Morgann Zimmer, CFP®
As we reach the midpoint of the year, it is a fitting time to step back and revisit your financial plan. While comprehensive planning is inherently long-term, the landscape continues to shift both personally and legislatively. Taking a few moments now to review your progress and assess your next steps may help reduce surprises later and increase confidence in your financial direction.
Evaluate Cash Flow and Adjustments in Income
Changes in income, whether from a raise, bonus, reduced hours, or variable self employment, can shift your savings capacity and tax outlook. Likewise, unexpected expenses such as home repairs, family support, or medical bills may create short-term disruptions. Revisiting your cash flow ensures that your saving and spending continue to reflect your goals. This is especially important for retirees who may need to reassess monthly withdrawals if their spending has increased unexpectedly or if inflation has outpaced the assumptions used in their financial plan.
Consider Strategic Tax Opportunities as the Year Progresses
As we move through the year, many individuals are beginning to gain a clearer understanding of their projected income and deductions for 2025. This creates a timely opportunity to explore tax planning strategies such as Roth conversions, charitable giving, or the timing of income and capital gains. While some of these strategies may ultimately be implemented closer to year-end, evaluating them now allows for more informed and efficient decision-making later. With the scheduled sunset of key Tax Cuts and Jobs Act provisions after 2025, now is a good time to begin considering how potential changes to tax brackets, estate exemptions, and other provisions could impact your long-term plan. While the House Ways and Means Committee has proposed extending the current tax brackets and estate exemption, it remains uncertain at the time of this writing what legislation will ultimately be enacted. Taking the time to prepare can help ensure you are positioned to act decisively when it matters most.
Check Your Retirement Contributions and Allocations
Understanding the role of different account types such as taxable, tax-deferred, and Roth accounts is important not only for those in or nearing retirement, but also for those still in the accumulation phase. Building a well-balanced mix of account types can provide greater flexibility and more favorable tax outcomes when it comes time to draw down assets in retirement. Whether you are saving or already taking distributions, retirement-related planning deserves regular attention. Are you on track to maximize your 401(k), IRA, or HSA contributions? If you are already retired, are you meeting required minimum distributions (RMDs) in a tax-efficient way?
This is also a good time to review your portfolio’s allocation to ensure it continues to reflect your long-term goals and risk tolerance, especially if your circumstances or time horizon have changed. Periodic reviews can help identify concentrated positions, excess cash, or gradual misalignments that may need adjustment.
Review Insurance and Estate Planning Documents
If you have experienced a life change such as a new family member, a move, or an aging parent situation, it may be time to revisit insurance coverage or beneficiary designations. Reviewing property and liability coverage is also wise, especially with the recent rise in replacement costs and increasing premiums in many areas of the country. Estate documents should be reviewed every few years or after major life changes to ensure alignment with your current wishes and the broader tax landscape.
Reaffirm What Matters Most
A financial plan is not only a set of projections or a list of accounts. It is a reflection of your values and a framework for your decisions. What felt like a priority last year may no longer be at the top of the list. Use this mid-year moment to reflect on whether your financial life is still supporting the life you want to lead.
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The information, analysis, and opinions expressed herein are for general and educational purposes only. Nothing contained in this commentary is intended to constitute personalized legal, tax, accounting, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. Past performance is not indicative of future results. Information obtained from third party sources are believed to be reliable but not guaranteed. All opinions and views constitute our judgments as of the date of writing and are subject to change at any time without notice.
