January is the perfect time to start fresh and plan ahead for 2025. From ongoing changes in the market to the recent U.S. Presidential Election, there is a lot for both individuals and business owners to consider when reviewing their financial plans. From refining your investment strategies to ensuring your estate plan is up to date, a comprehensive new year financial checklist and review can uncover opportunities to strengthen your financial foundation. In this blog, we’ll discuss steps you can take to protect your wealth in the new year.
- Review Your Financial Goals
Because your goals act as the foundation for your wealth plan, the new year financial planning checklist is the perfect time to determine if anything needs changing.
Ask yourself a few of these questions: Are you on track to achieve your short- and long-term objectives? Do you need to adjust savings targets, diversify your investments, or reprioritize your spending? Reassessing your goals annually ensures you remain focused, intentional, and adaptable as you navigate the markets.
- Update Your Estate Plan and Trusts
Although estate planning may seem like it’s only beneficial for those with significant net worths, we’d argue that it is important for everyone to regularly review (or establish). Life changes—such as marriages, divorces, births, or deaths—can impact your wishes, while shifting tax laws may create new opportunities or challenges. While going through your new year financial planning checklist, it may be in your best interest to revisit your estate plan to ensure it reflects your current circumstances and goals.
At BIP Wealth, we consider a wide range of factors when helping our clients plan their estate—from their unique financial goals to Power of Attorney and Healthcare Directives. Together, we’ll assist with your annual review to make sure you minimize your tax bill and help create generational wealth for your family.
- Ensure Your Investments Match Your Goals
While investing is a long-term way to build wealth, it is important to review your portfolio with your wealth manager when going through your new year financial planning checklist. Maintaining the right mix of investments such as small vs. large-cap investments, exchange traded funds (ETFs) vs mutual funds, and private vs. public investments, can help ensure you have a diversified portfolio to weather market fluctuations. During your new year financial planning, you can ensure your investments properly match your financial goals and are risk-tolerant. Rebalancing your portfolio can help restore the intended balance between stocks, bonds, and other asset classes, allowing you to manage risk effectively.
- Identify Opportunities for Tax-Advantaged Accounts
One of the best ways to build long-term wealth is through tax-advantaged accounts, such as 401(k) plans. These accounts enable your money to grow over time without the burden of hefty annual tax bills. In fact, regulatory changes in 2024 allowed investors to commit more money than ever to their plans, ensuring more wealth grows tax-advantaged.
For families, don’t overlook the power of Health Savings Accounts (HSAs), too. These accounts provide a triple tax benefit: contributions are tax-deductible, earnings grow tax-free, and withdrawals for qualified expenses are tax-free.
If you have children who are planning on going to college, 529 plans are another great option to consider when going through your new year financial planning checklist. By utilizing accounts like these, you can fortify your wealth for the long term.
- Benchmark Your Business’s 401(k)
If you’re a business owner who offers or is looking to offer 401(k) benefits to your employees, it is not a set-and-forget type of strategy. One of the most important small business new year checklist steps is to benchmark your 401(k) plan. Why is this important? This can help you evaluate the costs of your plan and potentially find ways to reduce your tax bill. During the benchmarking process, your financial advisor will help you identify new investment opportunities to meet both your goals and the goals of your employees.
- Plan Charitable Contributions
Finally, consider whether you’d like to set money aside for charitable contributions when going through your year-end financial checklist, as they can offer more tax benefits in the new year. You can also take advantage of the annual gift tax exclusion, which allows you to gift up to $18,000 (for 2024) per recipient without incurring gift taxes. If you’re married, you can double this amount by gifting jointly. This is an excellent way to transfer wealth to the next generation while minimizing taxes.
If you’re looking for holistic wealth management services like you read about above, be sure to reach out to our team. You can also check out our resources hub to learn more about the latest topics in the financial world.
New Year Financial Checklist FAQs
What should I include in my financial planning checklist?
It is important to establish a new year financial planning checklist that helps you identify financial planning opportunities, new investment ideas, and ways to minimize taxes. This can help you grow your wealth over time while losing as little to tax bills as possible.
Why is a New Year financial planning checklist important?
A new year financial planning checklist can help you ensure your goals are being met and that your financial plan is sound.
Should I consult a financial advisor for my new year financial planning checklist?
Yes! For individuals, families, and business owners, consulting a financial advisor here at BIP Wealth can be a great way to simplify the process. Think of our team as your Personal CFO.
