Kickstart Your Financial Planning for 2025: Key Tasks to Start the Year Right

By: Shawn Maloney | Owner, Retire Wise LLC

As we start a new year, it’s natural to reflect on another year in the books, offering us a moment to pause, look back at where we've been, and prepare for where we’re headed. It’s an opportune moment to reflect on one of the most crucial aspects of financial planning.

In our financial endeavors and personal journeys, timing often emerges as the invisible hand that guides success. Just as the right decision made at the right moment can accelerate growth, an ill-timed move can create undesirable challenges. As we usher in a new year, understanding the nuances of timing can empower you to seize opportunities and navigate potential pitfalls.

Timing can shape the trajectory of our future in profound ways. It’s a great time to recalibrate your goals and strategies. Time your financial decisions to align with potential opportunities and personal milestones!

Whether your goals include saving for retirement, purchasing a home, or simply building financial security, here are essential tasks to jumpstart your financial planning in 2025.

1. Review Your Financial Goals

Begin by revisiting your short- and long-term financial objectives. Did you meet your goals in 2024? If not, identify the obstacles and make adjustments. Set SMART goals for 2025—specific, measurable, achievable, relevant, and time-bound. 

2. Evaluate Your Budget

Update your budget to reflect current income, expenses, and priorities. Account for rising costs or new financial obligations. Use budgeting tools to track your spending and stay on course.

3. Essential Retirement Planning Tasks

Whether you're years away from retirement or preparing to transition, these essential tasks will help secure your financial future.

A. Review Your Retirement Goals

Reassess your retirement vision. Do you plan to travel, start a business, or settle into a quieter lifestyle? Update your financial targets to reflect changes in your goals or circumstances. 

B. Evaluate Your Savings Progress

Check your retirement savings accounts. Are you on track to meet your retirement goals? Gauge how your current savings align with projected needs. Adjust contributions as needed.

C. Maximize Contributions

Take advantage of contribution limits for 2025. If you’re 50 or older, explore catch-up contributions. 

D. Update Your Investment Strategy

Review your investment portfolio to ensure it matches your risk tolerance and time horizon. As you get closer to retirement, consider reallocating assets to reduce risk & protect, while maintaining growth potential.

E. Plan for Healthcare Costs

Healthcare is one of the most significant retirement expenses most don’t plan for. Put a plan in place for retirement. 

F. Assess Your Income Strategy

If you’re nearing retirement (within 5-8 years), outline a strategy for generating income from your savings. Plan how to structure withdrawals from retirement accounts to maximize income longevity and tax efficiency.

These tasks will set the stage for a secure and fulfilling retirement.

4. Build or Replenish Your Emergency Fund

A healthy emergency fund should cover 3-6 months’ worth of expenses. 

5. Reassess Your Insurance Needs

Review your life, health, and property insurance policies to ensure you have adequate coverage.  Update your policies if you've experienced life changes, such as marriage, a new child, or a home purchase.

6. Plan for Taxes

Gather documents and strategize to minimize tax liability. Consider consulting a financial advisor or tax professional to identify opportunities for deductions and credits.

Here’s to closing 2024 with wisdom and welcoming 2025 with enthusiasm and strategic foresight!