Your Wealth Building Calendar of Activities


Around the end of the year, articles listing all the things you should have done to reduce taxes appear in the news. Other articles provide advice for planning for the year ahead. The truth is that you should be planning for building your net worth and reducing taxes all year. The best way to do that is to establish a regular routine.

Weekly Activities

You should look at your checking and savings account balances at least weekly. This will help to ensure that your spending is in line with income. It also allows you to take steps to rein in spending before month end bills come due if you have been overspending.

You should review all transactions weekly to ensure that your debit card is secure. Review the credit cards you use frequently too. There are many retail security breaches. It makes sense to keep a close eye on your money and credit cards. If you notice an unauthorized transaction, you can notify the bank right away before thieves drain your checking account.

Ensure that both sides of bill payments posted properly if you pay online.

Monthly Activities

Balance your checking accounts. Many large banks have online access that makes balancing accounts easy.

Transfer funds to your investment accounts if you don’t have automatic transfer set up. If you do, verify that the funds went in to your investment account.

Invest any excess funds in your sweep accounts. If you believe you may need the funds in the short term, transfer them to a money market fund or mutual fund.

If you are older than age 70 ½, you are must take distributions from IRAs and 401Ks annually. Many people take withdrawals monthly to cover living expenses. Review your withdrawals and balances to be sure you are on track. If not, adjust the monthly withdrawal for the rest of the year.

Quarterly Activities

Estimated taxes are required quarterly. If you have a regular job, your employer withholds taxes. If you are self-employed or retired, you must pay your taxes yourself. The U.S. government and most states have convenient websites for tax payments.

Gather the statements from all your investment accounts. Calculate your investment mix. Match the results against your investment strategy. If your mix is off, rebalance your portfolio.

Yearly Activities

Review your will. Make sure that it accounts for changes in your assets. Ensure that you have named the right heirs. See a lawyer to make any changes.

You may want to discuss setting up a living trust that allows you to enjoy your wealth while protecting it from inheritance taxes.

Ensure that you have taken all your required distributions. If your withdrawals don’t meet required minimums, you must withdraw the difference before the end of the year.

You don’t have to spend the withdrawn funds. If you don’t need the money to live on, you can invest it. You can’t put it in another IRA. You can invest it in any regular investment account.

Many retirees draw too much from retirement accounts in the early years of retirement. Most people can withdraw about 4 percent of the value of retirement accounts.

Other retirees are afraid of running out of money. They don’t withdraw as much as they could. Sometimes they avoid spending money they could afford to spend. Skimping on withdrawals affects their enjoyment of retirement. It may also affect their overall quality of life.

You should work with a qualified financial planner that you trust. The financial planner can help you to calculate required withdrawals. They provide advice on potential investments. Financial planners also help re-balance your portfolio.

Just be certain that you balance the portfolio to match your strategy rather than to meet the planner’s personal earnings goals.

Work with a CPA or a qualified tax accountant to prepare your taxes. This is especially important if you have a large or complex portfolio. It is critical if you own a business.

Once your return is complete, talk to your lawyer or accountant about ways to reduce taxes for the upcoming year. If you received a large refund or owed money, ask your accountant to recalculate your estimated quarterly tax payments.

Setting up a regular schedule to review your wealth is a good practice. It helps ensure you are on target for increasing wealth.

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