Your Annual Financial Plan Review Checklist

Your Annual Financial Plan Review Checklist


Creating a checklist can help you focus on the most important aspects of your annual financial review. Consider the following questions when discussing your financial plan with your advisor:

Should I rebalance my asset allocation?
Start by examining the performance of your stocks, bonds, cash and other assets. If your investments are not performing up to your expectations, you may want to rebalance your portfolio1. You can rebalance your investment portfolio by selling existing assets and using those proceeds to purchase different assets or allocating new investments to areas you want to increase. Keep in mind rebalancing may involve tax implications, especially for non-tax-deferred accounts. Consult with your tax and financial advisor before rebalancing your asset allocation.

Am I on track saving for my retirement?
Making sure you are on track saving the amount you will need during your retirement should be a priority for your annual financial plan review. If you participate in an employer-sponsored retirement plan, consider investing as much as you can afford. If you do not have access to an employer-sponsored plan, or if you do and can afford to contribute even more, consider funding an IRA.

What were my yearly capital gains and losses?
If your year-end planning entails selling certain assets, be aware of the rules regarding capital gains and losses. The federal government taxes gains on investments held less than one year as ordinary income and investments held for more than one year at a 15% rate when you file your income taxes. Capital losses can offset gains up to $3,000 annually, but you cannot apply those same losses across multiple years. State tax rules may differ, so always consult with a qualified tax professional.

Am I taking full advantage of tax-advantaged accounts?
Certain investments receive favorable tax treatment. You can contribute to your employer-sponsored 401(k) tax-free. This deduction also decreases your taxable income for tax purposes. Contributions can grow tax-free until you make qualified withdrawals during retirement. If you are 59 ½ years or older and have maintained the account for a minimum of five years, qualified withdrawals from a Roth IRA are also tax-free2.

Reviewing your financial plan on a yearly basis is a vital part to wealth management and retirement planning. To review your financial plan, find an advisor.

 

1Asset allocation does not assure a profit or protect against loss in a declining market. Investing in stocks involves risk, including loss of principal. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and are subject to availability and change in price.
2For nonqualified withdrawals, restrictions, penalties, and taxes may apply.
The information contained herein is for information purposes only, is not designed to address your financial situation or particular needs and does not constitute the rendering of tax or legal advice. You should consult with your tax advisor or attorney for advice pertinent to your personal situation. Asset Allocation, Alternative Investment and Hedging/Diversification strategies are intended to mitigate the overall risk within your portfolio. Some strategies may be subject to a higher degree of market risk than others. An investor should understand the costs, cash flows and risks inherent in a strategy prior to making any investment decision. There are no guarantees that any strategy presented will perform as intended. Fifth Third Private Bank is a division of Fifth Third Bank offering banking, investment and insurance products and services. Fifth Third Bancorp provides access to investments and investment services through various subsidiaries, including Fifth Third Securities. Fifth Third Securities is the trade name used by Fifth Third Securities, Inc., member FINRA/SIPC, a registered broker-dealer and registered investment advisor. Registration does not imply a certain level of skill or training.

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