Strategic Ways to Optimize Financial Planning in 2021

January 29, 2021

As 2021 gets underway, there’s a palpable sense of optimism both domestically and internationally as we move forward with an expanded rollout of the COVID-19 vaccine.

We hope the New Year will bring an increased demand for travel, dining, and entertainment that will give the private sector a much-needed boost. We also hope that 2021 will be a healthy and prosperous year for you and your loved ones.

As we all know, the New Year is a natural time to reflect, reassess, and take advantage of potential opportunities. Now is an ideal time to reevaluate your goals, review your investment portfolio, and organize items for tax preparation. Here are a few strategic ways to make the most of 2021 and to start the year off on the right foot:

Evaluate liabilities disguised as assets. You may have real estate that has been stagnant or a negative cash-flowing asset creating headwinds to growing your net worth. This is a great time to evaluate your assets, take stock, and consider liquidating liabilities disguised as assets. Perhaps you have a work of art or a collection of valuable objects that you no longer love. Remember that gold is on the rise, so you might want to consider selling jewelry that you don’t wear and don’t plan to pass on to your children or your grandchildren. Consider converting those non-performing assets to cash and to invest that money in higher performing options.

Realign expenses with values and priorities. Take the time to carefully review 2020 bank and credit card statements to fully understand where funds are being spent. Most people haven’t dissected this information, but might be surprised by how much is being spent in one category. Does the spending align with your values and priorities? If not, think through how to better align the two in the New Year.

Recalibrate your savings. If you’re comfortable doing so, max out your 401(k), IRA, or SEP accounts to take full advantage of tax benefits for 2020 and 2021. It’s not too late to make 2020 contributions to retirement accounts. Speak with your financial advisor or your accountant in order to determine the best strategy for your unique situation. Each additional dollar invested, assuming a 6% annual return, will be worth almost six dollars in 30 years. Money saved today will compound over time to provide additional savings during retirement. You can also invest additional funds in a 529 account to save for your children’s education or make other strategic investments to make the most of your money over time.

Gather items for 2020 tax preparation. It’s not too early to start preparing paperwork for your accountant for your federal and state income taxes. If you made charitable donations in 2020 or sold property or taxable assets, make sure to provide the details to your CPA. Don’t wait until the last minute to give your information to your accountant, so you can file your 2020 taxes on time, without requiring an extension. The sooner you give your tax preparation information to your accountant, the better.

Take a long-term perspective. Both good and bad financial decisions can be magnified as time goes on. Taking a long-term perspective when making those decisions can allow them to compound over time. Think carefully about setting an appropriate asset allocation that is aligned with your willingness and ability to bear risk. Whether the market is up or down, your long-term investment strategy should largely remain unchanged. It’s paramount to ride out volatility rather than reacting out of emotion during the heat of moment. Ultimately, you want to put yourself in a position where you can answer short-term market swings with confidence and presence of mind.

Meet with your financial advisor. It’s always a good idea to check in with your financial advisor during the first quarter to discuss where you stand and to determine if changes should be considered. Whether you meet in person or schedule a virtual meeting, we recommend reviewing your portfolio periodically to evaluate your overall strategy and risk tolerance. We are here to help you stay on track and to achieve or exceed your financial goals.


On behalf of the entire team at The Fiduciary Group, we would like to wish all of our clients a happy 2021 and look forward to working with each of you in the New Year. We sincerely appreciate the trust you place in us and are deeply honored to work with you throughout the year.

Need help with financial planning in 2021? Please reach out to us to get started.