8 Financial Chores That Should Be On Your To-Do List

With most of this year suddenly behind us, plenty of financial chores remain for you in 2014. Here are eight to-do items for your list.

1. Review your 401(k). With the Standard & Poor’s 500 and other market indexes at or near all-time highs, revisit your 401(k) asset allocation and, if needed, rebalance. Why not take this chance to activate the auto-rebalance feature if your plan offers one?

Are you on track to contribute the most to your 401(k) this year? Contributions max out at  $17,500 or $23,000 if you will be 50 or older during 2014. Even if you can’t contribute the maximum, bump up your contribution, if you can.

2. Prepare for open enrollment. The advent of Obamacare and the efforts of many employers to rein in health insurance and benefits costs mean managing your employee benefits during open enrollment becomes even more important.

Review your usage year to date and your employer-issued insurance enrollment materials; look for changes in your benefits. Then examine your current insurance use and anticipated changes in your personal circumstances, combined with the new benefits to make the best choice.

Also note that many organizations use this time to change the 401(k) menu or other details of your benefits.

3. Update estate planning documents. The recent deaths of Robin Williams, Lauren Bacall and Joan Rivers remind us of our own mortality. If you don’t have a will, a named guardian for your minor children or other appropriate estate planning documents, get this done. Being unprepared can devastate your family and loved ones and can, frankly, distort memories of your life.

Also double check your beneficiary designations on retirement accounts, life insurance policiesannuities and other assets to ensure that these documents are consistent with your intentions.

4. Set up a retirement plan if you are self-employed. Options include simplified employee pension (SEP-IRA), a Solo 401(k), a savings incentive match plan for employees (SIMPLE IRA) or even, for a dwindling few, a pension plan.

You must establish some plans such as the Solo 401(k) by the end of the calendar year; you can contribute up to when you file your annual tax return next April. Don’t forget a traditional individual retirement account, which allows you to direct pretax income up to specific annual limits toward investments that grow tax-deferred. Even limited contributions can be a great start.

5. Check your Social Security statement. The Social Security Administration plans to mail statements again after halting this practice several years ago. Review your statement to be sure you received credit for all years you worked and that you understand all benefits on your statement.

You can also go Social Security’s site to check your benefits.

6. Track down old pension and retirement accounts. Many of us switch jobs a number of times – commonly leaving retirement accounts, both 401(k)s and pensions, in our wake. Make sure you’re aware of all your old accounts.

If you find an old 401(k) or similar defined contribution account, decide what to do with the account balance. Typically, you can leave the money where it is, roll it to a new employer’s plan if allowed or roll it into an IRA. If the amount is small in relation to your other retirement and investment accounts, you might consolidate it with those other accounts for easier tracking.

You may enjoy a few choices with a pension. At the very least, ensure that your old employer has your current contact information (apprise them of any changes in the future). You may also be able to take the benefit as a lump-sum and roll it into an IRA or to receive a monthly benefit down the road.

Forgotten retirement accounts might each seem small and insignificant. I’ve seen more than a few folks with several floating around, though, and at some point this can become real money.

7. Review your investments and your strategy. Markets at or near record highs marks a good time to review your investment holdings, overall asset allocation and your strategy going forward.

Good questions: How did your stocks do? Any at or near your selling price target (you have such a target, right)?

Is your allocation to stocks higher than your target? Are you taking more risk than you want? Did your gains push you closer to your financial goals and can you now reduce risk?

8. Get a financial plan in place or update your current one. Whether you are at an earlier point in your career, namely your 30s or 40s, or on the home stretch toward retirement, seek out a qualified financial advisor to help you focus in on your goals and on strategies to achieve those goals.

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Written by Roger Wohlner, CFP. Roger Wohlner is a fee-only financial adviser at Asset Strategy Consultants based in Arlington Heights, Ill., where he provides financial planning and investment advice to individual clients, 401(k) plan sponsors and participants, foundations, and endowments. Please feel free to contact him with your investing and financial planning questions. Check out his Financial Planning and Investment Advice for Individuals page to learn more about his firm’s services. Roger is active on both Twitter and LinkedIn. Check out Roger’s popular blog The Chicago Financial Planner where he writes about issues concerning financial planning, investments, and retirement plans. He is also a regular contributor to the US News Smarter Investor Blog and has been quoted extensively in the financial press including The Wall Street Journal, Forbes and Smart Money. Roger is a member of NAPFA, the largest professional organization for fee-only financial advisors in the country. All NAPFA Registered Advisors sign a fiduciary oath promising to act in the best interests of their clients.

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