2021 Mid-year Financial Planning Guide

By: Kyle McFarland, CFP®

Published on - 07/27/2021

During last month’s blog, The Ultimate Mid-year Tax Planning Guide for 2021, we detailed the considerations you should be proactively monitoring to set yourself up for a successful 2022 tax season. The purpose of this blog is to expand the mid-year considerations beyond taxes and into the other areas of your financial life. 

1) Are your investments in need of a rebalance? 

2021 has been a great year for the stock market, while bonds have been largely flat. As a result, if your portfolio has not been rebalanced regularly, it may be out of line with its intended target allocations—this means that you could be taking more risk than intended. 

Take the time to evaluate each account and calculate your combined allocation across all of your accounts. 


Our advisors can help if you want to understand how to evaluate your risk or clarify the amount of risk you can take. 


2) Are you on track to meet your annual savings goals? 

Now that we are at the mid-point of the year, it is time to evaluate if you are on track with the savings targets you set in January.  We believe the best practice is to automate your savings, but we know that expenses can be variable and that monthly savings won’t always be constant. It is common for cash to build up in our bank accounts. However, when you allocate cash to an investment account, it has an opportunity to grow. 


Here are a few possible strategies if you are looking to allocate your extra cash:

i) Contribute to an IRA or a Roth IRA if you are eligible: The 2021 max contribution for those under the age of 50 is $6,000 and for those above 50 the max contribution is $7,000. If you want to know more about the IRA contribution rules, please click here.

ii) Max out your workplace retirement account by increasing your contribution. For 401k’s, the maximum contribution is $19,500 for those under 50 and $26,000 for those above. 

iii) Fund a taxable investment account to invest non-retirement assets.


3) Should you refinance your mortgage? 

With current interest rates hovering around 3% and near all-time lows, now is the time to call your lender and weigh your options regarding a refinance. 


Here are some options that you might want to consider: 

i) Refinancing into a new 30-year loan with a lower interest rate to reduce your monthly payment.

ii) Refinance your 30-year mortgage to a 15-year loan to expedite your pay-off schedule at a lower rate.

iii)  In certain circumstances, it is worth considering doing a cash-out refinance to utilize a portion of the equity built up in your house in other areas of your life. 



Not sure which option makes sense for you and your unique situation? We can help walk you through your options and determine the best course of action for you. 


4) Is your home underinsured? 

The answer in most cases is yes. 

Even more so than the stock market, the housing market’s growth has garnered national attention. With historically low rates, material costs near all-time highs, and a supply and demand imbalance, median home prices in the US have increased by more than 10%, while some markets have seen 30% growth year over year. As a result, many homeowners are underinsured when it comes to their homeowner’s policy. According to data from insurance.comtwo-thirds of homes are underinsured nationwide by an average of 22%


Take the time to review your policy and contact your agent to make sure you are adequately covered. 


5) Is your Estate Plan up to date? 

The COVID-19 pandemic has brought the importance of having an up-to-date estate plan in place to the forefront. In reality, for most people, their estate plan either does not exist or is in dire need of a refresh. 


Here are a few steps that you can take to ensure your estate is in order: 

i) Confirm you have the essential estate planning documents in place: 

  • Will/Trusts
  • Durable Power of Attorney
  • Health Power of Attorney 
  • Guardianship Designation 


ii) Review your investment accounts to ensure the proper beneficiaries are listed.


iii) Have a conversation with those who will oversee administering your estate to make sure they understand their duties.

Our team of advisors works with estate attorneys across the country that can help if you need professional help with your estate plan.

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