The Pax Financial Blog

PAX Financial Group’s 2021 Financial Checklist: Top 10 To-Dos

Financial Planning Jan 4th, 2021 by: Darryl Lyons

What a year 2020 has been. This has, without a doubt, been a year of uncertainty and change. For a lot of people, the best part about 2020 is that it’s over! But it’s important that we don’t just push it aside and move on.

Any difficult time can produce important life lessons, and the same is true with 2020. There were many pandemic-inspired lessons we can take from 2020. As we reflect on the past year, think about what lessons you learned and how to use them to your benefit in 2021.

The team at PAX Financial Group has compiled the following checklist for 2021 to help you get started. For more specialized advice on your specific situation, contact us! If you’re wondering, “When should I talk to a financial advisor?” there’s no better time then now. We’re here to help.

What changes will you make in 2021? Contact PAX Financial Group and get the conversation started.

1. Talk to your financial advisor. At the start of a new year, it’s always wise to check in with your financial advisor, and this year is especially important. A lot has changed for a lot of people. At PAX Financial Group, we’ve talked to clients about job loss, cut hours and early retirement specifically related to the Coronavirus pandemic. We’ve heard of divorce and family loss. There have been new marriages and children welcomed in 2020. Each of these life-changing events carry financial considerations that should be reflected in your financial plan. Any new situation can change your retirement goals and budgetary needs. Are you now saving for a child’s college education? Do your plans for retirement match those of your new spouse? Do your beneficiaries need to be updated? A simple conversation can have a big impact on your financial future. Staying status quo when your life has changed can result in savings that no longer fit your lifestyle. And the more money you have, the more money you can leave on the table. We often get asked, “When should I talk to a financial advisor?” The answer is “now.”

2. If you haven’t done so already, enroll or select your employer-sponsored benefits for 2021. Employers often offer their open-enrollment periods at the beginning of the year. Make sure to take advantage of any health and life insurance coverage, Flexible Spending Accounts (FSAs), dependent care accounts, health savings accounts, retirement accounts, and other benefits that are available and appropriate for you and your family. If you’re not sure about what you need, discuss your options with your financial advisor.

3. Review your investments and retirement contributions. Are you maximizing the amount you can contribute to your 401(k) and/or IRAs? Did you make any changes to your investments or asset allocation in 2020? If you did, how will those changes be affected by capital gains and losses? If you didn’t, should you? Also, if you married or divorced this year, had a new baby or grandchild, or experienced any other major life changes, you may want to update your investment and retirement account beneficiaries.

4. Update your estate plan. Are your will and trust current? Do you need to make any changes to your power of attorney? Update beneficiary designations if needed. No one wants to leave their assets to the wrong people – an ex-spouse, an old business partner or someone that is no longer alive.

5. Check your policies and coverage – not just your life insurance, but your auto and home insurance too. Make sure you have the right amount of coverage and that deductibles are appropriate for you and your family. Again, update any beneficiary designations and consider any changes that would affect your needs.

6. Reassess your financial goals for 2021. For a lot of people, 2020 brought a lot to the surface, financially speaking. Do you have new savings goals for next year? Can you save more, or do you need to divert funds to pay down debt or other considerations? Should you consider refinancing your mortgage or consolidating debt?

7. Check your credit report. With stay-at-home orders enforced worldwide, a lot of shopping and bill paying was done online last year. Review your credit card accounts. Are there any discrepancies to dispute or accounts you don’t recognize? The earlier you catch a fraudulent charge, the easier it can be to be reimbursed.

8. Prepare for taxes. Review losses, tax-bracket planning opportunities, and other possible state and federal tax changes. Did you take a Required Minimum Distribution (RMD) in 2020 that you rolled back into an IRA or 401(k) as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act? Don’t forget to discuss the tax you paid on the RMD with your financial advisor, accountant and/or tax preparer.

9. Review your emergency fund. If 2020 has taught us anything, it’s that life doesn’t always go as planned. Did you have to dip into your emergency fund this year? Do you still have adequate funds saved in case you lose your job or have a medical emergency? If you can, save between three and six months’ worth of expenses in a traditional savings account that you can quickly and easily access. For more on what an emergency fund looks like, read our recent blog post: Do You Have an Emergency Fund?

10. Assess your household monthly budget. Do you need to reduce expenses to account for less income? Is working from home leaving you with extra funds you would have otherwise spent on gas or work-related travel expenses? Have your grocery and utility bills increased, with your family spending more time at home? Has your entertainment budget dropped significantly? Take a look at your budget and see where you can do some juggling to account for the changes 2020 has undoubtedly had on your income and expenses. For a more complete outline of your budget and financial plan, refer to this comprehensive guide.

 

Need Help?

If it seems like you have a lot to do and not much time to do it, don’t despair. Most of the above tasks can be easily taken care of with help from your financial advisor. Prioritize the items on the list for your unique situation, and don’t hesitate to ask your financial advisor to answer questions, offer advice and assist in checking things off your list. The key is to not put any of these items off! Sticking your head in the sand is not an option!

Don’t waste time asking yourself when should I talk to a financial advisor. If you’re currently looking for a financial advisor in the San Antonio area or feel it’s time to make a change, contact the team at PAX Financial Group to see how we can help.

 

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This material is provided by PAX Financial Group, LLC. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The information herein has been derived from sources believed to be accurate. Please note: Investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results.

 

Darryl Lyons

Darryl Lyons

CEO and co-founder of the PAX Financial Group, Darryl Lyons has been a licensed professional in the financial services industry since 1999. A lifelong Texan, Darryl began his career in the financial sector just one day removed from earning his bachelor’s degree in corporate financial management and accounting at St. Mary’s University. Throughout his career, he has won awards for recruiting and development from Fortune 100 companies. In January 2007, he chose to begin and develop his independent practice. He joined Andres Gutierrez and Joseph Schuetze to form the PAX Financial Group. Darryl also served as the Chairman for Brooks Development Authority. Shortly after his service, Mayor Julian Castro, named a park “The Darryl W Lyons Park” in honor of his service. He was named to the 2010 San Antonio Business Journal’s “40 Under 40 Rising Stars,” which honors people making a difference in business and in the community.

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