Don’t Leave Money on the Table! Conduct a Beginning-of-the-Year Financial Review

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The new year is a great time to take a fresh look at your current financial situation, set new goals, and make sure you aren’t leaving any extra money on the table.


 Conducting a financial review as you start the new year is an intentional, comprehensive effort that will help you understand your current financial state, especially after the rollercoaster year of 2020. During the review, you can see the progress you’ve made over the course of the year and ensure that you make the most out of your financial accounts.

Health Review
The beginning of the year is always a busy time, but in many cases, it’s also your best opportunity to make financial decisions that still count toward the previous year and set yourself up for financial success in the new year. You don’t want to unknowingly leave any money on the table.

Make sure to review your benefit elections. Some company health insurance plans refresh on Jan. 1 and others might start over in July. Either way, taking a few minutes to understand what benefits will be available to you in the new year is a great way to set up your financial success. If you have a health savings account (HSA), you can contribute up to $3,500 a year ($7,000 for a family) and unlike flexible spending accounts (FSA), unused money in an HSA rolls over into the next year.

Tax Elections
It’s also important to check your tax withholding elections and visit the IRS website to figure out how much you should be withholding from each paycheck. This will help you determine if you will owe the government in April or if you will get money back.

As the stock market fluctuated last year, your losses can offset taxable capital gains and be used as a deduction. This is called tax-loss harvesting and your financial advisor can help you take advantage of this benefit.

Deposit Deadlines
There are a few important deposit deadlines to keep in mind as we enter the new year in order to maximize your savings and retirement investments.

In 2021, your 401(k) limit will not increase. However, it’s always a good idea to check your investment choices, allocations, and scheduled contributions to make sure you are making the most out of your 401(k)-retirement account. If you have an individual retirement account (IRA) and have extra cash, try to hit the maximum contribution of $6,000. Remember, you have until April 15, 2021 to make a contribution that can be realized on your 2020 tax return. However, contributions to your 401(k) start over Jan. 1.

Finally, the beginning of the year is a good time to update the beneficiaries on your retirement accounts and insurance policies and be aware of upcoming milestones. If you are more than 50 years old, you are eligible for “catch-up contributions” to your IRAs and some qualified 401(k)s. If you are older than 59 ½, then you are eligible to take IRA distributions without a penalty. If the new year will bring a new addition to your family, you can create or contribute to a 529 account, which is used to cover qualified education costs.

Set New Goals

Completing a financial review can be overwhelming as you get started, but it can show you small actions you can take to better prepare for the future. Don’t be afraid to reach out to a banker if you have questions about how you can adjust your accounts and make contributions to benefit your family and financial picture.



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