It’s hard to believe that we’re heading toward fall already. Most of us have spent the summer unwinding and relaxing, so now it’s time to check in on our finances and set ourselves up for success for the rest of the year. But where should you start? I have three important moves you should include in your autumn checkup.
1. Revisit your investments
Now is a great time to take a look at your investments. The stock market has seen its fair share of ups and downs this year, and you want to know how your money has been affected by it.
Are you comfortable with the amount of risk in your portfolio? As your investments moved up and down earlier in the year, did it have too big an impact on your master retirement plan? Your investments should always be diversified and have appropriate risk for your age and how close you are to retirement. I recommend running a risk analysis of your investments with your financial adviser. This will help you understand how much risk is appropriate for you at your current stage of life.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
A common investing strategy I use with my clients is the rule of 100. With this strategy, you take your age and subtract it from 100. The resulting number should be the percentage of your portfolio that is in stocks. For example, if you are 40 years old, 60% of your portfolio should be in stocks. But if you are 60, then only 40% of your portfolio should be in stocks. This strategy helps clients get a clear picture of what their portfolio should look like.
2. Revisit your budget
When was the last time you looked at your budget? According to a recent survey by Cerulli Associates, retirees' biggest fear is outliving their assets. Proper planning through evaluating your spending habits and establishing a budget is the first step in addressing this concern. If you haven't taken a look at your budget since the beginning of the year, you may find that it isn’t working as well as you’d hoped it would. You may need to adjust based on an increased cost of living, inflation or rising interest rates.
My biggest piece of advice for anyone making a budget is always make sure you are earning more than you spend. Once you have become accustomed to spending less, you can then start focusing on long-term goals like saving for retirement.
3. Revisit your tax plan
Many people think about their taxes only as we get closer to tax season, but this should be something you are thinking about all year long. Proactively planning your taxes can help you maximize your savings and minimize your liability. The more you think about it, the better plan you can have in place when Tax Day arrives.
The first thing I recommend doing in a mid-year checkup is double check your withholdings. Income tax brackets have changed over the last few years, and many people haven’t updated their withholdings to reflect that. By adjusting your withholding, you are benefiting your finances year-round. You may not get as big of a tax refund, but you will get more money in each paycheck.
What type of retirement accounts are you contributing to? Tax-deferred accounts like your 401(k) and traditional IRA offer tax advantages now. You won’t pay taxes on these accounts until you withdraw money in retirement. On the other hand, tax-deferred accounts like Roth IRAs offer tax advantages later in life. Your money is taxed up front, so you withdraw it tax-free in retirement. If you’re not careful, taxes can sneak up on you, and you don’t want to get caught paying more than you need to.
Many people focus on their finances at the beginning of the year but fail to keep them at the forefront of their mind for the remainder of the year. Set aside time this month to review your finances, either by yourself or working with a financial adviser. With more than a quarter of the year left, there is still plenty of time to make any necessary changes before 2023 comes to an end.
related content
- Common Financial Weaknesses and How to Overcome Them
- Four Steps to Help You Have a Comfortable Retirement
- Five Tax Planning Strategies to Use All Year to Lower Taxes
- Are Roth IRAs Really as Great as They’re Cracked Up to Be?
- Five Reasons You’ll Blow Up Your Retirement Plan
-
Claiming the Standard Deduction? Here Are Five Tax Breaks for Retirement in 2025Tax Tips If you’re retired and filing taxes, these five tax credits and deductions could provide thousands in relief (if you qualify).
-
QUIZ: Test Your Retirement IQQuiz Are you smarter than…everyone else? Test your retirement smarts with this quiz.
-
Where There's a Will, There's a Way Your Assets Will Be Distributed as You WishYour will is the backbone of a strong, adaptable estate plan that ensures what you leave behind goes to your selected beneficiaries. Without a will, state laws determine who gets your assets.
-
I'm a Financial Adviser: This Is What You're Really Losing if You Cut Back on Your 401(k) ContributionsMissing out on the benefits of the employer match and compounding growth could force you to work longer and lower your standard of living in retirement. Here are some alternative options.
-
Preferred Bank Stocks: The Investment Retirees (and Others) May Be Missing Out OnMost large banks issue preferred stocks that pay out fixed dividends, often with higher yields than bonds. Should you make room for them in your portfolio?
-
Don't Let Your Equity Compensation Trip You Up: A Financial Expert's GuideStock options, RSUs and other executive perks can come with some serious strings attached. To avoid a nasty tax surprise, you need a plan.
-
The Spendthrift Trap: Here's One Way to Protect Your Legacy From an Irresponsible HeirA spendthrift clause in an estate plan can protect an inheritance from a financially irresponsible child's debts and poor decisions.
-
Adapting to AI's Evolving Landscape: A Survival Guide for BusinessesLike it or not, AI is here to stay, and opting out could be disastrous for your organization. Instead, focus on what you can control and be flexible, as AI is still evolving.
-
Striking Gold (or Gas): A Financial Pro Unpacks the Nuances of Energy InvestingInvesting in the energy industry, particularly oil and gas, involves understanding the facts about how projects generate returns through cash flow and long-term asset building, while also being aware of the risks.
-
Escaping the New Golden Handcuffs: A Financial Expert Has a Plan for Today's ExecutivesFeeling stuck in your job? It could be your complicated compensation package, but it also could be where you live, your family or even how you view yourself.
