As summer arrives, chances are you’re ready for a vacation — and perhaps a break from your finances, too. Think about it: After tax season wraps and before the holidays fully come into view, the summer is a natural time to exhale. But a little bit of mid-year financial planning goes a long way toward securing long-term financial goals.
Summer is one of the most overlooked periods of the calendar for money decisions, including when it comes to investing, saving for retirement, taxes, and more. Quietly, though, the season presents unique opportunities. Enough of the year has passed to reflect on what might be in line with your projections or what’s unexpectedly changed. Meanwhile, there is ample time left in the year to refine your financial strategy and potentially improve outcomes.
That’s why a mid-year financial check-in is a valuable tool and best practice for all types of investors. At Price Financial Management, we advise clients on the importance of staying focused in the doldrums of summer.
Revisit Your Goals & Progress
No financial plan goes unscathed. Life happens. There are births and deaths, shifts in the market, marriages and divorces, and unexpected challenges that can arise throughout the year.
Start by reviewing the goals you established at the beginning of the year, including budgeted expenses and anticipated portfolio gains, and measure your progress. Ask yourself:
- Are you on track to meet your savings goals?
- Have you made progress toward major purchases or life events?
- Have you been able to contribute to charities as you planned?
- What major life changes are worth mentioning to your advisor?
- Are there new goals that should be incorporated into your financial plan?
If you're ahead of schedule, you may be able to increase savings or investment contributions. If you're behind, a mid-year adjustment can help prevent larger shortfalls later.
Review Your Retirement Savings
Many investors set their contribution rates for retirement accounts at the beginning of the year and rarely revisit them. It’s a mistake. The middle of the year is an excellent time to evaluate your retirement plan contributions and determine whether you're making the most of available tax advantages.
Contributions to employer-sponsored retirement plans, IRAs, and other qualified accounts can help lower current taxable income while supporting long-term financial goals. In the summer, you should assess whether you're on pace to maximize your contributions and take full advantage of available tax benefits. If you've received a raise, bonus, or experienced changes in income or expenses, you may have room to increase your savings rate.
Evaluate Your Investment Portfolio
Market fluctuations can gradually shift your portfolio away from its intended allocation. A portfolio review can help answer important questions:
- Is your current allocation still aligned wth your goals and risk tolerance?
- Has market performance created the need for rebalancing?
- Are there opportunities to improve tax efficiency?
- Have any life changes altered your investment timeline?
Regular reviews help ensure your portfolio continues to support your broader financial strategy.
Don't Forget Tax Planning
Waiting until tax season often limits your options. By reviewing your situation now, you may uncover opportunities to reduce surprises and improve tax efficiency. With the help of an advisor, consider going over the following:
- Income and withholding: If you've experienced a raise, bonus, job change, or other income shift, your tax withholding may need adjustment — or else you risk an unexpected tax bill.
- Capital gains planning: Have you sold investments or anticipate doing so before year-end? There could be opportunities to offset taxable gains.
- Tax-loss harvesting opportunities: Periods of market volatility can create opportunities to realize losses that may help offset gains elsewhere in your portfolio.
- Deduction and credits: Organize documentation and evaluate potential deductions or credits related to charitable giving. education expenses, medical costs, business or self-employment activities, and more.
Proactive tax planning is often more effective than scrambling to gather information after the calendar year has ended.
Assess Debt and Cash Reserves
Any thorough financial review should also include an evaluation of liabilities and emergency savings. Before speaking with your advisor, take a moment to review:
- Outstanding debt balances
- Interest rates on loans and credit cards
- Progress toward debt-reduction goals
- Emergency fund balances
If your reserve fund has been depleted or neglected, now is a good time to rebuild it.
Financial success is rarely the result of a single decision. More often, it comes from consistently reviewing, adjusting, and improving your plan over time. While the summer is a natural time to relax, make sure you don’t entirely check out of your finances.
If you haven't reviewed your financial picture recently, now may be the perfect time to schedule a conversation and make sure the rest of the year is working in your favor.
Take the Next Step
At Price Financial Management, we believe that financial planning should never be overwhelming, with the right help. We’ll help you review your existing plan and offer clarity on how to change it. Get in touch with our team to discover what a mid-year check-in can bring for your financial goals.