Financial Planning in the New Year: 5 Tasks You Can Do Today

financial planning in the new year

January is traditionally the time for evaluation and new beginnings—particularly when it comes to financial planning for the new year. And this is especially true right now! The COVID-19 pandemic radically changed the financial lives of many Americans. Investment accounts went up and down like out-of-control carnival rides. The housing market came to a screeching halt, followed by a huge boom. And researchers estimate that, although the official unemployment rate stands at 6.7%, unofficially, there are likely more than 31 million Americans not working who should be.

Whatever your financial experience in 2020, you aren’t alone. But the start of a new year is a great time to reevaluate and make changes. 

Task #1: Check in on your strategy

Are you retired? Or do you plan to retire soon? The answers to these questions are critical as you make decisions about your finances for 2021. There’s a difference between pre- and post-retirement financial strategies, so keep that in mind if you’ve had a change of status. 

Even if you don’t need to change your overall strategy right now, you may need to adjust your individual investments. Evaluate your year-end statements and determine whether or not you’re happy with your assets’ performances. Of course, before making any changes, check with your financial advisor about your options.

Task #2: Evaluate your expenses

Although you should keep an eye on your expenses throughout the year, January is also an excellent time to check the spending across all your budget categories. Paying for subscription services you no longer use? Cancel those now! Think you’re being charged too much for certain bills? Call up the company and negotiate. Notice some charges you don’t recognize? Contact your bank to clarify what they are. Now is the time to make those changes for the next year!

Task #3: Keep looking for employment

Did you lose your job in 2020? Were you full-time before the pandemic and had your hours reduced to part-time? Or are you one of the millions of Americans who is underemployed? Possibly you were planning to retire in the next five years, but COVID-19 work reductions have accelerated your plan.

Many of those currently on unemployment have given up looking for work. The pandemic’s consequences—reductions in business hours, capacity and availability—have made finding a job even more difficult. But once the current robust unemployment benefits run out, competition in the job market will predictably increase dramatically. So if you do want or need to work, don’t wait. Keep looking now!

Task #4: Focus on the future

During such an unusual year, you may have made financial decisions that you normally wouldn’t have considered. Some of those choices may even have long-term effects on your retirement. For example, according to the Pew Research Center, one-in-three adults were forced to use their savings or retirement accounts to cover everyday expenses

While you may regret some decisions, you probably made the best choice you could in a year filled with anomalies. Getting caught up in worry or anxiety won’t help you move forward, and the future is where your focus should be!

Task #5: Talk to a financial advisor

These tasks are a great place to start your assessment and financial planning for the new year. But you should consult with a professional to properly evaluate your investment accounts, 401K and other financial assets.

Aaron, the My Senior Health Plan retirement plan specialist, is happy to help you revisit or reassess your retirement plan. He can also refer you to a financial advisor who specializes in post-retirement planning. Contact him at (877) 255-6273 or schedule an appointment here.


image credit: shutterstock/everydayplus

Pete Blasi