Blog

2022 is here. Are you financially-prepared?

As we kick off 2022, now is an ideal opportunity for you to review your financial position to set yourself up for the year ahead. To help you get started, we’ve put together a short 10-point checklist of financial things to think about.

Following these steps can help us to help you achieve financial peace-of-mind in 2022, which – if early indications are correct – this could be another challenging year. You should discuss your feedback from the results of this checklist with your Peak adviser, and we can review your overall financial plan or investments as needed.

If you feel we need to action this now, please let us know and we’ll make it happen.

For accumulators:

  1. Take a moment to update your net worth. This can be done on the back of an envelope or in a spreadsheet, taking your assets (house, cars, retirement savings, cash, etc.) minus any debt (mortgage, other credit) to appreciate your net worth. By creating this personal balance sheet, you’ll quickly get a holistic view of your situation heading into 2022 – balancing short-term assets like cash against longer-term assets like retirement funds. You may also be pleasantly surprised after a strong 2021 year for growth assets, with real estate and investment portfolios doing well.
  2. Then re-assess your goals. Think about your prior goals and if they have changed. Are there any new financial priorities in 2022 ?
  3. Review your spending habits from 2021. A quick cash-flow budget (monthly income minus expenses) could be helpful here. Are you satisfied with your remaining net saving level ? Can you make better use of these savings in 2022 ? Any changes in lifestyle you’d like to make – eg. is travel back on your agenda ?
  4. Depending on your goals and cash flow, check what contributions you can make to your investments and decide on any changes for 2022. Are you satisfied with the progress towards your goals? Do you need to increase your contributions ?
  5. Review your debt commitments. Are you comfortable carrying this debt level with contemplated interest rate increases ? Could you make advanced repayments or set-up an offset account ?
  6. Think about your tolerance and capacity for volatility with your investments. Are you more/less nervous about financial markets than when we last reviewed your financial plan? Would you feel better if we took some risk off the table ? Or do you need to take more risk to achieve your goals ?
  7. Review your personal insurances. Do you and your family have the foundational cover you need ? Do you need to make any changes to the level of cover ? Can we assist with a review to market costs or levels of cover for you ?
  8. Review your estate plan. Do you have the right beneficiaries and executors listed if the worst should occur ? Do you have a valid binding death nomination of beneficiary with your superannuation fund ?
  9. Review your potential tax position. Tax-year end is still a while away, but do you have any upcoming taxes you need to provision for or can we take action now to reduce your tax liability for the current year ? Are you best structured from a tax perspective ?
  10. Be truthful to yourself and check back on your financial emotions through 2021. Have you felt calm and progressive: or insecure and afraid about your financial future ? Have you done anything to advance your financial education ?

As part of our ongoing services for our Wealth Design clients, in concert with the above, we continue to monitor your portfolio progress too, which we continue to believe is soundly positioned for this unique environment. We retain different assets to help protect against the various risks while taking advantage of the economic recovery for your long-term wealth creation.

For RETIREEs:

  1. Take a moment to update your net worth. This can be done on the back of an envelope or in a spreadsheet, taking your assets (house, cars, pension, savings) minus any debt (mortgage, other credit) to appreciate your net worth. By creating this personal balance sheet, you’ll quickly get a holistic view of your situation – balancing short-term assets like cash against longer-term assets like retirement funds. You may also be pleasantly surprised after a strong year for growth assets, with real estate and your investment portfolio doing well.
  2. Then re-assess your income needs and any short-term financial requirements. Check your withdrawal levels through 2021 – have you been comfortable and is it a safe withdrawal rate given your goals ? Do you have any lump sum amounts you’ll need in the next 1 to 5 years ?
  3. Review your spending habits from 2021. A quick cash-flow budget (income minus expenses) could identify areas where you’d like to make changes. Can you remove or reduce any costs entering 2022 ? Would you like to add items to enhance your lifestyle ?
  4. Think about your tolerance and capacity for volatility with your investments. Are you more/less nervous about markets than when we last reviewed your financial plan ? Would you feel better if we took some risk off the table ? Or do you need to take more risk to achieve your income needs ?
  5. Work through your goals and priorities. Think about your prior goals and if they have changed. Are there any new financial priorities as we enter 2022?
  6. Also review any debt commitments. Are you comfortable carrying this debt level, given contemplated interest rate increases ? Could you make advanced repayments or set-up an offset account ?
  7. Review your personal insurances. Do you and your family have the foundational cover you need ? Do you need to make any changes to the level of cover ? Can we assist with a review to market costs or levels of cover for you ?
  8. Review your estate plan. Do you have the right beneficiaries and executors listed if the worst should occur ? Would you like to consider any advanced bequests, helping your family get ahead now ? Do you have a Power of Attorney in place with a trusted representative ?
  9. Review your potential tax position. Tax-year end is still a while away, but do you have any upcoming taxes you need to provision for or can we take action now to reduce your tax liability for the current year ? Are you best structured from a tax perspective ?
  10. Be truthful to yourself and check back on your financial emotions through 2021. Have you felt calm and progressive ? Or insecure and afraid about your financial future ? Have you done anything to advance your financial education ? (We can help offer some tips and provide resources if desired/helpful).

We hope you can make good use this checklist. If you'd like us to elaborate further on any of the points in the checklist, our financial advisers (Pat Kelly or Jenny Kitching) would be delighted to chat with you. Just call our Wealth Design team on 3360 9898 or email wealth@peakpartnership.com.au.

HOW CAN WE HELP?


Get in touch today...