- Invest Now
- Understanding the Risks
- Build an Emergency Fund
- Talking About Tax-Deferred Investments
- Diversify Your Investments
- Evaluate Your Investments
- Asset Allocation
- Dollar Cost Averaging
- Annual Checkup
- Finding Money to Invest
- Children and Money
- Compounding Interest
- Investment Types
- Protecting Your Assets
- Four Dumb Excuses
- Ups and Downs
- Put Balance Back Into Your Portfolio
- Regular Check-ups
- Help Diversify Your Portfolio
- Common Investing Errors
- Into Perspective
- Financial Windfall
- Your Retirement Plan in Today's Volatile Market
Regular Checkups Help Keep Your Financial Future Healthy
Just what the doctor ordered.
Regular checkups are just as good for your financial health as they are for your physical health. They're a great way to re-evaluate and rebalance your financial life. Start by examining your current savings, investments and income. Knowing where your money is now and where you want it to go will help show you how much you'll need for the future.
Benefits of a financial checkup
Goal number one is to get an accurate view of your financial situation and any gaps that might exist. Think about whether your goals have changed and if your savings and investments still meet them.
Significant life events – marriage, divorce, having children, starting a business, etc. – may have an impact, as well.
Once you know where you're going, you can:
- Assess how comfortable you are with risk
- Rebalance or diversify your portfolio
- Weigh options based on your personal needs
- Monitor your progress
When should you have a financial checkup?
At least annually. Year-end makes sense. With all of your account statements and financial records on hand, you’ll have a clearer and more complete view of your investment picture.
Otherwise, evaluate your financial situation whenever key events occur in your life. Such as when you:
- Get a new job, big promotion or bonus
- Get married or divorced
- Welcome a new member in the family
- Receive an inheritance
- Sell a major asset
- Retire
- Pay off a major loan (home, business, college debt)
- Win the lottery
Pay close attention to investments for retirement
One of your top priorities is probably saving for retirement.
As the timeline to retirement shrinks, make sure your investment mix is keeping you on track for retirement.
If your portfolio is producing low returns, you may not be accumulating enough for a comfortable retirement.
It may be time to change your investment mix to potentially increase your return potential and by spreading your assets around so that the fluctuations of a single security have less impact on your overall portfolio – in other words, diversify your portfolio.
The use of diversification and asset allocation as part of an overall investment strategy does not assure a profit or protect against loss in a declining market. Keep in mind that investing involves risk, so there’s no guarantee you’ll reach your investment goals.
Use a benchmark or evaluation tools
Just keep a long-term perspective when you’re working on long-term investment goals, such as saving for retirement.
- Evaluate your investments' performance by stacking them up against similar investments or indexes
- Find out if you’re on track financially by getting your retirement readiness score
- Look for questionnaires, guides and calculators in magazines and websites
Next steps
If you don’t want to go it alone, contact your accountant, banker or investment professional. An annual evaluation of your investments may be part of their regular services.
Once you’ve completed your financial checkup, keep it handy. You’ll want to refer to it throughout the year to monitor your progress and note any changes for next year’s financial review.
