5 Actions You Should Take Going Into 2016


As we button up the end of another year here at IFA, we wanted to remind clients of some of the things they should be thinking about when it comes to their finances going into 2016. While we could put together quite an extensive list, we also understand this is a very busy time of year for most of our clients. So we boiled it down to a list of 5 actions you should take going into 2016.

1. Take the Risk Capacity Survey

While it is highly unlikely that your capacity to take risk has changed significantly, it is always good to recheck. Like going to visit your doctor every year for an annual check-up, re-examining your risk capacity score is a great first step in making sure you are on the right track. Our risk capacity survey is based on the 5 Dimensions of Risk Capacity, which are 1) time horizon and liquidity needs; 2) attitude towards risk; 3) net worth; 4) income and savings rate; and 5) investment knowledge. 

2. Complete the Retirement Analyzer

After you have retaken the risk capacity survey and received your risk capacity score, you can use our Retirement Analyzer to see if you are on the right track towards your goal. Our calculator runs a Monte Carlo analysis, which takes inputs like your risk capacity score, income and savings rate, desired income stream in retirement, anticipated social security benefit, and estimated life span and simulates 10,000 different potential outcomes to give you an idea of the degree of confidence in reaching your long term goal.

3. Speak to Your IFA Wealth Advisor

Once you have taken the Risk Capacity Survey and completed the Retirement Analyzer, we urge you to reach out to your IFA Wealth Advisor. First, we need to make sure that your risk exposure is in alignment with your risk capacity. Second, if you are not on the right track to reach your retirement goal, then your IFA Wealth Advisor can help fine tune your plan to put you back on the right track. Lastly, you can discuss any other parts of your financial plan with your Wealth Advisor, such as insurance, estate planning, charitable giving, college planning, or social security.

4. Gather All Necessary Tax Related Information

In order to have a seamless tax preparation process, it is important to start gathering any tax related documents as early as possible. While most W-2 do not come out until the end of January or beginning of February, other documents, such as your 1099-INT and 1099-DIV will be available from your custodian in and around early January. These documents cover the interest payments, dividends received, and capital gains distributions from the mutual funds in your IFA Index Portfolio. You will also find tax reports on any short term and long term capital gains/losses incurred from transaction taken within your portfolio by IFA.

5. Review Beneficiary Information and Required Minimum Distributions

Beneficiaries assigned to Individual Retirement Accounts (IRAs), individual brokerage accounts, and trust accounts should be reviewed annually to ensure that it is consistent with any legal documents such as trust documents and/or wills.

It is also important to make sure that, if you are over 70.5 years of age, you have taken your Required Minimum Distribution (RMD). Your RMD is the minimum amount of distribution that a client must withdrawal from their tax-deferred accounts and is required by the Internal Revenue Service. Penalties will be applied to any minimum distribution that was not taken out in time. Should you need assistance in changing account beneficiaries or your Required Minimum Distribution, you may reach out to your designated IFA Client Service Specialist (CSS).