As we enter the New Year, it’s a great time to reflect on your overall financial planning strategies from the previous year to make necessary adjustments for 2022. The previous year brought in unexpected challenges and those who were working with the proper financial management experts were able to pivot for their financial and retirement planning.
Regardless of where you stand now with your financial and retirement planning, implementing the right strategies for your own unique situation can help get you back on track. With that in mind, our team of financial planning experts at ARQ Wealth Advisors is here to offer some financial planning tips for 2022.
If you require a financial planner in Scottsdale, AZ, give us a call today! The best way to start the New Year is to stop by our office or give us a call to learn more about the no-cost no-obligation financial planning session. You can give us a call at 480-214-9572 or visit this page here to learn more.
Review Last Year Goals and Savings
The first thing to do is assess your progress from last year. Many people had financial trouble last year, either from losing their job or unexpected fluctuations in the stock market. So, you may have fallen off track with your financial goals.
The end/beginning of the year is also a good time to assess your emergency saving situation. If you are still employed, experts recommend having at least three to six months of liquid savings in case emergency strikes. One to two years of liquid savings is recommended for those who are already retired.
Most savings accounts have a low interest rate that might not outpace inflation. Looking for ways for how to make sure you aren’t losing the value of your cash savings to inflation? That’s where our team of experts come in to help you create a specific financial plan that’s tailored to your unique situation.
Although we are physically located in Scottsdale, AZ, we help clients all over the United States with wealth management planning – reach out now to learn more!
Create a Financial Budget
No matter your income, you should have a monthly budget to keep your payments and bills in order. Creating a budget itself is easy—it’s sitting down to do the work that’s the tough part!
The simple way to create a budget is to add up your total monthly expenses (e.g., rent/mortgage, utilities, food, car payments, insurance, etc.) and split your monthly income between the categories. Make sure that you account for any one-time expenses you may have to pay, such as car repairs or medical bills.
Many people switched jobs last year, so your annual income might differ from the previous year. You can’t budget for every possible expense, but you can create a tentative budget to serve as a guideline for the year.
With a lack of planning, even high-income earners can outspend what they need to save and can end up in difficult financial times. It’s key to get started early with this so that you have a realistic picture of your expenses, what can be cut/reduced, and how much you’ll need to save to work towards your ideal retirement scenario.
Review Retirement Accounts and Savings Options
The ongoing pandemic has caused many individuals to reconsider their relationship to their careers. One major change is that younger people are considering retiring earlier than average. People realize that their health and youth are not worth as much if they have to work all the time.
If you want to retire earlier than the usual timeline, you will have to maximize your retirement contributions as early as possible. You can put more into retirement by cutting spending in other areas. Additionally, it’s key to know how higher inflation can play a role in cutting into your savings and what you can do to pivot for this with your financial planning strategies.
Analyze Your Current Portfolio
Last year was an absolute roller coaster for the stock market. After plummeting in March 2020, stocks rebounded and hit an all-time high just a few months later. As of the time of this article, the Dow Jones I is up over 20% and the S&P 500 is up approximately 29% for 2021.
We can expect some volatility over the next year, so now is the time to analyze your portfolio and make necessary changes to protect against inflation and hedge against potential future losses.
The first thing you should do is check whether your savings rate and portfolio balance are still on track to reach your determined goals. Most experts recommend aiming for a savings rate of 15%, but you can go higher depending on your retirement time frame.
Additionally, legislators are considering raising the capital gains tax in 2022, so you may want to realize any losses so you can offset your qualified gains when paying taxes in the future.
Sit Down with a Certified Financial Planner
Even if you’ve never put together any type of financial or retirement plan, meeting with a financial planner is always a great first step. A planner can help you assess your current financial situation and put together a plan for the future. Financial advisors assist clients with their money, which could include:
- Providing financial advise
- Managing clients’ finances
- Planning taxes and estates
- Buying and selling funds
- And more
It is a good idea to start seeing a financial planner as early as possible. The more you work with them, the better they can craft a financial plan that meets your goals, wants, and deadlines. Financial advisors can also potentially help you save money during tax season by finding ways to lower your total tax burden.
If you are looking for an expert financial planner in Scottsdale, AZ, contact ARQ Wealth Advisors online here or give us a call at (480) 214-9572 to schedule a consultation. We are always interested in helping our clients work towards their financial and retirement goals. Let’s sit down and discuss how we can help during your no-cost no-obligation financial planning session.