What You Should Include in Your 2019 Financial Checkup


Everyone knows that as we get older it is a good idea to have scheduled, regular physicals and other check-ups with your doctor, dentist, optometrist, etc. But far too many people forget about another checkup that is equally important – a Financial Checkup.

Just like things tend to change throughout the year with your health, financial changes seem to happen almost daily and are important to consider for your overall “wellness”.

At SGL Financial, we strive to help you build wealth, preserve it, and live your life with financial freedom. We believe it is important for you to include regularly scheduled meetings with your financial adviser to help accomplish this goal.

While we cannot cover all the items that should be included in a comprehensive checkup with your adviser in this post, here are 5 items that you should include at least annually:

1. Social Security – Current or Projected Benefits Review

Social Security is similar in payout structure to the defined benefit pension plans that most Americans had access to in the past. Today, very few of these pensions still exist and retirees are forced to manage their retirement assets on their own.

Understanding how much you can expect from Social Security, now or in the future, is a major component of any comprehensive retirement checkup. Individuals should periodically review their Social Security Statement which can be accessed online by creating a My Social Security Account online at https://www.ssa.gov/myaccount.

This statement will give you a true picture of your current and/or future retirement benefits and allow you to discuss with your adviser what additional measures, if any, should be taken to meet the needs of you and your family.

2. Consider a Roth IRA Account

A Roth IRA can give you the option of tax-free income in retirement. Roth contributions can be withdrawn tax-free at any time and Roth account earnings can be withdrawn tax-free after a 5-year waiting period.

Most company 401(k) plans offer a Roth Contribution Option for part, or all, of the employee’s portion of their 401(k) contributions. So while you are still working you can be building a Roth that grows tax-free.

Another great discussion to have with your adviser is the possibility of transferring previously non-taxed qualified plan contributions to a Roth account. If you can transfer assets and not increase your tax bracket, paying taxes now to have access to tax-free future income may be a great long-term solution.

Roth IRA assets are also NOT subject to required minimum distributions, so you have more control over the eventual usage and distribution of these assets. One other Roth benefit is that when passed to beneficiaries at death, the inheriting individuals may not need to pay taxes with withdrawals are made.

While there are some restrictions for direct Roth contributions in any given year, there still, as of today, are provisions for making Backdoor Roth IRA contributions to mitigate these restrictions. The bottom line is that you should discuss your Roth Account options with your adviser.

3. Check and Update Your Beneficiary Designations

During your “checkup” you should make a listing of all documents and accounts (wills, insurance – life and annuity policies, security holdings, etc.) where you have designated a beneficiary.

As we stated earlier in this article, there are many changes that happen throughout the year, some of which might warrant a beneficiary change to one or numerous items. Just a few common items that might happen are deaths, births, changes in family situations, weddings, divorces, etc. So be sure to consider these changes at least annually.

We also should mention here that having a Financial and/or Durable (Medical) Power of Attorney is a good idea and should be updated or reviewed annually as well.

4. Charitable Giving

There is no better feeling in our opinion than being able to make a difference in other people’s lives. Charitable giving is one viable option to accomplish this.

While the Tax Cuts and Jobs Act made tax-efficient more difficult – by increasing the standard deduction – for individuals who still able to itemize their deductions, make sure you are giving in a tax-efficient way.

You should have a discussion with your adviser and your tax professional to consider if charitable giving would still give you a tax benefit of not but please consider, whether there is a tax benefit or not – there is a real “human” benefit and a feeling of well being derived from giving.

5. Update Your Financial Plan and Set New Goals for 2019

Since the beginning of the year is the time for “resolutions”, you should make it a resolution to review and update your financial plan with your adviser. Part of this review should of course be tracking and updating existing goals, and establishing new ones for 2019.

Of course if you don’t have a financial plan, and by that I mean an actual written document, that should be your first priority. The old saying, “Not Having a Plan is Planning to Fail” has proven to be true with far too many individuals that we have come across in our firm.

If you don’t have a financial plan, please contact our adviser. You will be pleasantly surprised with how easily we can assist you to get on the road to accomplishing your goals.

Our entire team at SGL wish you a very Happy, Joyous, and Prosperous 2019!