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Your guide to reviewing and protecting your assets and future

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Your guide to reviewing and protecting your assets and future

The end of the year is often a time of reflection, when you look over your shoulder at what you’ve accomplished while setting new goals for the year ahead. With inflation continuing to affect everyday expenses and Federal Reserve rate cuts affecting what you earn on your savings, it’s also an ideal time review your finances to make sure you’re getting the most you can out of your money.

Your year-end review should start with your bank accounts, confirming you’re earning the most competitive rates while avoiding unnecessary fees that can chip away at what you earn. From there, look at your investment accounts to confirm they still match your financial goals and risk tolerance as you plan for retirement. You should also review your estate-planning documents, insurance coverage and tax situation to protect both your assets and loved ones.

We walk through seven steps of your financial checkup to help you enter 2025 on solid financial footing.

In this article

  1. Review your bank accounts

  2. Evaluate your investments and take your RMDs

  3. Shop for better car insurance rates

  4. Check your health coverage and use remaining FSA funds

  5. Assess your housing situation and maintenance needs

  6. Examine your spending habits

  7. Review your estate planning and legal documents

You may saved your money with the same bank or credit union for years, but your continued loyalty ultimately may not work in your favor. Take time to examine your bank’s fees, annual percentage yields (APYs) and account features to ensure your money is in the right place.

Bank fees have steadily increased over the past years, with many traditional banks now charging $6 to $15 in monthly maintenance fees unless you keep minimum balances or receive direct deposits.

If you’ve held the same checking account for years, you could save hundreds annually by switching to a more modern account. Moving from a traditional bank charging $12 monthly to an online bank with no fees saves $144 a year alone.

And many online-only banks and digital accounts come with unique features while having no monthly fees and no minimum balance requirements. For example, the Upgrade Rewards Checking Plus account charges no monthly maintenance fee and offers 2% cash back on common everyday expenses at convenience stores, restaurants and bars, gas stations and more. The Charles Schwab Investor Checking account also has a $0 monthly maintenance fee and comes with unlimited ATM fee rebates worldwide and $0 foreign transaction fees.

If your current checking account is charging you higher fees or can’t keep up with the perks, it’s probably the right time to switch.

Dig deeper: 13 common bank fees you shouldn’t be paying — and how to avoid them

As savings rates come down along with recent Federal Reserve rate cuts, ensuring your money earns competitive yields is crucial to meeting your financial goals faster. While traditional banks like Chase and Wells Fargo pay as little as 0.01% APY on savings, online banks are still offering high-yield savings accounts (HYSAs) with considerably higher yields.

Here’s how much you can earn with an HYSA earning 4.00% APY versus a traditional account:

$10,000 at 4.00% APY

$10,000 at 0.01% APY

After 1 year

$400

$1

After 3 years

$1,249

$3

After 5 years

$2,167

$5

If you keep a substantial balance in a traditional savings account earning minimal interest, store just enough in your primary checking account to handle everyday bills and consider moving the rest to high-yield savings.

For money you won’t need for several months, certificates of deposit (CDs) offer a way to lock in today’s highest rates before they fall. Many online banks and local credit unions offer high-yield CDs with low or no minimum opening deposits. Or build a CD ladder by spreading money across different maturity dates, giving you periodic access to your money while locking in today’s higher rates.

Dig deeper: As prices rise and rates fall, my high-yield savings still beats inflation and traditional banks — here’s how

The end of the year is an ideal time to review your investment strategy to make sure your portfolio is still on the right track to meet your goals. You should also ensure you’re meeting the IRS requirements for retirement account withdrawals.

The investment landscape shifted dramatically in 2023 and 2024, with interest rates reaching levels not seen in decades. Higher interest rates typically dampen the stock market, but economists expect recent Fed rate cuts to put downward pressure on interest rates, boosting stock market growth.

That’s why you should examine your portfolio’s performance and check whether its asset allocation still aligns with your goals and risk tolerance. For example, if you started 2024 with a portfolio split 60% in stocks and 40% in bonds, market movements might have altered that balance. In this case, your portfolio may need rebalancing by selling some assets that have grown beyond their intended percentage and buying others that have fallen below target.

Many investment platforms automate this process for you. For example, robo-advisors offer a straightforward hands-off investing experience that automatically invests, manages and rebalances your portfolio. Robo-advisors also make it easy to implement tried-and-true investment strategies like dollar-cost averaging.

