Maintaining long-term financial health requires the same attention and routine care as any other important asset. Investment portfolios fall out of balance, tax situations change, insurance needs evolve and life events can reshape financial priorities. Regular reviews can help ensure your wealth strategy remains aligned with current goals and positioned to support future needs.
“It's important to periodically reflect on your financial health, evaluate habits and identify new opportunities to grow and protect your wealth,” said Judy Raffa, Head of Strategic Advisory Services at PNC Private Bank.
Whether prompted by a major life event, changing market conditions or simply a commitment to good financial stewardship, taking time to review your wealth plan can help uncover opportunities, address gaps and avoid surprises.
Consider these nine opportunities to help keep your financial plan aligned with your goals:
1. Prepare for Tax Season
Tax Day may be April 15, but preparing for taxes is a year-round endeavor. It’s important to routinely examine any changes in status, planned gifts, or investments that may trigger new tax events. If you anticipate a significant tax bill, make a plan to set aside funds or even borrow to pay it.
Additionally, you may consider strategies to offset tax liabilities with losses or invest in more tax-favorable assets such as ETFs or municipal bonds. Before making significant changes to asset allocation or selling securities, it’s always best to discuss changes with your financial and tax advisors.
2. Revisit Your Insurance Needs
Insurance may not be the most exciting part of your wealth plan, but it’s not one to overlook. Home improvement projects, new cars, boats, collections, or financial windfalls can change your net worth and liabilities over the course of a year. Review your existing coverage, where there may be gaps and if you might need additional coverage through your homeowners, auto or an umbrella policy. You may consider specialized insurance solutions for collections like art, jewelry, or fine wine that may not be covered through homeowners’ insurance.
Additionally, it’s important to review the policy terms of your existing coverage to make sure premiums and deductibles are in line with your needs. Insurers can and do change policy terms from year to year, so it’s important to verify that what you have is serving your needs from both a coverage and cost perspective.
3. Review and Rebalance Your Portfolio
A lot can happen in a year and it’s important that your investments reflect the best interests of your current life situation and long-term wealth goals. Whether market conditions have left you overexposed to a specific asset class or a life event means you’re ready to take on more or less investment risk, it’s good practice to take at least an annual look at your portfolio.
“You might discover that you need to make adjustments, or it might confirm that you’re still on the right track. The important thing is that you take the time to look,” Raffa said. “Reviewing your portfolio on a scheduled basis is an essential part of keeping your wealth strategy on track.”
If you do make adjustments to the asset mix as part of an annual review, it’s important to consider any cost and tax impacts. Working with an investment advisor can help to ensure you are making informed choices about the best long-term structure for your portfolio.
“And remember, rebalancing a portfolio is less about timing the market, and more about serving long-term wealth goals,” Raffa said.
4. Consider Tax-Loss Harvesting
It’s also important to evaluate opportunities to improve tax efficiency within your investment portfolio. Market volatility may create opportunities for tax-loss harvesting, a strategy that involves realizing investment losses to offset capital gains and potentially reduce tax liabilities. While tax considerations should not drive investment decisions on their own, reviewing positions that may no longer align with your goals can help identify opportunities to enhance after-tax returns.
Before selling securities or making significant portfolio changes, it's important to consider the broader implications for your investment strategy and consult with your financial, investment and tax advisors. A thoughtful approach can help ensure short-term tax benefits remain aligned with long-term wealth objectives.
5. Plan for Major Purchases and Evaluate Reserves
Think through your sources of income, how you’re spending money and how both factors are impacting financial goals. Do you plan to make a major purchase, such as a vacation property, boat or fund a child’s college education? Are there opportunities in the year ahead to re-evaluate how you are using debt? Now is a good time to think through short-term financial goals and plan for how to achieve them without sacrificing your long-term wealth.
Part of long-term security is making sure you have adequate reserve funds in the case of unexpected expenses. Assessing what you are contributing to your reserves and how those funds are invested to grow long-term is good annual maintenance.
6. Revise Planned Gifts
Do you provide an annual gift to a nonprofit, or plan on making a significant financial gift to family over the course of the year? An early year financial review can be a good time to revisit how, when, to whom, and the amount you plan to give.
Over the course of a year, changes to the status of beneficiaries, nonprofits, and legislation can mean significant tax liabilities to both donors and beneficiaries that may require changes in your gifting strategy. Additionally, you may have new or fewer beneficiaries to consider.
Read more: Learn more about gift tax exclusions and other strategies for making annual gifts.
7. Update Your Business Succession Plan
Like your portfolio and planned gifts, if you’re a business owner, it’s important to revisit your business succession plan on a regular basis. Think through any factors, like financial performance or personnel changes that may impact when or how you plan to transition your business. If the eventual transition of your business is a major factor in your retirement planning, you may need to think about timing and the potential allocation of business assets to serve your lifestyle needs once you’re finished working.
Like your portfolio, reviewing your business succession plan may mean nothing more than affirming that you’re still on the right track.
8. Review Your Estate Plan
Estate planning may seem like a set and forget, but it’s prudent to revisit yours regularly. Changes in family circumstances, asset values, charitable intentions, business interests or tax laws can all affect whether existing plans continue to reflect your wishes. An annual review can help ensure your estate plan remains aligned with your goals and identify opportunities to improve the efficiency of wealth transfer.
Take time to revisit wills, trusts, beneficiary designations, powers of attorney and healthcare directives. Any major life event, such as marriages, births, deaths or changes in financial circumstances, can warrant an update to your plan. Reviewing these documents periodically can help avoid unintended consequences and provide greater confidence that your legacy will be carried out according to your intentions.
9. Meet with Your Advisor
A financial advisor can help evaluate your current strategy, identify potential gaps, recommend adjustments and ensure you remain on track to meet your long-term goals. Regular reviews can also provide an opportunity to assess your advisor relationship, evaluate costs and determine whether additional services may benefit your overall plan.
“Just as routine maintenance helps keep a home or vehicle operating smoothly, regular attention to your finances can help keep your wealth plan aligned with your goals,” Raffa said. “Working with an advisor can provide peace of mind that you're taking the right steps today, while also helping you adapt as your circumstances, priorities and opportunities change over time.”
