Straight Talk

Add these 3 points to your year-end financial checklist

Year-end checklist
Year-end checklist

This time of year is perfect for starting to run through your year-end personal finance checklist, according to Manisha Thakor, CFA, director of Wealth Strategies for Women at Buckingham and The BAM Alliance.

The three key areas to tackle in any such annual review, she said, are estate and incapacity planning, risk management (i.e., insurance) and your investment portfolio.

First, make sure you have a will, living will and a durable power of attorney for financial and health matters, and also make sure your beneficiary information is up to date.

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What's a common mistake?

"Clients will go and they'll work with a great estate-planning lawyer, and they'll have a really elegant plan drawn up, and then they forget to actually fund the accounts," Thakor said. In addition, if you've moved between states in 2015, Thakor recommends asking your attorney whether there are any necessary but overlooked "tweaks to your paperwork" required.

Regarding insurance needs, be sure to catalog any new items you acquired.

"Did you get a new car? Did you upgrade your kitchen?" Thakor asked. "Are there things that you need to be telling your insurance agent so that you can make sure that you are fully covered on both the property side and a liability side?" Also, ask your agent to update you on what coverage you already do have, she recommended, and then shop around to see if you can get better policy rates.

Would you like to offset taxes on both gains and income?

When it comes to your investment portfolio, look at asset allocation and diversification.

"It's the mix you choose between stocks, bonds and cash for your personal situation that will have the biggest impact," said Thakor. Also, make sure you understand what she terms your "cash cushion" — knowing where your cash comes from so that your day-to-day life will not change, regardless of any portfolio fluctuations.

"I've found that's one of the single best ways to ensure that you don't allow your emotions to trump your intelligence when it comes to sticking to your investment plan," Thakor said.