As we approach the end of 2021 and the start of 2022, financial professionals can help clients reflect on the past year and put some thought to the year ahead. While resolutions are traditionally focused on health or establishing good habits, some clients may benefit by making financial resolutions.
Let’s review some helpful resolutions to start the year off right.
Getting started is the first big step. Help your clients review workplace options and ensure they take advantage of matching contributions to get the most bang for their buck. If the plan offers a longevity annuity as an option, consider placing some contribution there. Consider IRA or Roth IRA options if workplace savings are unavailable.
Identify what type of debt is owed. Pay off high interest debt first and focus on reducing other debt. Then, look at how much debt is owed and when it must be paid off. There are a few strategies that can be effective:
The rules of thumb vary between having 3–12 months of living expenses. It really comes down to how secure current income is. If someone has a spouse who works, that can cushion the blow of a sudden loss of income.
Did anything change last year? Did the family welcome a grandchild, or did a child get married, or was there loss of a family member; all these occurrences create an opportunity to review beneficiaries on accounts to make sure they are up to date. Also, clients may want to consider if a trust or a will may ease the burden on survivors, taking care of dependents, including spouses or minor children.
It’s not quite as simple as making coffee at home versus eating out. While many of us can cancel subscriptions we no longer use, the big cuts come from higher-ticket items. Reinvestigate competitive rates for auto and home insurance every couple of years. Review workplace benefits to ensure clients have the optimal plan coverage.
Ultimately, good financial health can equal good mental health. Building strong financial health can help weather the unknown financial stresses in the new year to help alleviate worry.
Be sure to schedule a call with clients to share the above information, and help them
meet their financial health resolutions for 2022.
Year-End Tax Updates and Planning Opportunities
For more information about retirement-planning, please contact our Retirement Strategies Group at RSG@PacificLife.com or (800) 722-2333, ext. 3939. PacificLife.com
This material is provided for informational purposes only and should not be construed as investment, tax, or legal advice. Information is based on current laws, which are subject to change at any time. Clients should consult with their accounting or tax professionals for guidance regarding their specific financial situations.
This material is educational and intended for an audience with financial services knowledge.
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