Your Mid-Year Financial Checkup – Part I

Another year seems to be flying by us, with more than half of 2015 already in the books. What have you crossed off your to-do list this year? What have you been putting off?
We all know that no season fosters procrastination quite like summer. And if you haven’t had the time or motivation to assess your personal financial situation, I don’t blame you in the slightest (relaxing at the lake sounds better to me, too). But the days are getting shorter already, and before we know it, we’ll be ringing in the New Year.

Recall the wise words of Ben Franklin: time is money. Don’t let another year pass you by without a checkup; it can be vital to your long-term financial health.

Here’s a guide to help you verify you’re still on track for financial success in 2015:

Mid-year financial checkup_PT1

Review Your Goals and Update Your Financial Plan

Take a minute and reflect on where you were at this time last year. What has changed?
As financial planners, we often find that clients’ goals and priorities can shift significantly from one year to the next — and there’s nothing wrong with that. But as your goals change, so should your financial plan.

At a minimum, your plan should be reviewed on an annual basis, and even more frequently as life throws changes at you. While no financial plan is perfect, the best plans are accurate and current. Now is a great time to meet with your financial advisor to discuss any changes to your goals or personal financial situation that may have a material impact on your financial plan. And if you don’t have a comprehensive plan or an advisor to coordinate the process, there’s no better time to get started! Here are a few tips for finding a financial advisor that’s right for you.

Now that you’ve reviewed your goals and updated your plan accordingly, this also may be a good time to revisit your asset allocation. In light of your updated financial plan, have there been any changes to your personal situation that may require you to reconsider how much risk you’re taking in your portfolio? Your advisor can help you assess these changes and ensure they’re reflected in your investment strategy.

Re-evaluate Your Retirement Plan

If you haven’t taken time to review your retirement plan contributions, make it a priority before the year gets away from you. Retirement plan contribution limits are frequently increased from year to year to adjust for inflation. In 2015, the contribution limit for traditional and Roth individual retirement accounts (IRAs), subject to income phase-outs, is $5,500, with an additional “catch-up” contribution of $1,000 available for individuals over age 50. The contribution limit for 401(k) plans is $18,000, with an additional $6,000 in catch-up contributions available for those age 50 and older.

If you aren’t maxing out your retirement plan contributions, take a look at your budget. Perhaps you got a raise this year, or you’re expecting a bonus that can allow you to increase your contributions. By making traditional deferrals into your retirement plan, you also may be able to reduce your current income taxes.

Once you’ve reviewed your contributions, take a look at your investment allocation.
Are your funds invested appropriately? Has your account been rebalanced? Due to market fluctuations, your account may look very different than when you first set it up. Additionally, the investment options in your retirement plan may have changed, so keep an eye out for ongoing opportunities to lower your fees and improve the expected return of your plan.

Consider Rolling Over Your Old 401(k) Plan

If you changed jobs recently, you may have a 401(k) account from a previous employer that you’ve been neglecting. The good news: consolidation is typically easy, and you have a number of options to consider. So let’s get that tidied up!

If your new employer has a 401(k) plan, you may be allowed to roll over your old 401(k) assets into the new plan:

— This may be a good choice for some investors, depending on their unique situation and plan. However, it’s important for you to assess whether the costs and investment selection in your new 401(k) plan are reasonable before pursuing this option. Consult your plan advisor for more information.

— Advanced planning tip: This opportunity also may be particularly attractive if your income is too high to make deductible IRA/Roth IRA contributions, and if you don’t have any traditional IRAs currently. By rolling over the assets into your new 401(k) instead of an IRA, you may be able to take advantage of the popular “Backdoor Roth IRA” contribution strategy. Consult with your CPA or financial advisor for more guidance on this topic.

You can also roll over your old 401(k) plan into an IRA:

— From an investment perspective, this option affords you the most flexibility. You can open an IRA with many financial institutions and gain the ability to hold a broad range of investments. Before making a decision, regroup with your financial advisor to evaluate whether this option is suitable for your situation.

Check Your Credit Score and Tackle Debt

Many consumers are unaware that under the Fair Credit Reporting Act (FCRA), they are allowed a free, annual credit report from any of the three major credit reporting companies (Experian, TransUnion and Equifax). If you haven’t checked your credit in the past year, take a few minutes and submit a request for your report. There are three ways you can do this:

1. Visit;

2. Call 877-322-8228;

3. Complete the Federal Trade Commission (FTC)’s Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

One important thing to note: at this moment in time, is the only website that is authorized by the government to facilitate free credit report requests. There are many imposter websites that can come with strings attached or potentially compromise your personal information. Avoid these sites, and do not reply to any phone calls or email messages from other companies claiming to suggest they can provide you with a free credit report. If a company solicits you for personal information, it is likely part of a scam.1

If you find any inaccuracies on your credit report, be sure to contest the errors with the FTC, the agency or the lender that provided the information to the agency. To preserve your credit score and standing, it’s important to dispute the errors as soon as possible. For more information, visit the FTC’s website.

