We made it to 2021! The whirlwind that was 2020 is in the rear-view mirror—sort of. Even though we’re only a few days in, for now, we remain positive as move forward into the new year.

Have you made your new year’s resolutions? This year, especially, it seems to be something that’s on people’s minds. According to a recent survey conducted by Finder, “An estimated 188.9 million adult Americans (74.02% of the population) say they’re determined to learn something new, make a lifestyle change or set a personal goal in an effort to better themselves in 2021, a 15.17% increase from the previous year.” The survey seems to indicate that for many of us the events of the last year may have sharpened our focus on improving our lives.

Whether you put stock in resolutions or not, as we mentioned in Part 1 of “New Year, New Priorities,” one of the best things you can do for yourself and your family is to prioritize your financial fitness as we start 2021. Let’s take a look at five more financial tips in Part 2 of our “New Year, New Priorities.”

6. Increase Your Tax Efficiency

“…in this world nothing can be said to be certain, except death and taxes.” While the attribution of this quote has long been disputed (some say it was Benjamin Franklin, others say Daniel Defoe), its sentiment is very clear: Tax planning is a strategy that can help you increase your tax efficiency, ideally for both the short and long term.

While most people only think about taxes as we move closer to April 15, for maximum benefit, tax planning is something that we should be engaged in year-round. Pretty much every financial and investment decision you make has a tax impact and should be taken into consideration as part of your tax planning. Certain tax strategies may allow you to defer some of your current year’s tax liability to another year, by timing when certain expenses are paid and/or controlling when income is recognized. Some of the most common tax planning activities include the following:

  • Contribute to tax-advantaged accounts – You can reduce your taxable income by contributing to your retirement plan, such as 401(k)s, 403(b)s, or IRAs. You can read more about this in Part 1.
  • Take advantage of all available tax deductions and tax credits – There are the well-known tax credits and deductions, such as the Child tax credit, Charitable donations deduction, Mortgage interest deduction. But there may be a number of others that you may not be aware of such as the Residential energy credit or Health Savings Account (HSA) contributions deduction, for example. Contributions to HSAs are tax-deductible, and the withdrawals are tax-free, as long as you use them for qualified medical expenses.
  • Set up a 529 plan to fund children or grandchildren’s future education – Funds in a 529 plan can grow tax-free as long as the funds are used to pay qualified education expenses. You can prepay up to $75,000 (or $150,000 if your spouse consents to gift-splitting) without incurring a gift tax.
  • Tax gain-loss harvesting – A technique used for more sophisticated investors, it can use your investment portfolio’s losses to offset your overall capital gains tax liability.

For 2020, as a result of the Setting Every Community Up for Retirement Enhancement (“SECURE”) and Coronavirus Aid, Relief, and Economic Security (“CARES”) Acts, there are a number of changes to the rules for contributing to retirement accounts and around taking required minimum distributions. So, as always, please speak to your tax specialist or wealth advisor about your specific tax situation and how to incorporate tax planning into your personal financial plan.

7. Review Your Life Insurance Coverage

Life insurance provides protection against financial loss for loved ones that would result from the death of an insured person. Permanent insurance—such as Whole Life, Universal Life or Variable Life—provides lifelong coverage, customizable features and a cash value component. It also includes an investment component known as the policy’s cash value and is a particularly valuable tool for tax, retirement and estate planning due its flexible duration, cash value and tax benefits.

The new year is a perfect time to assess your coverage and determine if you need to increase it. If you’ve experienced any significant changes in your life—such as marriage, the birth of a child or the purchase of a significant asset—you want to ensure that you have appropriate coverage to help protect your family.

Senior Wealth Manager Ryan Foley, APMA®, CRPC®, notes, “Insurance is the crucial backbone to any successful financial plan. Just like developing a diversified investment portfolio, it is important to understand the potential risks and outcomes of an unforeseen event.”

There’s a lot of advice out there on how much coverage you should carry, anywhere from seven to 30 times your annual salary—quite a range. Most importantly, you want to make sure that your unique needs and obligations are addressed. You may have to do a little math! As you think about how much life insurance you need, you may want to take into consideration:

  • The income you want to provide
  • Living expenses, such as mortgage or rent, etc.
  • Children’s education expenses
  • Funeral expenses
  • Other debts or expenses, such as car loans or credit card debt

You could then deduct the assets that will be available to your loved ones, including savings, retirement accounts, 529 plans, Social Security, etc. in order to determine your number. There are numerous life insurance calculators online that may be able to help you determine your needs.

