Midyear $ checkup: 5 things to review now

Review goals, investments, taxes, and insurance—plus some planning.

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Key takeaways

  • Review your financial goals—and the investments that go along with them—to see if anything needs to change.
  • Get a tax break by saving in tax-advantaged accounts.
  • Protect yourself and loved ones with insurance and important legal documents such as wills, health care proxies, and more.

Summer is a good time to catch up on your to-do list. One way to do that is by taking stock of your finances with a midyear checkup.

That could accomplish several things. You can think about your financial goals, such as saving for retirement, a house, a child's education, or a financial cushion, and then make sure that you're investing appropriately for those goals. And while you're looking at your financial accounts, you can take care of "housekeeping" items such as checking beneficiaries, which isn't complicated and can have serious consequences if neglected.

Here are 5 things to do in a midyear review.

1. Review your financial goals

You probably have several savings goals and accounts. Your midyear financial review should revisit each of your priorities. Since your ability to save may be affected by your spending, it can make sense to review your spending and see how it lines up with your plan. If expenses have gotten out of hand, look for ways to pare back.

Read Viewpoints on Fidelity.com: 50/15/5: An easy trick for saving and spending

Next look at how much you’re saving for each of your goals. If your life situation has changed, make adjustments as necessary. It can be important to go through this exercise even if nothing has changed to help ensure that your plans stay on track.

For example, if you've been saving for a new home or your children's college education, you might want to adjust those goals based on the current real estate market or college tuition costs. You may need to save more or less money to reach your goals.

It’s important to make retirement savings a priority as well—even thought it may be decades away. Review the amount you’re able to save and evaluate if it will be enough to let you maintain your lifestyle in retirement.

Not sure how much money you may need in retirement? Read Viewpoints on Fidelity.com: How much do I need to retire?

At the same time, check the beneficiaries you've listed on your accounts, no matter what age you are. Your beneficiary designations supersede any directions in your will for accounts that have them—so consistency in who you name as a beneficiary is important.

You can also name beneficiaries on a regular bank or brokerage account—even if it wasn’t part of the account opening process. Make sure your accounts are also titled appropriately for your needs as well.

Tip: Find out how to update your beneficiaries

To learn more about estate planning, read Managing estate planning

2. Check your investments

This is also the time to see what you own, ensure that your investment mix continues to meet your needs, and make any changes that might be necessary. Start by assessing your mix of stocks, bonds, and cash to see if it still matches your risk tolerance, time frame for investing, and financial situation. Don’t forget to include your company stock plans—if you have one, it should be included in your midyear review.

It’s a good idea to review your investment mix and compare it to the target you’re aiming for. For example, if you wanted to have 60% of your portfolio devoted to stocks and it’s now 70%, you could consider rebalancing.

Then, look at specific investments and evaluate their role in your portfolio. If you own mutual funds, see whether they are performing as you expected and if there have been any changes to the fund's investment approach. If you own stock in individual companies, evaluate each company’s current status and prospects, and decide whether they justify being kept in your portfolio.

Read Viewpoints on Fidelity.com: Give your portfolio a checkup and The guide to diversification

3. Get a tax break

A simple way to reduce your taxes is to take advantage of opportunities to lower your taxable income by contributing to tax-advantaged retirement accounts like a 401(k) or IRA.

If you have a high deductible health plan (HDHP) and are eligible for a health savings account (HSA), contributing to the HSA can also give you a tax break. A taxpayer with a marginal tax rate of 24%, for example, could potentially realize a federal tax savings of $240 for every $1,000 in pre-tax dollars contributed to an HSA, traditional 401(k), 403(b), or IRA.

If you have an HDHP, it can be a good idea to contribute at least enough to your HSA to cover your anticipated health care expenses. If you’re not sure how much your health care expenses may be, it’s a good idea to put in at least enough to cover your deductible. You can always change the contribution amount later if you find you need to. HSA contributions are pre-tax and tax-deductible. When you use money saved in an HSA on qualified medical expenses now or in retirement, the withdrawals—of contributions and any investment returns—are tax-free.

Read Viewpoints on Fidelity.com: 3 healthy habits for health savings accounts

If you have a retirement plan at work, make sure you’re contributing at least enough to get the entire match from your employer. If you can save more, one option is to contribute the maximum to your HSA. You can change your HSA contribution at any time. If your HSA is funded for the year and you’ve gotten your match, see if you can save more in your in your workplace retirement account.

Annual contribution limits

For contribution limits on small business retirement plans, read: Small-business retirement plans

4. Protect what's yours

It's wise to evaluate your insurance needs annually to make sure you have the right amount and type of insurance to cover unforeseen circumstances that can derail your finances.

Life insurance may be a good place to start. If your family is growing, you might want to increase the amount of your life insurance to protect your loved ones. Life insurance is mainly designed to replace lost income. As you get older, there are fewer years of income in the future, so the amount of income to replace decreases.

Read Viewpoints on Fidelity.com: What you should know about life insurance

You might also benefit from looking into long-term care insurance, which may offer a variety of features and options.

Don't forget disability insurance as well. You may be covered at work. But it’s a good idea to make sure you're adequately covered just in case anything prevents you from working and earning a paycheck for an extended period of time. Consider if you would be able to pay for essentials or if your disability benefits may leave a shortfall.

Be sure to check your insurance beneficiary designations, too.

5. Review important paperwork

Thinking about a will, health care proxy, and power of attorney can be an uncomfortable topic, but consider the alternative: Do you want someone else making important financial and health decisions on your behalf without any input from you? If you don't have any of these key documents, take the time to set them up.

All of these documents are part of an estate plan—which is something everyone can use. Read Viewpoints on Fidelity.com: 5 steps to create an estate plan

If you have these documents in place, review your paperwork and think about any life events you’ve been through. Marriage, divorce, birth, and death are 4 big events that can affect estate plans, but there are other factors that could affect your planning.

Make sure the people you care about know where to find relevant documents and information too. Consider using a secure virtual safe such as FidSafe® to store copies of important documents and other information, like passwords, financial statements, and wills.

It's worth it

While this might sound like a lot of ground to cover, a midyear checkup is well worth the effort when you consider the hard work you've invested in building and protecting your savings.

Next steps to consider

Explore how to invest your money and get investing ideas to match your goals.

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