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4 Steps to Give Yourself a Midyear Financial Checkup

How to see if you're still on track to reach your money goals

By Marilyn Timbers, Voya Retirement Coach

We are officially midway through the year, so this is an ideal time to give yourself a money checkup and make some necessary financial changes.

Since the first half of 2016 brought a rocky financial start with increased market volatility and the market tumult from Brexit, there’s plenty to think about as you prepare your finances for the second half. Use this halfway point to re-focus on the financial goals you set for yourself six months ago. If you happened to veer off course, don’t worry — there is still time to get back on track for your 2016 goals and, more importantly, your longer-term retirement plans.

Turning the mid-year point into a time for financial reflection can mean the difference between achieving your long-term goals and falling short. Take the time to review your finances now, so you can thank yourself later in the short term and down the road toward retirement. To help you do it, follow these four tips:

Tip No. 1: Monitor Your Budget

One of the simplest, but most effective, strategies I recommend to my clients at Voya Financial Advisors is to take time at the end of every month to review your spending and ensure you’re not compromising your budget. Setting a few hours aside to do this for a mid-year financial checkup is especially important — as you’re monitoring your spending, you’ll also see how you’ve been doing with savings, investing and debt.

To do this, take advantage of free online tools and budget calculators that can help itemize your monthly income and expenditures, highlight where your money is being spent and identify opportunities to save more.

Another helpful exercise: identify your needs, wants and wishes — and the money you allocate toward those items. Doing this will help you see where you might be spending unnecessarily on “wants and wishes” and determine where you might be able to cut costs and save. (This is also an excellent tactic to help you stay disciplined once you are managing your expenses in retirement.)

The six-month mark is also a great time to review the amount of money you’ve allocated to your emergency fund. Many times, people withdraw money from savings for an unexpected expense and forget to replace it. A good rule of thumb: try to have three to six months of living expenses tucked away.

Tip 2: Review Your Retirement Contributions

One way to stay on top of your retirement readiness is to periodically review how much money you’re allocating to your retirement savings accounts, such as a 401(k) or IRA. Be sure to check that your asset allocation is appropriate for your current age.

I would also recommend checking in with a financial professional to make sure you are maximizing your limits across all accounts that offer tax-advantaged savings, if possible. For example, the 2016 limit on 401(k) contributions is $18,000. However, if you’re over age 50, you can take advantage of a “catch-up” option and contribute an additional $5,000. (The site has specifics on the 2016 retirement contribution limits for employees and the self-employed.)

If you are financially able, now is the time to increase your monthly contributions to lock in those extra tax-deferred investments. Make sure you are also saving toward a company match if one is available or ensure that you are on track to save 10 to 15 percent of your income for retirement.

When contributing to your retirement account, it’s important to think in terms of the monthly retirement income the money will generate, as opposed to a lump sum total in your savings. Online tools such as Voya’s myOrangeMoney retirement calculator will show you the future monthly income you may need in retirement and how you are progressing toward that goal.


Tip 3: Keep a Long-Term View

While negative financial headlines can make for scary reads — such as stories on the stock market drop following the Brexit vote — they can also lead to impulse reactions that run counter to your long-term investing decisions. I always tell my clients to ignore the nerve-wracking news they might see and stick to their investment plans.

With an election and potential interest rate hikes ahead this year, it’s easy to get swayed by the noise. However, it’s most important to keep your focus on the longer-term objectives and avoid any actions that may be inconsistent with your goals.

Tip 4: Re-evaluate Your Tax Withholdings

Although it seems like we just got through tax season, this is an excellent time to assess your tax liabilities to ensure that you aren’t paying more taxes than needed or worse, not enough.

Now is the time to get an early jump on tax moves you might normally wait to make at the end of the year. For example, why not look to make tax-deductible charitable donations now instead of holding off until December? Or make some extra contributions to your IRA.

Additionally, if you are earning more or less than you were at the beginning of the year, you might need to revisit your W-9 form so you’re withholding the proper amount.

If you have a financial adviser, a conversation about your portfolio may also point to tax-saving opportunities around investment losses that are worth keeping in mind. There’s still plenty of time left in the year to mitigate tax consequences, enabling you to have a healthier bottom line in 2016.


Securities and Investment advisory services offered through Voya Financial Advisors, Inc., member SIPC. Neither Voya Financial Advisors nor its representatives offer tax advice.

Marilyn Timbers, Voya Retirement Coach Marilyn Timbers is a financial adviser with Voya Financial Advisors. A Certified Financial Planner, she serves on the Women Advisors Network Board at Voya Financial Advisors. Read More
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