INVESTIGATE A REVERSE MORTGAGE. Once retired, borrowing against your home’s value shouldn’t be a first choice, but a last resort. Still, it’s helpful—and comforting—to know what that last resort might be worth. To that end, try the calculator at ReverseMortgage.org. Pay attention not only to the money you’ll receive, but also to the hefty fees you will incur.
LOOK FOR INSURANCE GAPS. Many folks agonize over whether their policies are too large or small. A bigger danger: Not having coverage at all, because your life has changed but your insurance hasn’t kept up. Just had kids? It’s time for life insurance. Grown wealthy? Consider umbrella liability insurance. Started working for yourself? You may need disability coverage.
FIND A WELL-RUN CHARITY. There’s a host of sites that can help you identify top-notch charities, including CharityNavigator.org, CharityWatch.org, GiveWell.org, GuideStar.org and MyPhilanthropedia.org. The most efficient charities spend less than 10% of their donations on administration and fundraising, so more ends up with the folks they aim to help.
BE THANKFUL. Great vacations and wonderful family events fade from memory. Similarly, we quickly adapt to material improvements in our lives, such as the new car and the remodeled kitchen. To counteract this process of adaptation, pause for a moment, and ponder the major purchases you’ve made over the past year and the great experiences you’ve had.
HAVE A FAMILY TALK ABOUT COLLEGE. How much financial help can you give your children? If they’ll need to shoulder part of the cost, tell them long before they start eyeing colleges. What career do your teenagers plan to pursue? If they’ll likely end up with a modest income, you should counsel against colleges that will require hefty student loans.
REASSESS YOUR EMERGENCY FUND. Experts often recommend keeping three-to-six months of living expenses as an emergency fund. Just left a secure job to strike out on your own? You should probably hold more cash. Just retired? Now that losing your job is no longer a risk, you might shrink your emergency fund—and perhaps shutter it entirely.
HOW MUCH HOUSE CAN YOU AFFORD? Ponder the question from two angles. First, there’s how much you could potentially borrow. You can find out at HSH.com. Second, there’s how much it makes sense to borrow. If you took on the maximum mortgage possible, would you have enough left over each month to save for retirement and the kids’ college?
FREEZE YOUR CREDIT. This will prevent data thieves from taking out loans and credit cards using your identity. But it also means you’ll need to contact the three credit bureaus and unfreeze your credit temporarily whenever applying for credit. Sound like a hassle? As an alternative, consider setting up an initial fraud alert and then renewing it every 90 days.
CHECK YOUR RETIREMENT READINESS. Try the simple calculators from AARP, Boston College and Vanguard Group. None requires you to create an account. Each will give you a somewhat different assessment—a reminder that such projections are a rough-and-ready business. Still, you should get a sense for whether your retirement is on track or off the rails.
GET A FREE CREDIT SCORE. You can learn your score at sites such as Credit.com, CreditCards.com, CreditKarma.com, CreditSesame.com, NerdWallet.com, Quizzle.com and WalletHub.com. Scores are also available from Capital One, Chase and Discover, even if you aren’t a customer. Not all these sites will tell you your FICO score—the most widely used scoring system.
CONSIDER A ROTH CONVERSION. You should have a good idea of your taxable income for the current year. Is it less than normal, so you’ll end up in a lower tax bracket? To take advantage, consider converting part of your traditional IRA to a Roth, where the money will grow tax-free thereafter. One warning: Make sure you have the necessary cash to pay the resulting tax bill.
PREPARE FOR A LONG LIFE. For a quick gauge of your life expectancy, try Social Security’s calculator. For an in-depth look, use this calculator built on academic research. What will you learn? First, the longer you live, the longer you can expect to live. Second, lifespans vary widely—with educated, health-conscious Americans living three or four years longer than average.
FILE FOR COLLEGE FINANCIAL AID. Hoping for grants and loans for the 2018–19 academic year? You can file the Free Application for Federal Student Aid starting Oct. 1. Income is based on your 2016 tax return. Even so, before filling out the FAFSA, you could increase aid eligibility by using taxable account money to pay down debt or fund retirement accounts.
CHECK YOUR FUND EXPENSES. If you own index funds, aim for weighted average annual expenses below 0.2%. If you own actively managed funds, you’ll pay more—but allocate enough of your portfolio to index funds to keep your average below 0.4%. By holding down costs, you’ll keep more of what you make, plus low-cost funds typically outperform high-cost competitors.
TALK TO YOUR CHILDREN ABOUT MONEY. Forget lectures—and instead teach your kids by telling family stories, setting a good example and sharing your financial life. Show them your account statements. Detail where your paycheck goes. Talk about your goals. Tell them about your financial struggles when you first entered the workforce.