Estate planning
What to do: Create or update a will or trust; consider a living will and financial power of attorney; toss old documents.Time involved: If you're starting from scratch, plan for at least an hour.
Cost: Do-it-yourself programs, such as WillMaker or WillCreator, can help you create a simple will for as little as $20. If you have a more complex situation, a will drawn up by an attorney starts at about $300.
Details: First things first, says Mary Randolph, author of "The Executor's Guide." If you don't yet have a will, it's time to buckle down and draw one up. "It drops to the bottom of people's to-do list for obvious reasons," she says. "But the good news is, it's not that hard to do." Step-by-step software and online programs can guide you through the process fairly easily and inexpensively.
If you've got any property at all -- a home, a car, a flat-screen TV, or jewelry with real or sentimental value -- a will can help make sure it gets to the right person upon your passing, and it can help prevent a lengthy probate process. (See "8 ways to leave a mess for your heirs.")
As you're working on a will, also consider drawing up a financial power of attorney document, which specifies a trustworthy person to control your finances if you become too sick to handle them on your own. A living will, also commonly included in these types of documents, is helpful to specify your wishes if you're unable to communicate them because of illness.
Once you've finished drawing up these documents, don't just shelve them indefinitely. An annual review remains important, because when your life changes, the parameters of your will may need to change, too.
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"If you had a major life event -- if you had a child, if you got married or divorced, or if a parent died and you inherited a lot of property -- you'll have different things to think about," says Randolph. "Most people need more than one will in their lifetime." Make sure you're still comfortable with the executor and beneficiaries of your estate.
If you've made any updates to these documents, get rid of the old ones, says Bob DiQuollo, the president of Brinton Eaton Wealth Advisors in Morristown, N.J. "People have a habit of keeping copies of estate planning documents, even when they have an updated one," he says. "There's no reason to keep a prior version, because it just adds confusion."
Retirement accounts and investments
What to do: Consolidate accounts, rebalance and update beneficiaries.Time involved: Plan to set aside a couple of hours to get started, and an additional hour or two in coming weeks to ensure that changes have been made.
Cost: As long as you simply roll over retirement accounts, you shouldn't incur major fees. Some companies charge a small fee to close accounts, usually less than $50.
Details: Diligent saving and good investment decisions are keys to helping you build wealth and retire comfortably, but it's easy to get bogged down with too many details and accounts.
Consolidating accounts can help reduce that stress. "It's tough enough to figure out what's going on with your money, but if you've got several statements a month coming in, you may just let them pile up and not even open them," says Gichon. "It's a huge obstacle for people when they try to move forward financially."
Gichon suggests moving old 401(k) accounts into the one at your current job -- check with your human resources department about the logistics -- or moving them into a self-directed IRA through a major mutual fund company, such as Vanguard, Fidelity or T. Rowe Price.
"If there's an office for one of these companies nearby, you can bring the information about all of your accounts and they can help you make the transfers," says Gichon. "You can get one statement with all your information with IRA, Roth IRA and 401(k). It's much easier."
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If you're happy with where your accounts are, an annual rebalancing is a good idea. Even if you planned your initial investments wisely from the start, big gains or losses over time can skew your portfolio, says Weston. After a few years, your ratio of investments may have shifted significantly, resulting in a portfolio far more aggressive or conservative than you intended.
If you can't stand the thought of going through your retirement investments annually, consider putting your money in a target date fund, offered by most major mutual fund companies. The fund will rebalance automatically, giving you one less thing to worry about.
Also look at beneficiaries: If you put your parents as beneficiaries of a 401(k) plan you got from your first job, you may want to change that if you've married or had a child. Similarly, if you've gotten divorced, you'll probably want to remove your ex as a beneficiary.
Finally, consider increasing your 401(k) savings: At the minimum, be sure to save enough to earn the full match from your company. If you increase your savings at the same time as your annual raise, you probably won't even miss the extra cash.
Continued: Check your insurance policies
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