Dig deeper: Is saving or investing better for growing and protecting your wealth?

Along with reviewing your taxable investment portfolio, you should also examine your tax-advantaged 401(k)s and IRAs. If you’re still working and your employer offers a 401(k) match, make sure to make any final contributions needed to receive the full match for the year. For example, if your employer matches 50% of contributions up to 6% of your salary, make sure you’ve contributed at least 6% to get the full benefit.

If you have extra funds, consider maxing out your 401(k) and IRA contributions to speed up your progress toward your retirement planning goals. In 2024, you can contribute up to $23,000 to your 401(k) with additional $7,500 in catch-up contributions if you’re age 50 or older. The 2024 limit for IRAs is $7,000 for those under age 50 and $8,000 for those age 50 or older. The good news is that you can add to your 2024 IRA contributions until April 15, 2025, but your 401(k) contribution deadline is December 31, 2024.

Consider consolidating old 401(k)s from previous employers into an IRA for easier management and potentially lower fees. Many IRAs offer more investment choices and lower expenses than workplace plans. For instance, while your old 401(k) might charge 0.50% or more in annual management fees, many IRA providers charge no annual management fees and use low-cost index funds with expenses under 0.10%.

If you’re 73 or older, make sure you’ve taken required minimum distributions (RMDs) from traditional 401(k) and traditional IRA by December 31. The IRS requires these withdrawals with penalties reaching up to 25% of any missed amount. If you haven’t already, you can ask your financial institution to calculate and distribute your RMD automatically each year. If you don’t need the money for expenses, consider reinvesting it in a taxable account or converting some retirement savings to a Roth IRA, which doesn’t require RMDs during your lifetime.

Dig deeper: How to stretch your retirement savings using the 4% withdrawal rule

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Car insurance premiums have been steadily increasing in recent years, making it crucial to frequently shop for better rates to maximize your savings while maintaining the coverage you need.

Your insurance needs likely shifted over the years, including how much you drive or where you park your car. For example, if you’ve started to work more from home or moved to a new neighborhood, these changes could qualify you for better rates or prompt a change in coverage levels.

That’s why you should review your current policy’s coverage against your actual needs. For example, if you drive less than 7,500 miles annually you might qualify for a lower premium or a low-mileage discount.

Consider adjusting your deductibles and coverage based on your vehicle’s current value and your financial situation. For instance, if you drive an older car worth less than $4,000, you might choose to drop comprehensive and collision coverage and save $300 to $600 annually. Just make sure you maintain enough savings to repair or replace your vehicle if needed.

You can also consider usage-based insurance programs that track your driving habits through an app or device. These programs often reduce premiums by 10% to 40% for safe, low-mileage drivers. Although they come with privacy concerns and risk of sharing data with your insurance provider.

Dig deeper: When’s the best time to shop for car insurance? (It could be right now)

Life changes can open up new insurance discounts you might not have qualified for previously. For example, buying a home could make you eligible for multi-policy discounts, while completing a defensive driving course might unlock safe driver savings.

Major insurers like GEICO and Progressive now offer specific programs for mature drivers. These discount programs help lower your premium and, depending on your provider, may offer additional perks like additional discounts for retirees and accident forgiveness to prevent your rates from going up after your first-at fault accident.

Consider gathering quotes from at least three different insurers to compare rates and coverage options. Each company calculates risk differently, so prices can vary significantly for the same coverage. For example, one company might charge $1,200 annually for full coverage while another offers identical protection for $900. But don’t base your decision on coverage cost alone. Instead, pay attention to each company’s reputation for customer service and claims handling.

Dig deeper: 9 ways to save on car insurance for seniors and retirees

The standard open enrollment periods for health insurance programs typically take place toward the end of the year. By December 31, your flexible spending account (FSA) funds typically expire. That’s why your healthcare coverage requires your attention during this time of the year.

Several healthcare open enrollment periods overlap between October and December. For example, Medicare’s annual enrollment runs from October 15 to December 7, while the Health Insurance Marketplace accepts enrollments from November 1 to January 15. If you have employer coverage, your open enrollment likely falls between October and December.

Whether you plan to enroll or you already enrolled, reviewing your coverage helps you understand the protections you receive today and prepare for future changes. Consider keeping notes about what works well and what doesn’t with your current plan. For example, if you find yourself paying high out-of-pocket costs for specialist visits or specific medications, document these expenses.

