BY SCOTT M. KAHAN
With the stock market hitting record highs, potential interest rate increases and the ongoing uncertainty as to what is going on in Washington, now is the time to organize. Here are a few quick things to address to get started.
Review your portfolio.
With the rally in equity prices, it’s probably a good time to review your asset allocation. A simple way to re-balance your portfolio is to first set what percent of your portfolio should be in each asset class. Then when reviewing your portfolio, the sectors that have gone up will be over weighted and should be reduced, while the underperforming sectors will be under weighted and can be added to. If you follow this practice, it forces you to sell high, buy low and take the emotions out of investing.
Review Your Taxes and Cash Flow.
If you are getting large tax refunds each year, review your withholding. Financially, it’s actually better to get a small refund or owe a small amount. When you get a refund, it’s your money being returned to you with no interest. In other words, you gave the government an interest free loan. Adjust your withholding or estimated tax payments to ensure you are not over or under paying your taxes by too much. Then look to see if you are fully funding your retirement plans. If not, use that extra money each pay check to fund your retirement plan. The retirement plan contribution usually is tax deductible thus saving you even more in taxes.
Review Your Estate Planning.
When was the last time you looked at your wills and other estate planning documents? Make sure all beneficiaries are in place in retirement accounts. Review to make sure you have named guardians for minor children. If you have avoided setting up your estate plans, now is the time to address this important issue.
Scott M. Kahan, is a Certified Financial Planner® professional and President of Financial Asset Management Corporation, a fee-only wealth management firm located at 26 South Greeley Avenue in Chappaqua. Call Scott Kahan at 914-238-8900.