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Five 'Easy' End-of-Year Ideas to Polish Your Portfolio

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The holiday season is here. That means it's time to fully prioritize your most important assets — family and friends. 

Beginning with Thanksgiving and ending sometime after the New Year, many investors focus on enjoying time spent with their loved ones, and conversely, not so much in what is happening with their investment portfolios. 

But don't worry. As always, your IFA wealth advisor stands ready to field questions and help you to handle any financial concerns that might arise. And that's especially true this time of year, whether you're preparing to celebrate turkey day and Christmas or getting ready to usher in the new year. 

For those who want to plan ahead as 2020 approaches, we've put together a quick list of five fairly easy and less-time consuming tasks that can give you a head start on polishing your financial cupboard. Please feel free to tackle any or all of these items in your spare time. 

1. Retake Your Risk Capacity Survey

Although the chances are very likely that your score has not dramatically changed over the past 12-months, it's still a good idea to double-check by taking the Risk Capicity Survey at least one more time. 

Although a shorter version exists, we still strongly suggest that everyone take the 25 question survey for a more accurate recommendation.

This is probably the most important variable in your overall financial plan. Just like getting your annual check-up at the doctor, we just want to make sure that everything is fine in terms of your overall risk exposure.

2. Complete the Retirement Plan Analyzer

After you've retaken the Risk Capacity Survey and received an appropriate risk capacity score, you can use our Retirement Plan Analyzer to see if you're on the right track towards meeting your financial goals.

This IFA calculator runs a Monte Carlo analysis, which takes a number of different inputs -- like your risk capacity score, income and savings rate, desired income streams in retirement, anticipated Social Security benefits and estimated life span -- and simulates 10,000 different potential outcomes to give you an idea of the degree of confidence you might have in reaching your long-term goals.

IFA also provides a 401(k) Savings Calculator to estimate your balance at retirement along with a Retirement Income Calculator.

3. Speak to Your Wealth Advisor 

Once you have taken the Risk Capacity Survey and completed the Retirement Analyzer, we urge you to reach out to your wealth advisor.

First, you need to make sure that your risk exposure is in alignment with your risk capacity. Then, if you're not on the right track to reach your retirement goals, your IFA wealth advisor can help fine tune your plan.

Lastly, you can discuss any other parts of your financial plan with an IFA wealth advisor. Topics include issues relating to insurance and estate planning to charitable giving, college planning and Social Security. 

4. Review Beneficiary Information and Required Minimum Distributions

Beneficiaries assigned to 401K accounts, Individual Retirement Accounts (IRAs), individual brokerage accounts and trust accounts should be reviewed annually to make sure such information is consistent with any legal documents such as trust documents and/or wills.

It's also important to make sure that, if you're 70.5 years of age or older, 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. Again, please check with your IFA wealth advisor.  

5. Analyze Your Budget

Managing your monthly budget can be difficult and frustrating. Specifically, one of the most important aspects of controlling your household expenses is to determine where your money is going. Along these lines, we've designed an online calculator to help you do just that. By entering your income and monthly expenditures, you can see how much you have left to save and where your money is being spent.

In addition, you can click the "View Report" to see your entries results in detail, which can help identify areas for improvement. (Each employee should target at least a 10% contribution amount into their 401K plan in order to achieve desired retirement goals.) 

Also, feel free to reach out to your advisor about using other software tools at IFA's disposal to help deal with different household budgeting issues. In particular, IFA's wealth management team is trained to work through different planning scenarios, both simple and complex. Among other programming platforms, we utilize eMoney. This highly adaptable interactive suite allows us to tackle all sorts of financial scenarios, from preparing to pay college expenses and buying a house or car to projecting future health care costs. 

Considering that our standard advisory fee includes a complimentary and detailed financial plan, we encourage all of our clients to talk to their IFA wealth advisor about how best to take advantage of such in-house resources. 

IFA also offers tax-related planning and advice through our IFA Taxes division. We work with both existing clients and outside investors, including business owners and their families. This team's services menu ranges from addressing accounting and bookkeeping issues to tackling tax preparation paperwork. You can contact John Dahlin, who is a certified public accountant, regarding questions about costs and how to get started with an in-depth review of your unique tax situation at: (888) 302-0765. 

Again, these five tips are offered as suggestions of items to check at your convenience during any holiday downtime. Each is designed to reduce how much time you'll have to spend next year on fine tuning your portfolio reviews and monitoring the progress in following your personal IFA financial plan. 

Most of all, IFA's advisors want to take this opportunity to wish you a happy holiday season. And remember to be good to not only your friends and family, but also to yourself. After all, that's why we're here -- to support you in reaching your 'big picture' financial goals. Don't be shy about reaching out to us, either now or anytime in the future. 

This is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, product or service. There are no guarantees investment strategies will be successful. Investing involves risks, including possible loss of principal. This is intended to be informational in nature and should not be construed as tax advice. IFA Taxes is a division of Index Fund Advisors, Inc.