PREPARING FOR 2022

from KCC_ KC Magazine January 2022

GHOSTS OF SEASONS PAST

PREPARING FOR

Now that the holidays are behind us and we are gearing up for the new year, the pressure is on for New Year’s resolutions! The new year is a great time to set new goals and check in on your progress towards existing goals. We encourage you to think about your financial goals during this process. It is not a bad idea to periodically revisit your personal finances and financial objectives.

HERE ARE A FEW SUGGESTIONS:

 CREATE A BUDGET. There are many different financial planning programs available today to help you create a budget as well as an overall financial plan. These platforms range from simple calculators to complex, comprehensive platforms that your financial advisor may utilize that can automatically update balances daily. Why are there so many tools? Because this is such an important yet neglected task. Make 2022 the year you tackle your budget.

 ESTABLISH AN EMERGENCY FUND. As part of your overall financial plan, you will be asked to establish an emergency fund. It is recommended that you have at least three months’ worth of living expenses sitting in a money market. If you are self-employed or have an erratic income, you should have six to nine months set aside. Don’t let lessons from the pandemic go to waste! Make sure you have rigor around your emergency fund.

 REVIEW YOUR RETIREMENT PLAN

CONTRIBUTIONS.

If you are fortunate enough to have a retirement plan offered where you work, make sure you are making the most of it! Many people only save enough to get their employer’s matching contribution, if there is one. Instead, recognize that the real power in these plans is your ability to save for your own retirement on a tax-advantaged basis. Although the maximum amount you can save will vary by the type of retirement plan you are in, for 2022 participants in a traditional

401(k) plan can defer up to $20,500 into their account. Age 50 or over? In 2022 you are allowed to defer an additional $6,500 into your 401(k). Pay yourself first!

 TAKE CONTROL OF DEBT. We tell our clients that there is “good” debt and “bad” debt. Good debt pertains to money borrowed on an appreciating asset. Bad debt is money borrowed on a depreciating asset. In general, a mortgage on your home is hopefully “good” debt while financing a new car is often “bad” debt. Starting with the new year, pledge to work to reduce your debt, and start with bad debt first.

 REBALANCE! With the incredible bull run many equity markets have had, you may find that your portfolio has grown significantly and is no longer allocated in a manner that reflects your risk tolerance. Even worse, many of us have been lulled into thinking that our risk tolerance has become more aggressive than it was a year ago. Now is not the time to get greedy. Make sure your investments are properly allocated.

 REVIEW YOUR ESTATE PLAN. Think estate plans are only for the wealthy? Think again. Whether a simple will or a living trust with a pour-over will, if you are reading this article, you need an estate plan. Consult a qualified estate planning attorney yet this quarter. If you have not revisited your estate plan in over five years, it’s time to do so. Include verifying your named beneficiaries in this exercise.

 CHECK YOUR CREDIT REPORT. It’s not just markets that have been on the rise. Phishing attacks, ransomware payouts and supply chain attacks are all up significantly year to date. Your best defense is to monitor your accounts regularly and to periodically check your credit report. If something doesn’t look correct, the faster you react, the better off you should be.

 REVIEW YOUR INSURANCE

COVERAGE.

Insurance companies are constantly reviewing and evaluating risk. With the pandemic as well as the increase in extreme weather events, life insurance companies as well as property-andcasualty companies may be adjusting their charges for risk, adjusting coverage parameters or both. Review your policies with your agents to make sure you have the right coverage for your needs. If you are like us, you probably feel that each year passes more quickly than the last. Before 2022 takes off at an even faster pace than 2021 did, take a moment and work though the list above. Your future self will thank you!

Thismaterialisintendedfor informationalpurposesonlyandshouldnot be construedaslegalortax advice andisnot intended to replace theadviceofa qualifiedattorney,tax advisor, or planprovider . FILE# 3977060.1

 Tom McCartney andSharon Piet are teammates atMyAdvisor & Plannerandare RegisteredRepresentatives andInvestment AdviserRepresentatives withM Securities. Securities andInvestment Advisory Services are offeredthroughM HoldingsSecurities,Inc., a RegisteredBroker/DealerandInvestment Adviser, MemberFINRA/SIPC.MyAdvisor & Planner isindependently ownedandoperated.

Tom andSharon can be reachedat info@mapyourfuture.net, at630-457-4068,or you can visit themat www.mapyourfuture.net.

Securities and Investment Advisory Services offered through M Holdings Securities, Inc. (Member FINRA/SIPC). My Advisor & Planner is independently owned and operated.