This information becomes valuable when you can make changes during your next enrollment period or if you qualify for a special enrollment period due to a major life event. A special enrollment period typically gives you 60 days to adjust your coverage following events like losing other health coverage and moving to a new area with different plan options. Other qualifying events include getting married or divorced, having a baby or experiencing significant income changes that affect your eligibility for subsidies or Medicaid.

Dig deeper: 8 health insurance options for early retirees

Check your flexible spending account (FSA) balance as the year ends, since most plans require you to use these tax-advantaged funds by December 31. Some plans offer a grace period into the new year or allow rolling over a portion to next year, but many follow a strict “use it or lose it” policy.

FSA funds cover a broader range of health-related expenses than many people realize. Beyond doctor visits and prescriptions, qualified expenses typically include dental cleanings, eye exams, eyeglasses, contact lenses and supplies, hearing aids and batteries, first aid kits, bandages, diabetic supplies, blood pressure monitors and many over-the-counter medications. The IRS provides a complete list of eligible expenses, and your plan administrator can confirm which items qualify under your specific FSA.

Numerous retailers make it convenient to spend remaining FSA dollars. The FSA Store specializes in qualified items and often offers year-end bundles of commonly used supplies. Major retailers like Amazon, Walgreens, CVS and Target have their own online FSA stores and clearly mark FSA-eligible items. You can also get eligible items at your local pharmacy. Just remember to keep receipts for any FSA purchases since you might need them for reimbursement claims or tax purposes.

Dig deeper: 6 simple ways to save money on your prescriptions

Your home is a significant investment and a major part of your future, that’s why it’s essential to evaluate your housing needs and maintenance requirements at least once a year.

As you move through different life stages, your housing needs naturally evolve. The spacious home that perfectly suited your family years ago might now present maintenance challenges or feel unnecessarily large. Or the bustling city that was great for work might now feel fast-paced or stressful.

There isn’t much you need to do if you’re finding that your current housing situation works well for you. But if you’re unsatisfied with it, you might consider downsizing to a smaller property or moving to a different community that better matches your lifestyle. For example, moving from a 2,500-square-foot house to a 1,500-square-foot townhome could help you reduce your property taxes, utilities and maintenance costs.

However, remember that downsizing involves more than just financial considerations – you’ll want to weigh factors like proximity to family, access to healthcare, and community amenities.

Expert take: Here’s what to consider when downsizing for retirement

Your home insurance needs periodic reviews to ensure it still provides adequate protection. Start by confirming your coverage amount matches your home’s current replacement cost, not just its market value, as construction costs have risen significantly in recent years.

Some insurance companies offer mature homeowner discounts that you might qualify for after completing home safety improvements or installing security systems. For instance, adding smoke detectors, water leak sensors, or a monitored security system could help reduce your premium. You can typically qualify for additional discounts by bundling your home and auto insurance with the same company, often saving 10% to 25% on both policies.

If you recently moved to a flood-prone area like Florida, consider adding flood insurance even if your mortgage lender doesn’t require it. Standard home insurance policies typically don’t cover flood damage, and just one inch of floodwater can cause $25,000 or more in damage. Similarly, if you live in an earthquake-prone region, separate earthquake coverage might provide essential protection for your largest asset.

As stubborn inflation continues impacting living costs and prices of everyday essentials, finding ways to stretch your money becomes ever more crucial.

Today’s best budgeting apps streamline and simplify tracking and understand your spending patterns. Apps like YNAB (You Need A Budget) and Monarch Money automatically categorize your transactions, making it simple to spot areas where expenses might have crept up without you noticing. For example, you might discover you have subscriptions you forgot about or rarely use, or that your dining spending is more than you imagined it would be.

Cashback apps add another layer of potential savings. Apps like Rakuten and Capital One Shopping offer cash back at thousands of stores, including online vendors, grocery chains and travel agencies. Rewards from these cashback apps accumulate meaningfully over time and can amount to several hundred dollars a year, depending on your shopping patterns.

Dig deeper: 5 popular budgeting strategies — and how to find the best fit for financial motivation

Credit cards, when used responsibly, provide valuable benefits beyond convenience. Travel rewards cards like the Chase Sapphire Preferred or Capital One Venture X transform regular spending into free flights and hotel stays. For example, spending $4,000 in three months on some cards can qualify you for a welcome offer that covers multiple domestic flights or several nights in a hotel.

