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  • Writer's pictureDamon C Collins, MBA, AAMS®, CFEI®

Financial Fitness – Mid-Year 2023 Check-In

Summer will officially be here soon, but before kids get out of school and all the vacation planning you did begins to come to fruition, it can be a good idea to take stock of your financial picture and make updates where necessary. Below are a few things you should consider to keep your plan in shape. You organized them by life stage, from having small kids to being closer to retirement. I also included charitable giving, as that happens at every stage.

College Savings Plans

If you started one yet – the sooner you get to saving, the better. You can fund a 529 plan with up to $17,000 per year and still qualify for the annual gift tax exclusion – but you can also fund five years at once if you are behind and want to catch up. If you have a 529 plan, it's a good idea to revisit your allocation as your child gets closer to college age to ensure you're not taking too much risk.

Risk Management

Life insurance is critical to keeping your lifestyle and goals on track. For most people, a term life policy offers the ability to replace your salary during your prime earning years in the event of death. The rule of thumb is the policy should be 5-10 times your annual pre-tax income. Those that want more protection beyond their prime earning years can look at long-term life insurance. Life insurance protects against the loss of income for a family and is also a way to transfer wealth to your family.

Retirement Savings

Volatility in the markets has increased and is likely to remain elevated. If you are within ten years from retirement, you may want to revisit your asset allocation and potentially dial back the risk. If you are 50, you can now make the additional Catch Up Contribution to your IRA or 401(k) up to $7,500. This adds significantly to your retirement savings and is an excellent way to lower your tax bill in the year you contribute.

Non-Retirement Savings

Many options and different account types are used for individuals to save money. The goal of saving money is to increase funds while receiving a decent annual percentage yield (APY) on regular savings, dividends, or capital gain payments on invested funds. Most regular bank saving accounts give you an (APR) of 0.01%, which can be considered low. There are other savings options for your funds, such as High-Interest Savings accounts, Money Market Accounts (MMA), and Money Market Funds (MMF) that can have (APY) ranges between 3.00% - 4.25%.

Long-Term Care Insurance

It's generally sooner than you think to start thinking about long-term care insurance for yourself. Since policies are impossible to get once you need the insurance, it's better to have a plan in place at a younger age because it's less expensive. Long-term care insurance is more customizable and offers many more options, so finding a plan that works for your situation can be beneficial.

Charitable Giving

Suppose you yet sorted out your plan for charitable giving for 2023. In that case, the slower pace of summer can be an excellent time to think about what is meaningful to yourself and your family and where you would like to see your contributions go to make a difference. Plan now so you aren't against year-end deadlines during the busy holiday season.

Setting up a donor-advised fund allows you to contribute now, but you can postpone the decision of what charities you want to give to. A qualified charitable contribution will enable you to take an income tax charitable deduction.

The Bottom Line

Thinking about your financial picture holistically and keeping all the different pieces tuned up is essential to ensure you and your family achieve your goals and stay protected. Taking the time to check in with some of the more important items before you turn to the lazy, hazy summer days will have you in great shape when Fall rolls around. Seek a professional financial advisor if you need help to ensure your goals are aligned for the year.


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All written content on this site is for information purposes only. Diversification and any strategy discussed do not guarantee against investment losses but are intended to help manage risk and return. Opinions expressed herein are solely those of Collins Wealth Management LLC unless otherwise specifically cited. Material presented is believed to be from reliable sources, and our firm makes no representations of another informational accuracy or completeness. All information or ideas provided should be discussed with an advisor, accountant, or legal counsel before implementation.

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