Tax time should be a checkpoint to assess your long-term financial plans

No matter what stage of life you’re in, tax time can be more than an opportunity to maximize a refund; it’s also a good time to stop and look at your long-term financial planning. For many, the big goal is retirement, but without some intentional effort, retirement—or intermediary steps like buying a house or starting a business—can become especially difficult. After the dust settles from filing your returns, resolve to take the extra step of evaluating where you are vs. where you want to be in the years to come.

You have done some financial planning, right?

In her Smarter Investor column for U.S. News & World Report, Kate Stalter notes that two of the major hurdles to a decent retirement are the fact that an astonishing number of people have neither a) an investment philosophy (some kind of rationale for what you’re investing in and why) b) any sort of structured retirement plan at all. Make tax time your reminder to start structuring your vision and you’ll be miles ahead of a huge segment of the U.S. population.

The synergy between tax preparation and financial planning

There’s some logical overlap between tax preparation and financial planning; evaluating earning and tax statements from investment accounts when figuring out how much (if any) tax you owe on your earnings is a great time to hit “pause” and look at how this year’s dividends are tracking against your goals. A tax preparer, of course, can help you find those extra investment-related deductions and give you ideas for reducing your tax burden in the context of your investments.

Better money management: Another “splash” benefit of tax-time financial checkups

We all succumb to a bit of monthly or yearly drift when it comes to long-term goals.One of the most common disconnects? What we say we want in the long-term vs. how the heck we actually spend our money every day.Your tax-time financial checkup should include your daily expenses: Are you really using that $19.99/mo.membership? What happens if we can cut in half the number of meals we eat out every month? Make tax time an occasion for re-illuminating the connection between your long-term goals and your daily spending behaviors. Most likely you’ve got “found money” opportunities that manifest with a little reminder about what you want your life to look like in the decades to come.

Make sure you’re not leaving money on the table

If you were drowsy and half-paying attention the last time somebody from HR explained how your 401K works, make this coming tax time the day you review your benefits package to check things like your 401K contributions. Employer matching plans, etc., are part of your compensation you may be overlooking—and something which can help both tax burden and your retirement (or similar) goals far down the road!