Many travel credit cards also include valuable benefits like extended warranty protection, purchase protection against damage or theft, and rental car insurance coverage. These perks can save you money on rental insurance or help replace items that get damaged soon after purchase.

If travel isn’t your priority, cashback cards offer straightforward rewards on everyday purchases. Cards like the Citi Double Cash give you cash back on everything you buy, while others like the Chase Freedom Unlimited offer higher rewards in specific categories like dining and takeout.

Dig deeper: 5 places your credit card offers better benefits than your debit card

Having clear, up-to-date estate planning documents gives you peace of mind and protects both your assets and loved ones.

If you haven’t created a will yet, now’s the time to put one in place. A will ensures your assets go to the people you choose, rather than letting state laws determine who inherits what. If you already have a will, review it to ensure it still reflects your current wishes. Major life changes like marriage, divorce, births, deaths or significant changes in assets often require updates.

Keep in mind that an outdated will can sometimes prove worse than no will at all. If your will names an ex-spouse or deceased relative as a beneficiary, or refers to property you no longer own, it could lead to confusion and potential legal challenges.

You can also set up a living trust alongside your will. While a will goes through probate – a potentially lengthy and expensive court process – a living trust allows assets to pass directly to your beneficiaries.

Beyond your will, examine the beneficiary designations on your financial accounts, including bank accounts, investment accounts and insurance policies. These designations actually override what’s written in your will. For example, if you’ve remarried but forgot to update your life insurance beneficiary, your ex-spouse might receive the payout instead of your current spouse.

Dig deeper: What happens to your bank account after you die?

Beyond your will, several other legal documents give you comprehensive protection. A durable power of attorney (DPA) lets someone handle your financial affairs if you become incapacitated, while a healthcare power of attorney defines who can make medical decisions on your behalf. Without these documents, your family members might need court approval to manage your affairs, which can take time and money during already stressful times.

You should also consider creating an advance directive (also called a living will) that outlines your wishes for end-of-life medical care. This document guides your healthcare providers and family about treatments you would or wouldn’t want, ensuring your preferences are honored. For example, you can specify whether you want life-sustaining treatments in certain situations or prefer comfort care instead.

Place these documents along with all your accounts and passwords in a detailed “emergency” folder. This folder should include information about your bank accounts, investment accounts, insurance policies and even social media logins. This ensures that your family won’t miss important assets. For example, your spouse might not know about a retirement account from a previous employer, or your children might have trouble closing your social media accounts without login credentials. This folder prevents these situations from happening.

Dig deeper: A financial checklist after losing a spouse or partner

Learn more about reviewing your finances and measuring your progress.

Start by gathering all your financial statements, including bank accounts, credit cards, investments, retirement accounts and insurance policies. Create a simple spreadsheet listing your assets (what you own) and liabilities (what you owe). Then examine each area – look for unnecessary fees in bank accounts, review investment performance, check insurance coverage levels and identify areas where you could save money or earn better returns. Consider meeting with a financial advisor who can provide an objective review of your situation and suggest improvements.

Financial health involves various key indicators. Check whether you have three to six months of expenses saved for emergencies, if you’re keeping credit card debt low or nonexistent and whether you’re regularly saving for future goals. Also consider whether you’re taking advantage of tax-advantaged accounts like 401(k)s and IRAs. While everyone’s situation differs, having adequate emergency savings while steadily building long-term wealth typically indicate you’re on a healthy financial path.

A will is just one part of a complete estate plan. Your will is a list of instructions for distributing your assets after death, while an estate plan includes additional documents that protect you during life and death. An estate plan typically includes your will plus other important documents like powers of attorney for healthcare and finances, living wills that specify your medical care preferences and possibly trusts that can help transfer your assets more efficiently. Estate plans consider tax implications and other complex factors that a basic will might not address.

Yahia Barakah is a personal finance writer at AOL with over a decade of experience in finance and investing. As a certified educator in personal finance (CEPF), he combines his economics expertise with a passion for financial literacy to simplify complex retirement, banking and credit topics. He loves empowering people to make informed financial decisions that improve their everyday and long-term wellness. Yahia’s expertise has been featured on FinanceBuzz, FX Empire and EarnForex. Based in Florida, he balances his love for finance with freediving, hiking and underwater photography.

Article edited by Kelly Suzan Waggoner

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