Your 2019 Spring Cleaning Financial Checklist

April 1, 2019


What can be more exciting than finally arriving at your final destination after a long day of traveling on the road?  I love traveling, and I love taking interesting photos of unique things and places.  However, when I am going on a road trip, I attempt to plot my stops wisely for fuel, food, and breaks.  Upon arrival, there is a big sigh of relief.  This relief is knowing it is time to relax, time to enjoy the location, and time for adventure.

When it comes to retirement, the path to achieve freedom from the workplace can be very similar.  You have worked so hard and saved diligently to reach your financial goals. 

In the blog below, you will learn how to perform a Financial Spring Cleaning that includes the following:

  • Verify the accuracy of your Social Security Account

  • Review your retirement assets

  • Reassess your financial plan

You have a goal to live a worry-free retirement.  It is no secret that with the advancements in living healthier lifestyles and medical treatments, humans are likely to live longer lives.  This creates a fork in the road scenario as you are faced with two options.  

The first option is choosing to work longer ensuring your nest egg will not deplete before your life longevity.  The other option is properly planning ahead of time so you can enjoy a long, fulfilling retirement.

1. Verify Accuracy in Your Social Security Account
The first action in both cases is verifying the accuracy of your Social Security Account.  If you do not have an account built, finish reading this blog and open an account.  Don’t worry, it is a free account. Click Link Here to Open Account:

This spring, you must review your earnings account on the Social Security to verify its accuracy because any missed earnings lower your future payout amount.  Nobody should be leaving money on the table.  You worked hard for it to ensure every penny is accounted for as you may need it one day.  

While it is heavily recommended that you do not rely solely on your social security benefits to fund your retirement, it is part of the retirement triad.  I consider this benefit as one retirement leg of the three-legged stool.  
Once you create an account, you will review your projected monthly payout once you reach the qualified retirement age or are deemed disabled.  Workers who retire at age 70 receive a higher payment so if you are capable, try to extend your work-life until 67 or 70.  

Several financial planners and media gurus claim Social Security will be broke soon and the government will not be able to make payments.  It is a fact that reform is needed to fix it; however, Social Security will continue to pay out because taxes can always be raised to pay for these entitlements.  Too many Americans rely on it and therefore, the government will never allow it to lapse on payments.  

2. Review Your Retirement Assets
The next item on your Financial Spring Cleaning Checklist is reviewing your retirement assets.  You have several options for your advantage of helping to entice you to save money.  From 401(k) to IRAs, consider how much you have contributed and if you have reached the annual contribution limits.  If you haven’t maxed out each, ask yourself why and make a plan to achieve those limits.  

The maximum amount workers can contribute to a 401(k) for 2018 is $18,500 if they’re younger than age 50. That’s a $500 increase from 2017 when the contribution limit was $18,000. Workers age 50 and older can add an extra $6,000 per year in “catch-up” contributions, bringing their total contributions for 2018 to $24,500.” according to a Kiplinger article.  

Since you have until April 15, 2019, to make 2018 contributions, it didn’t reach your goals for last year, stop making 2019 contributions and shift those to 2018 for the next few weeks.  According to the IRS, “If you’re still working, review the 2018 IRA contribution and deduction limits to make sure you are taking full advantage of the opportunity to save for your retirement. You can make 2018 IRA contributions until April 15, 2019”. 

If you are one of the fortunate ones who diligently maxed out your 2018 contributions, then focus on this year’s limit.  The 2019 limitation for 401(k), 403(b), most 457 plans and the Thrift Savings Plan is $19,000.  The Roth and Traditional IRA 2019 limitations are $6,000 (if under 50) and $7,000 (age 50 and over).  

Another retirement asset to review is your pension, if applicable.  If you work for a corporation or federal entity offering a pension plan, this is an excellent time to assess the anticipated monthly payout.  Also, consider any tax consequences by the state you reside in.

3. Reassess Your Financial Plan
Many factors need to be considered when assessing your financial plans.  Life events, health conditions, and others play vital and crucial roles in making decisions.  Determine what these events are and if assistance may be needed to care for you and your spouse.  Do you have a will in place?  How about an estate plan?  Are you debt-free or will you be debt-free?  What are your plans during retirement and can you afford those?  Each of these factors needs to be considered as each one will help guide you in making a decision towards how much longer you should work.  

Assess the value of your current assets.  By reviewing the value of your home, would you be willing to downgrade the size and lot of your home when you retire?  Do you have mutual funds, investments, savings, and cash that can fill the gap of any retirement funding?  

All of these assets in assessing your financial plan will be the third leg of your retirement stool.  Because you can only contribute up to a certain amount annually per number two item above, ensure you continue investing but reassess your risk level.  The older you get, the more conservative your risk levels should be as to provide protection of your principal.  This means the older you get, the more you should see assets moving from stocks (equities) into bonds, Certificates of Deposits, Savings, Fixed Income, etc.

Note: Check out Kiplinger's 5 Ways to Not Run Out of Money

Like any good spring cleaning, do not forget to review your financial situation.  By focusing on the retirement triad, you can examine and assess your social security, retirement assets, and investments/assets to ensure your financial goals are on track or getting back on track.  Ensure you take the time to properly scrub your finances to have a successful 2019 Financial Spring Cleaning.


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