Nine for ‘19: Financial steps you should take now

With the start of a new year, most of us begin making plans in all aspects of our lives for the year ahead -and beyond. One area we should consider is financial well-being-not only our tax outlook, but also investment and retirement strategies, property and personal insurance coverage, and more. Here is a helpful list of actions you can take now that will cultivate a more fruitful 2019.

1. Locate and organize important documents: It’s the start of a new year and there is no better way to begin than by organizing your files and streamlining your documents. Having all your financial documents from 2018 organized and ready for review with your financial advisor and tax professional will make tax season much more efficient and less stressful.  

2. Review tax withholding and payments: Make sure to address this with your tax professional. The new tax law enacted in 2018 was very comprehensive. If you end up with a refund for the year (or if you owe money to the IRS), make sure to review your tax withholding to ensure your 2019 withholding levels are set properly to avoid tax season surprises.

3. Evaluate retirement plan contributions: The start of the year is a great time to explore new investment opportunities through employer-sponsored plans or changes to employer-match contribution criteria or percentages. For those with a 401k, 2019 contribution limits are now $500 higher than 2018 levels, allowing you to save up to $19,000. Participants aged 50 or older are still eligible to save an additional $6,000 in “catch up” contributions.

4. Examine retirement account allocations: If your employer-sponsored retirement accounts are not set to automatically rebalance, determine whether adjustments are appropriate, and whether you want to adjust your risk profile. If automatic rebalancing is available and you have not signed up for it, consider adding that to your account to ensure this happens every year without any action required by you. Given recent market volatility, this is especially important now.

5. Assess gifting strategies: In 2018, the annual gift exclusion to individuals increased to $15,000 and remains the same in 2019. Charitable gifting still remains a wonderful way to help charities of your choice while getting a tax deduction for doing so. It is also possible to gift appreciated assets to individuals or charities, which transfers the value of those assets to the desired party without having to pay capital gains taxes. If you are making regular gifts to children or others, now is a good time to evaluate your 2019 gifting strategy.  

6. Explore education funding: With the passage of the new tax bill last year, 529 plans are now more attractive than ever. Funds in these plans may now be used to fund K-12 private or religious school expenses, up to $10,000 per year. Also, families can roll 529 funds over to ABLE accounts, which offer tax advantages for those with disabilities. As always, funds held in 529 plans are outside of your estate for estate tax purposes. 

7. Evaluate your housing situation: Have you been thinking about moving but are concerned about doing so now because of recent interest rate increases? Remember that mortgage rates are still at very low levels but may not stay there much longer. While you don’t want prevailing interest rates to drive this kind of important decision, it may be prudent to make a decision now rather than continuing to wait.

8. Check insurance coverage: Has your home increased in value, or have you acquired art or other valuables that make an insurance coverage increase appropriate? Have you gotten married, retired, had a child, or experienced any other major life change? Any of these events may necessitate a reevaluation of insurance coverage, from property and casualty coverage to life and disability plans. 

9. Don’t forget your dreams: As you are adjusting your allocations and examining and organizing your documents, don’t forget to consider major upcoming expenditures that may affect your financial strategy. Even if your bank balances are sizeable enough to give you discretionary freedom, it’s always a good idea to determine if you should build your balances further to accomplish your financial dreams and goals for 2019. 

The beginning of the year is a wonderful time to reassess your financial life. Here is to a prosperous (and organized) 2019!

Julianne Andrews, MBA, CFP^®, AIF^®, is a principal and co-founder of Atlanta Financial Associates. She specializes in working with physicians and top executives in the healthcare industry. Her passion for working with physicians comes from being a pediatrician’s spouse for more than three decades. Her experience as a wealth manager in combination with her first-hand view as the spouse of a physician provide Julie with a deep understanding of the challenges the changing healthcare landscape presents and how they impact a physician’s financial well-being. Julie’s financial acumen has been recognized nationally, and she has been featured on Forbes’ list of America’s Top Women Wealth Advisors since 2017 as well as Forbes’ Best-in-State Wealth Advisors since 2018. Julie can be reached at jandrews@atlantafinancial.com.