Your Mid-Year Financial Planning Checklist

Long sunny days and the smell of barbeques are sure signs that summer has arrived. But before you kick off your shoes and disconnect, consider checking your financial plan to make sure you’re still tracking toward your short- and long-term goals. Changes in the market or shifts in your personal circumstances sometimes require adjustments to your financial plan.

You may have received a significant pay increase or begun a long-awaited retirement. Or perhaps the market’s recent ups and downs have left you wondering how your portfolio is holding up. Does your financial plan reflect your changing circumstances? Here are five important items for your mid-year financial planning checklist to help you stay on track:

1.   Review Your Portfolio

Periodically reviewing and rebalancing your portfolio is important in any market environment. For example, the ups and downs of the markets can cause your portfolio to drift away from your goal, potentially making it riskier or more conservative than intended. Your Morgan Stanley Financial Advsior can help you make the adjustments needed to bring your investments back into alignment with your risk tolerance and overall investing strategy.

Mid-year is also a good time to prepare for what may be ahead for markets. Morgan Stanley’s outlook for most equity and fixed-income markets is largely positive heading into the second half of 2024, as interest rate cuts are potentially on the horizon across the globe. Ask your Financial Advisor how to position your portfolio for such changing economic and market conditions in light of your short- and long-term goals. 

2.   Check in on Your Retirement Plan

Checking in on your retirement plan can help ensure you’re tracking toward your goal of a financially secure retirement. A mid-year review is a great time to assess where you stand. If you are off-track, work with your Financial Advisor to determine why.

For instance, if you’re still saving regularly but falling short because your investments aren’t performing, your Financial Advisor may suggest changes to your asset allocation strategy or to specific investments you’ve chosen. This may entail shifting portfolio risk, to the extent you’re comfortable. You may also consider increasing your savings levels, stretching out the time horizon until you retire or even reducing the ambitiousness of your retirement spending plans. For some investors, the most palatable option is a little of each of these approaches.

Alternately, if you are doing better than anticipated, maybe now is a good time to reassess your risk exposure to lock in that progress and help protect against future market volatility.

3.   Revisit Your Insurance Needs

While priorities like budgeting and taxes often take center stage at the beginning or end of the year, summer can be an ideal time to focus on areas of your financial life that may otherwise get overlooked. For many people, insurance coverage is one of those areas.

Changes in personal relationships, lifestyle needs and performance of the market are often good reminders to check-in. Make sure your policies are titled correctly, benefit levels meet your needs and planned premium payments of flexible permanent policies remain as scheduled. Review your life, disability and long term care policies to help ensure your coverage sufficiently protects your wealth, livelihood and loved ones. For folks who have increased their net worth or who own multiple high-value assets, it may also be time to think about property and casualty insurance  or increasing coverage if you already have a policy. 

4.   Refresh Your Estate Plan

Estate plans typically reflect a person’s wishes at a moment in time. As you move through life, important events such as births, deaths and marriages, as well as evolving personal relationships, could affect both whom you entrust with sensitive medical and financial decisions that may one day need to be made on your behalf at the end of your life, as well as how you ultimately want your wealth and assets distributed after you pass. That’s why it’s imperative to periodically review estate planning documents closely, especially if you’re in retirement. While often challenging, this type of planning is essential if you hope to ease a difficult process for the people you love and to help  ensure that your wishes are respected.

5.   Identify New Tax-Saving Strategies

Often, the smartest tax strategies are put into action well before Tax Day. Now that tax season is in the rear view mirror, you can start by looking over your latest Form 1040 federal tax return with your Financial Advisor to identify strategies that may help reduce your income tax bill in the future. These may include ideas such as donating to charity, “harvesting” investment losses and/or saving for future education costs in a tax-advantaged account.

If you’re retired, you may also want to connect with your Financial Advisor to review your current sources of income and identify potential opportunities to maximize the tax-efficiency of your portfolio distributions through techniques such as income smoothing and intelligent withdrawals. Morgan Stanley’s Intelligent Withdrawals tool uses sophisticated analysis across all of your accounts to quickly find the right withdrawal strategy to help reduce the taxes you may owe.

Working with a Financial Advisor

Looking toward the second half of the year, it’s important to review and adjust your plan where needed. Having a mid-year financial planning checklist can help you gauge your progress toward goals and course-correct where necessary. Your Morgan Stanley Financial Advisor can provide additional insights and apply strategic learnings to your financial plan to help guide you in areas that could benefit from potential improvement or expansion.