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While the flashier New Year’s resolutions — like eating healthier, exercising or learning a new skill — tend to get all the hype, those of us in the “boring” world of financial planning often get overlooked. But just as a new year can provide a fresh start in our other areas of life, your financial plan can benefit from a full reset as well.
Adjusting your Contributions
With the Christmas season behind us, the start of the year is a great time to revisit your retirement contributions. Although there’s no “correct” amount to save, a rule of thumb we suggest is 10 percent of your income, then adjusting from there, based on your personal situation and budget. You will have Social Security (and maybe a pension), but other than that, no one else will be funding your retirement!
For our overachievers who max their retirement accounts, your limits have increased for 2026. Be sure to review these updated limits for IRAs, HSAs and 401(k)s.
Reviewing Insurance Coverage
Major life changes such as marriage, the birth of a child, purchasing property, job changes, or retirement likely prompt conversations about updating or adding insurance policies. However, smaller changes can matter as well. A pay raise may increase your need for life or disability insurance; rising property values may call for higher home insurance coverage; paying off debt may reduce the amount of life insurance you need; and when children get their first full-time job, you may be able to remove them from your health insurance plan. Minor changes like these can be overlooked, and the beginning of the year is a great time to review.
Net Worth
While net worth is often associated with the ultra-wealthy, tracking your net worth is a great way to measure your progress year over year. The process is simple: Add up your assets. These are your bank accounts, retirement accounts, your home and any other real estate. Then add up your debts. These are your mortgage balances, car loans, student loans and credit cards. At the bottom, simply subtract the debts from the assets. Boom — that is your net worth. Your goal is to grow this figure year after year, especially during your working and accumulation years. Keep these records on file and watch your progress over time!
Estate Planning
Estate planning is another topic we often associate with only the ultra-wealthy or elderly. But as Lee Corso would say, “Not so fast, my friend!” Even if you are not concerned about who gets your belongings when you pass away, I can assure you it’s better for you to decide than leaving it up to a county judge. For many people, a simple will paired with beneficiary designations is enough. However, in more complex situations, such as larger estates, or unique family dynamics, a trust may be the better option. Estate planning also allows you to designate someone to make financial and medical decisions on your behalf, while you’re still alive. You will need a lawyer to set up most of these things.
Required Minimum Distributions
For those born in 1953, it is your turn to take your required minimum distribution, the “dreaded RMD.” This is the point at which the IRS is tired of you holding your retirement money tax-deferred and “wants their cut.” Be sure to take your RMD sometime in 2026. Your financial planner will calculate the amount for you.
For those over 70.5, take a look at a qualified charitable distribution (QCD). This allows you to directly donate to a qualified charity (church, etc.) and avoid taxes paid on the distribution. This is a great tax savings strategy. Talk to your financial planner or accountant to see if this is an option.
Cole Mertens is a CERTIFIED FINANCIAL PLANNER™ at Wallstreet Group Advisors in Jefferson City. Contact him at 573-636-3222 or cole@wallstreetgroupadvisors.com. Securities and Advisory services offered through CreativeOne Securities, LLC member FINRA/SIPC and an Investment Advisor. Wallstreet Group Advisors and CreativeOne Securities, LLC are not affiliated.
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