As we welcome a new year filled with hope for better health, it’s worth asking: What does being healthy truly mean? In the age of artificial intelligence, I posed the question to my chatbot of choice, Gemini, which replied: “Health is a state of complete physical, mental, and social well-being, not merely the absence of disease or infirmity.” A thoughtful definition—yet noticeably missing one essential pillar: financial well-being. It deserves a seat at the table.
The blueprint for financial health varies significantly depending on whether you are accumulating wealth or drawing from it. Here are the three main considerations—and a simple checklist—for each group:
1. The Retired Investor: Sustaining Your Financial Longevity.
A normal and natural change typically occurs for retirees as the focus shifts from wealth accumulation to preservation, income generation, and legacy. The main consideration may evolve to ensuring your portfolio can weather market storms while providing reliable, tax-efficient income for decades. Now is a good time to review the following:
- Optimize Income – Strategize your cash flow from all your income sources (social security, pensions, rental income, and portfolio dividends/interest) to effectively achieve high, tax-efficient income. Cash flow and tax analysis tools can be used to optimize portfolios.
- Reassess Estate Plan – Ensure your will, trusts, and beneficiaries are up to date and align with your current wishes, particularly after any major life event. Understand the tax implications of your specific estate plan, especially concerning recent legislation changes.
- Reduce Risk – Be diversified. Overconcentration in one or two investments can be a great way to accumulate wealth. However, I believe the key to wealth preservation is diversification.
2. The Working Professional: Maximizing Growth and Protection.
For those still working, generating earned income, the game plan is about efficient accumulation, smart risk management, and tax optimization. Here are three considerations:
- Maximize Tax-Advantage Savings – Max out! Ensure you are contributing the maximum allowable to your 401(k), IRA, or other tax-deferred/exempt vehicles. Self-employed? Fund your SEP (or Individual 401(k)) with all allowed.
- Manage Debt – Review all forms of debt, particularly mortgages or business loans. Evaluate whether using current low interest rates or strategic leverage would better deploy cash toward higher-return investments.
- Evaluate Insurance – Revisit your life and disability insurance coverage to ensure they align with your increased net worth and family needs. Ensure all business interests are protected with key-person insurance and appropriate buy-sell agreements.
Think of your wealth as a sophisticated ecosystem; it needs regular checkups, preventative care, and specialized attention to thrive. This January, let’s resolve to secure the financial vitality that underpins your affluent life and make 2026 a completely healthy new year.
John Gardner is the founder and principal of Blackhawk Wealth Advisors, an independent investment advisory firm based in Danville.