By now, your December calendar is probably filling up (or full already). This is the time of year when we are busy with Christmas shopping, church functions, parties, and family gatherings. While you might be busy with Christmas preparations, this is also the perfect time to review your financial health, particularly your retirement account.
A financial review may not be part of your annual calendar, but adding a retirement account checkup during the holiday season can be one of the best gifts on your list, setting the stage for a financially secure future. This period allows you an opportunity to ensure you are on track toward your retirement. As you plan for this year-end checkup, consider these steps.
Review your account balance and contribution rate. Start by checking the balance in your retirement accounts. Knowing where you are will help you assess whether you are on track to reach your retirement goals. Look at your contributions for the year. If you haven’t reached the maximum contribution for the year and have extra funds, consider making an additional contribution. Not only will this reduce taxable income, but it also can move you further along toward your retirement planning goals. Also, make sure your regular contribution amount is what is needed to meet your retirement goals. If you’re behind, now is the time to strategize how to catch up and increase your contributions.
Evaluate retirement goals. Retirement goals change as we go through life based on life changes. Employment, marital status, health — all can impact how and when we retire. It is crucial to consider life changes and update your goals accordingly. As your goals are updated, be sure your current savings rate and investment strategy are aligned with updated goals.
Assess your investment portfolio. The end of the year is a great time to determine how your investments have
performed and your overall investment allocation. While
it is true investors shouldn’t over obsess about the
market, markets do fluctuate. Therefore, it is prudent
to review any shifts in investment allocations.
A year-end review allows you to make needed adjustments to your investment ratios and rebalance your current investments to align with risk tolerance and retirement goals. If you are unsure about the state of your retirement account, or need guidance on ratio adjustments, consult with a financial advisor.
Update account information and beneficiaries. Review all your account information — address, phone numbers, and email address — for the security of your account. It is also a good time to ensure beneficiaries are up-to-date. This step is often overlooked, but it is crucial for protecting retirement assets and ensuring they are distributed according to your desires.
As you celebrate this holiday season, consider taking some time to review your retirement account. A quick retirement plan checkup can have lasting benefits. This year-end checkup is not just about ensuring you’re on track for a secure financial future; it’s about making sure you can be and do all the Lord has for you in the last quarter of your life.
So, this Christmas season, set aside time for this essential checkup. Think of it as a Christmas gift to yourself!
About the Writer: Chris Compton is accounting administrator for Richland Ave Financial (Free Will Baptist Board of Retirement). Chris graduated in 2007 with an M.A. in Bible exposition from Columbia International University. A 1998 graduate of East Tennessee State University, he has over 15 years of administrative/financial experience in varied fields, as well as seven years of pastoral ministry experience.
