time to Review Your Investment Plan

financial planning

The end of the year is a good time to reflect on 2020, how your financial situation may have changed, and your goals for next year. You can look at how your investments are doing, review your portfolio, and think about how close you are to retirement or the state of your finances in retirement. This can be as easy as taking 15 minutes to check up on your portfolio. By taking the time to review your investment plan, you can feel ready to take on the new year with an up to date strategy.

Review Your Retirement Accounts

You can start this review by checking your 401(k), IRA, or similar retirement account performance. Look at your retirement accounts, make any last contributions or distributions for 2020, and see where 2020 has left you. If you plan to do a Roth IRA conversion for 2020, do so by December 31st. You can go online to get your statements or look for a year-end statement in the mail. Once you have all of your paperwork, start evaluating. Compare your funds with indexes that include similar investments to yours. For example, you want to compare bond funds to bond funds, not bond funds to balanced funds.

Review Your Investments

If you’ve had investment losses this year, deducting them is one thing you can do by the end of the year to help lower your 2020 tax bill. Tax-loss harvesting allows you to take your losses earlier, delay payment on the gains, and, as a result, pay a similar total tax bill, but at a later date. With this approach, you can help reduce your income tax liability from your investment losses. If you have more capital losses than you have gains for a given year, then you can claim up to $3,000 of those losses and deduct them. If you have more capital losses than that, then you’re allowed to carry the excess forward for use in future years. There’s no time limit for using the capital loss deductions that you’ve carried forward.[1]

Consider Your Risk Tolerance

2020 was a rollercoaster of a year, and it may have made you reconsider your risk tolerance. Your risk tolerance may change as you near and enter retirement, and your investment strategy should reflect this. An advisor can help you explore potentially lower-risk investments and diversification. You may also consider seeing if you need to rebalance your portfolio. If some of your investments performed great, you might be weighted too heavily in one area. Now is the time to rebalance because you never know what might happen with the market in the future. You may consider keeping a mix of stocks, bonds, and other investments in your portfolio.

We want to help you create a strong financial plan to help you start your 2021 off right. We will sit with you and evaluate your accounts and can create a complete retirement portfolio designed to fit your unique financial goals. We will consider your lifestyle goals and financial situation and listen to your concerns about the future. Sign up to talk to us to give yourself the gift of a truly comprehensive retirement plan.

[1] https://www.irs.gov/taxtopics/tc409

The commentary on this blog reflects the personal opinions, viewpoints and analyses of BML Wealth Management’s employees providing such comments, and should not be regarded as a description of advisory services provided by Cooper Financial Group. The views reflected in the commentary are subject to change at any time without notice. Nothing on this blog constitutes investment advice. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance is no guarantee of future returns.

Investment Advisory services are offered through Cooper Financial Group, an SEC Registered Investment Advisory firm. All Insurance Services are offered through BML Wealth & Insurance Services. California Insurance License #0M15550. BML Wealth Management & Cooper Financial Group are not affiliated.

We do not provide tax or legal advice, all individuals are encouraged to seek guidance from qualified professionals regarding their personal situation. Any references to protection benefits or steady and reliable income streams in this guide refer only to fixed insurance products. They do not refer, in any way, to securities or investment advisory products. Annuity guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. Annuities are insurance products that may be subject to fees, surrender charges and holding periods which vary by insurance company. Annuities are not FDIC insured. Indices mentioned are unmanaged and cannot be invested into directly.

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