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It’s A New Year! Is It Time To Reevaluate Your Financial Plan?

It’s A New Year! Is It Time To Reevaluate Your Financial Plan?

January 11, 2021

As we transition into a new year, we naturally think about our long-term plans and reevaluate our choices. There are a few key areas in particular that especially deserve our attention as the world navigates the next big transition.

Tax Strategy Planning

In the wake of a major election, questions always arise about how tax laws are likely to change and how to prepare for the possibility of new tax structures that could impact your financial plan. Tax-deferred vehicles such as a 401(k) or a traditional IRA can provide tax savings when tax rates are high, in contrast to a Roth IRA, which has advantages when tax rates are low. The recent stimulus bill contains several tax law changes, including the ability to roll forward unused FSA funds from 2020, 100% deductible business meals, and penalty-free retirement plan withdrawals for families affected by declared disasters. (1)

Tracking Retirement Funds

As we learned from the Great Recession, it is important to stay proactive when it comes to your cash flow and retirement funds. The temptation to adopt a “set it and forget it” approach can create financial blind spots, especially when the demands of work and family make it challenging to carve out time to review finances. If you have not kept track of your investment accounts, retirement plan balances, and other assets, make the commitment to start keeping a pulse on the health of your family’s finances at least once a quarter, if not monthly.

Insurance Coverage

Inadequate insurance coverage is a common issue that can derail retirement plans, especially in the event of unforeseen health problems or injuries that force individuals to retire early. A 2020 study found that only 57% of Americans have life insurance, and that 40% of policyholders reported that they wished they had bought coverage sooner. (2) Life insurance policies are not all created equal, and many policies offer living benefits that you can draw on if you need help paying medical bills or other expenses.

Estate Planning

Regularly reviewing your estate plan is a crucial component of your financial strategy. We are firm believers that every family estate plan should be reviewed every five years (at minimum). Life moves quickly, and it is too easy to forget just how much can happen in a short period of time. Arrivals of new children or grandchildren, health conditions, asset purchases or liquidations (such as buying a new home), marriage/divorce, retirement, unemployment, remarriage, and deaths in the family can all change the long-term picture. We also recommend reevaluating the structure of your trusts (see our earlier article that discusses common estate planning mistakes we have seen over the years).

Follow And Understand The Markets

As financial advisers, we naturally watch the markets in greater detail, but everyone should make an effort to watch their own investment portfolios to maintain at least a basic understanding of what’s happening. You do not need to become a securities expert or know every financial investing term, but you should know the risk level of the investing strategy that you choose, and the implications of the different approaches to investing. If you do not feel like you have a good grasp on your overall investment strategy, we are more than happy to review this with you.

As we ring in the new year, it’s wise to anticipate and prepare for the changes that every season of life brings. If you are ready to reassess your long-term goals or have any questions whatsoever, please feel free to call us anytime at (818) 841-1746 or email to schedule a consultation.

About Trevor

Trevor Cole is a CERTIFIED FINANCIAL PLANNER™ (CFP®) professional, licensed life and disability insurance agent, and the Director of Compliance at CTA Wealth Advisors, Inc. a fee-only Registered Investment Advisory firm in Burbank, California. Trevor has 24 years of experience in the financial services industry and is an integral part of the CTA Wealth Advisors, Inc. team. He is passionate about helping clients create a secure plan for their future and helping them find the freedom to spend their time on what’s most important to them. Trevor has a degree in finance from California State University, Northridge, and worked in the insurance industry at both State Farm and The Prudential before joining the CTA Wealth Advisors, Inc. team. Learn more about Trevor by connecting with him on LinkedIn.


  1. A diversified portfolio does not assure a profit or protect against loss in a declining market.
  2. For a comprehensive review of your personal situation, always consult with a tax or legal advisor.  Neither Cetera Advisor Networks LLC nor any of its representatives may give legal or tax advice.
  3. All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful.
  4. Distributions from traditional IRAs and employer sponsored retirement plans are taxed as ordinary income and, if taken prior to reaching age 59½, may be subject to an additional 10% IRS tax penalty. A Roth IRA offers tax free withdrawals on taxable contributions. To qualify for the tax-free and penalty-free withdrawal of earnings, a Roth IRA must be in place for at least five tax years, and the distribution must take place after age 59½ or due to death, disability, or a first-time home purchase (up to a $10,000 lifetime maximum). Depending on state law, Roth IRA distributions may be subject to state taxes.