The kids are back at school, fees have been paid, and the weather is getting crisp enough to pull out your sweaters.

For many, fall represents a new start, and it’s the perfect season to take stock of your finances.  You still have time to meet this year’s financial goals, and it’s a good time to start focusing on next year.        

Review your goals

Do your financial goals still make sense?  Make a list of your short-term and long-term objectives and see whether they still apply.  Consider whether it’s time to add new goals.

Your investment objectives and goals, as well as your portfolio, can be influenced by any number of events, whether in the markets or changes in your own life.

Related: 20 Simple Steps To Improve Your Finances

Some lifestyle changes include marriage or divorce, the birth of a child, a substantial change in income, approaching retirement, or even buying a home.  Will you need more security, income, or growth from your portfolio?

Do a portfolio checkup

Review the current status of your portfolio:

  • Are you contributing enough to your savings plans regularly?
  • Did your portfolio’s performance meet your expectations?  Are your expectations and targets reasonable and realistic?
  • Are you comfortable with the investments in your portfolio?
  • Is your portfolio adequately diversified?
  • Does it continue to meet your investment goals?

A survey done for a wealth management company revealed a significant gap between how Canadians think they are doing with regards to their retirement plans and the actual state of their plans.

The survey also asked Canadians how much they would need for a comfortable retirement.  16% of the respondents said that $100,000 in their RRSP would be sufficient.

Related: Why Baby Boomers Aren’t Prepared For Retirement

The reality is that $100,000 earning a respectable 6% annually would provide just $10,000 a year for 15 years.  When you consider that retirement could easily last 25 or 35 years that $100,000 nest egg is hardly comfortable.  If there will be little or no other income, it is seriously deficient.

It’s important to take a step back and re-evaluate where it is you want to go and your options to get there.

A fall review will give you lots of time to position your portfolio for the coming year.  Make sure your investments are on track and provide the diversification you need to reach your goals.

Keep up with any changes in investment rules – they are not carved in stone.  Past changes include changes in RRSP foreign content limits, increase in age to convert your RRSP to a RRIF, and changes to RESP grant money availability.

The tax treatment of investment income can also change.  For example, at one time up to $1,000 in interest income was tax-free and there was no tax on capital gains.  The introduction of TFSAs made a lot of people change their investment strategies.

Related: Using Tax Free Savings Accounts In Retirement

New investment products regularly become available that could benefit your portfolio.  Find out what they are.

Rebalance

Rebalancing is where you take action to make your portfolio work for your needs.  Investments fluctuate in value over time, even in non-volatile markets, and that can throw your asset mix out of balance.

You may need to rebalance annually, or even more frequently, to make sure that performance in any one area hasn’t moved your portfolio off course.  It’s also necessary when you add to, or withdraw from, your portfolio.

Keep in mind that short-term market events are not usually good reasons to alter your target asset mix.  If volatile markets cause you to move into lower-risk investments, you might be shortchanging your long-term goals and missing out on a chance to benefit when markets recover.

Related: Do Stock Market Cycles Influence Your Investing Behaviour

Plan ahead

Thank about your short term needs such as holiday shopping, travel or other major purchases.  Advance planning gives you time to get the cash together.

By taking certain actions before year-end, you may be able to cut your tax bill.  Tax credits or deductions may be available for such things as medical expenses, charitable and political contributions, tuition fees, childcare costs, and deductible professional fees if you pay them before year-end.

Organize your financial documents including banking and investment statements, and store them in a safe, accessible place.  It will make it easier to track, review and plan.  Make sure someone else (spouse, relative) knows where your records are kept.

Solutions

There are many online planning tools available to help you evaluate your goals, allocate your assets and calculate savings targets.

Related: How To Build A Better Budget

Whether you like to work with a professional or you’re a do-it-yourself investor it’s always a good idea to regularly review your financial goals and objectives, reassess your portfolio and rebalance as necessary.  Don’t just let your investments ride hoping all will work out.

Make sure your investment plan is on track.


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