After checking your credit score, make a plan to tackle your outstanding debt.
Certainly, this is not to suggest that you should try to pay off your house as soon as possible. Some debts, like your mortgage, are considered “good debts”, because they can provide a significant personal benefit (home ownership, in this example) and may be tax-deductible. Depending on your comfort level regarding debt and interest rates, you may want to focus on making regularly scheduled payments on your good debts and invest the excess cash instead of accelerating your principal payments.

You should focus on tackling any “bad debts” you may have first. Bad debts include credit card debt and payday loans, which can carry very high interest rates, hurt your credit score and cause serious problems if not managed carefully. Before the year ends, try to pay off your bad debts as quickly as possible. If you’re having difficulty managing your debt, consult with your financial advisor and/or a reputable credit counseling organization to develop a plan.

Review Your Charitable Giving Plan

You’re likely well aware that there can be tax benefits to charitable giving if you itemize deductions on your tax return. What you may not have considered is that the amount of the benefit in any given year can vary substantially with your income. The higher your marginal tax bracket, the more “bang for your buck” you’ll receive from your donations in that year.

Of course, some people feel strongly about giving to their preferred charities on an annual basis. But if your income is expected to change significantly this year or in the near future, you may want to consider taking a more strategic approach to charitable giving. Maybe you’re planning to sell that vacation home on the beach next year and will have a large capital gain. Or perhaps you’re retiring next year and expect to have a lump-sum payout of your deferred compensation arrangement.

In situations like these, it may make sense to scale back or even eliminate your charitable giving this year and “double down” on your donations next year. Or better yet, consider using a donor-advised fund (DAF) to mitigate your tax impact in your projected high-income earning year, if you have the assets to make a substantial donation. If you expect a large change in your income over the next few years, consult with your financial advisor or CPA to formulate a charitable giving plan that can help boost your tax savings.

Organize Your Tax Documents and Prepare for Next Year

Yes, we’re actually talking about your taxes in the summer. While no sane person enjoys the process, organizing your tax documents now can save you the headache when your CPA asks for them next year. You likely won’t receive your year-end tax documents until early next year, but there’s a good chance you have already acquired a number of documents that are relevant to this year’s return. If you still haven’t filed away your receipts, charitable contribution confirmations and the like, now would be a good time.

Seek Out an Advisor (If You Haven’t Already)

If you haven’t yet, now is the perfect time to seek professional financial advice. Sure, you could try to tackle this mid-year checkup on your own, but your time is precious (particularly when you’re trying to enjoy what’s left of the summer)! Working with an objective, professional advisor to better understand your current financial standing, organize and simplify your financial life, and construct a comprehensive plan is one of the best investments you can make in your financial future.

Your mid-year financial checkup doesn't stop with this list! 
Check out Part II where we review insurance considerations, Social Security and additional facets of your financial plan.


Wipfli Financial Advisors, LLC (“Wipfli Financial”) is an investment advisor registered with the U.S. Securities and Exchange Commission (SEC); however, such registration does not imply a certain level of skill or training and no inference to the contrary should be made. Wipfli Financial is a proud affiliate of Wipfli LLP, a national accounting and consulting firm. Information pertaining to Wipfli Financial’s management, operations, services, fees and conflicts of interest is set forth in Wipfli Financial’s current Form ADV Part 2A brochure and Form CRS, copies of which are available from Wipfli Financial upon request at no cost or at Wipfli Financial does not provide tax, accounting or legal services. The views expressed by the author are the author’s alone and do not necessarily represent the views of Wipfli Financial or its affiliates. The information contained in any third-party resource cited herein is not owned or controlled by Wipfli Financial, and Wipfli Financial does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Wipfli Financial of the third party or any of its content or use of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner, investment advisor, attorney or other professional.
Anthony Perillo

CFP® | Financial Advisor

Anthony Perillo, CFP®, is a Financial Advisor with Wipfli Financial Advisors in Milwaukee, WI. Anthony focuses on comprehensive financial planning for high-net-worth investors and families, and also specializes in tax-efficient investing strategies.

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Your Mid-Year Financial Checkup – Part I

time to read: 7 min