By: Kailey Boraas, CTFA, AVP Trust Officer

The end of the year is fast approaching. Before we sign off for the holidays, let us take the next few days to review the last twelve months of our portfolios and estate plan(s) to set us up for success in the New Year. 

On the first day of Christmas, my Trust Officer recommended to me… 

  1. Review Your Emergency Fund

Has your emergency fund stayed intact throughout 2022, or does it need a top-off?  Your emergency fund typically consists of six months’ worth of expenses for your household.  In addition, review if those expenses have increased, should the size of your emergency fund increase along with it. We have been experiencing high inflation for the last year, and many of our set-in-stone expenses have risen along with inflation, such as daycare costs for children. 

  1. Check Your Credit Card Debt

One of the peskiest types of debt to have! Interest payments on credit cards can often be as high as 20%.  If your credit card balances have crept up, now is the time to wipe them clean or come up with a payment plan you can follow to get them down to zero. Let us start the New Year fresh with a clean (zero balance) slate!

  1. Review Your 401k Elections and Deferrals

Is your 401k still appropriately invested with your retirement goals in mind? If not, let us re-evaluate your investment options. In addition, review if increasing your deferral by 1% is in your budget.  This will help you increase your investment savings without needing to manually save each month. 

  1. Revisit Your 2022 Investment Goals

Were you able to invest as much as you would have liked for 2022? If not, what can we change that will help you meet this goal in 2023? 

  1. Revise Your Monthly Budget

Review if you stuck to your monthly budget for the year. Were there any areas that continuously pushed you over or under budget that you can review and make changes? Do we have any subscription memberships we are no longer using that can be canceled? 

  1. Review Your Social Security Statement

Social security aged workers, sixty and older, will receive their social security statement in the mail three months before their birthday, as long as they are not already receiving social security and have yet to create a personal account online. 

You can create your social security account online at any time.  Once created, individuals can download their statements and sign up for critical reminders.  You also have access to a retirement planning tool with their online access, which can be used to estimate future social security benefits and aid in planning when to take social security to maximize your benefits.

  1. Check Your Beneficiaries

Check your beneficiaries on your accounts to ensure they are how you wish.  This includes retirement accounts, investment portfolios, banking relationships, and life insurance, to name a few.  Having correct beneficiaries designated on your accounts is critical in ensuring your estate plan is up to date. 

  1. Review Investment Portfolios

Sit down with your investment portfolios and your advisors for a review. Do any changes need to be made? Have your goals for the invested dollars changed for the upcoming year, and should risk be reduced in order to meet them?

It is also a good time to review associated fees with your portfolios. Do you know all the underlying fees that you are paying from your returns?

  1. Review Roth and Traditional Contributions

Have you already maxed out any Roth and Traditional IRA contributions that you are eligible for?  If not, does your budget allow you to make those contributions? Many factors are at play for individuals that can or cannot contribute. If you are not sure, visit with your trust officer to double-check if this is right for you. 

  1. Insurance Review

When was the last time you reviewed all in-force insurance policies you hold? Generally, reviewing all your insurance policies at least annually is a good idea to ensure coverage is adequate.  If you have had a significant life change, that could affect your insurance needs. Visit with your agent to double-check check you are all set for the coming year. 

  1. Review Your Current Estate Plan

Estate planning is a vital part of your financial well-being. Planning ahead allows you greater control, privacy, security, and peace of mind that your assets are being handled as you wish.  Annually, sit down and review if there have been any significant changes. Have you added any sizeable assets this last year? Maybe you have expanded your family.  Are your wishes the same as they were when you established your documents?

If you do not currently have an estate plan, visit with a trust officer at First Western Bank & Trust today to point you in the right direction to get started. Or, visit with your attorney to get started today.

  1. Pre-Empt Your 2023 Tax Bill

Review your income for the last year; were there big changes from the previous year? A visit with your CPA before year end can aid in making final decisions to help prepare the next year’s tax filing.