We recommend speaking to your wealth manager about your specific requirements and goals before making any decisions regarding life insurance. Foley adds, “A sound protection strategy should be customized to your unique situation to strike the right balance of benefits, cost and risk to protect what is most important to you.”

8. Assess and Pay Down Debt

While the holiday season may have looked different than usual, we’re guessing the associated spending you racked up this year wasn’t much different than previous years. Not to mention the rest of the year as many of us were stuck inside—supplied with endless deliveries of Amazon packages and takeout food. All those purchases have added up and now is the perfect time to assess the damage to your wallet.

As you start to assess your debt, you want to prioritize high-interest debts, such as credit cards. If you can, pay more than the minimum balance to help decrease the amount you pay in interest over time. If you’re carrying a lot of other debt such as college loans, you may want to consider consolidating to take advantage of lower rates. As always, make sure to speak to your wealth manager to help you assess which steps may be best for your situation.

9. Protect Your Identity and Review Your Credit Report.

Fraudulent activity has been on the rise this last year, as unscrupulous actors prey on people’s fear and uncertainty. So now more than ever, you want to be vigilant about protecting your identity, including keeping an eye on your credit score.

Our lives are operated almost entirely online these days—even more so as a result of the pandemic—including banking, shopping, social media, healthcare, dating, working, schooling and more, which is why protecting yourself online is so important. The beginning of the year is a great time to make sure that your systems and settings are secure and up to date.

We recommend checking your credit report at least annually. It can help you monitor your credit health as well alert you to potential credit fraud. You are entitled to one free report per year from each of the three major credit-reporting agencies—Equifax, Transunion and Experian. You can use a site like www.annualcreditreport.com to request your reports. Your other financial service and/or credit card companies may provide access to your credit report throughout the year—check it often to keep your identity safe and keep your credit on www.annualcreditreport.com track. If you see any unusual activity or mistakes, you should file a dispute regarding any erroneous information.

10. Plan for Buying Property

With interest rates continuing to stay at all-time lows, purchasing a home or vacation property is top of the list for many people right now. In addition to the typical things you’ll need to think about like location, how much house you can afford, and mortgage rates, here are a few other tips to get you started on your home-buying journey—especially if you’re a first-time homebuyer:

  • Set a savings budget: As with any budget, the key is to set your goals, make a plan to achieve them, and stick to it. The key to building up the money you’ll need for a down payment is to put away money on a regular basis, whether it’s every week or every month.
  • Put off making any large purchases: Making a large purchase such as a new car or a new household appliance can put a large dent in your down payment fund, not to mention damage your access to credit.
  • Work with trusted advisers: Before you start frequenting open houses, you’ll want to put together your team who can help support you along the way. You’ll likely want to include a real estate agent, mortgage broker, real estate attorney; in addition, your wealth management professional can help you determine the best steps to take from a financial perspective over the short- and long-term.

Save for Something Fun!

Although not technically a financial fitness tip, this last reminder is equally lofty yet, perhaps, the most difficult to implement!

After everything we’ve been through this year, we thought that the best way to round out our Top 10 Financial Resolutions for 2021 would be to encourage everyone to save for something fun like a once-in-a-lifetime family vacation or extravagant wedding or whatever might give you and your family something to look forward to in 2021.

Here’s hoping that this year brings us brighter days and a clearer road ahead—cheers!

Our financial resolutions are by no means exhaustive and are only meant to serve as a guide as you think about your financial wellbeing. We encourage you to try incorporating a couple of these pointers into your 2021 resolutions’ list and collaborate with your advisors to discuss your own unique situation and short- and long-term life management needs. Remember that your assets fund your goals, so check in regularly to evaluate your progress. And if you falter, simply reset and check in with your wealth manager to regain that focus.



These tips are informational in nature and not intended as individualized financial, legal or tax advice. Wealth management and financial planning decisions are complex and fluid and should be structured around each client’s unique situation and needs. Parties should carefully consider all related benefits, risks and costs and speak to their trusted advisors before making any significant decisions.

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