As we approach the end of the year, one question we hear often is:
“How am I doing?”
It’s a simple question but it’s loaded with uncertainty. Am I saving enough? Is my portfolio where it needs to be? What do I need to adjust heading into next year?
These are great questions—and ones that everyone should consider. What is the best way to answer them? Instead of comparing your progress to market indexes or outside benchmarks, check them against your own goals.
Let’s discuss why that matters and how to frame this question so you walk away feeling confident and in control.
Compared to What?
When you ask, “How am I doing?” the key follow-up is, “Compared to what?”
Your success shouldn’t be measured against market indexes like the S&P 500 or Dow Jones Industrial Average. Those indexes don’t care about your retirement dreams, your family, or the lifestyle you’re building. What really matters is how you’re doing compared to your own goals.
For example, let’s say you started this year with a plan to:
- Max out your IRA contributions.
- Contribute as much as possible to your 401(k) or TSP.
If you’ve made progress on those goals, that’s a win. It’s a win because you set those priorities according to what you want to see accomplished.
And here’s the other key piece: You can control your actions, but you can’t control the market.
Markets will either go up, down, or sideways. But staying disciplined and consistent—something that you can control—that’s where real wealth creation happens.
Your portfolio should be structured to serve your needs. It should include investments that smooth the ride—what we call an “all-weather” strategy. The goal is to position you for success over the next 10, 20, or 30 years, accounting for all types of market conditions.
When Life Happens
Sometimes, despite our best intentions, life happens. Maybe this year didn’t go perfectly. Here are a few scenarios some of our clients saw this year.
- Unexpected roof replacement or other unforeseen big expense.
- Lower self-employment income than expected.
- Financial assistance or care for an aging parent.
In these cases, the client may have missed their 12-month savings goal–and that’s okay. Financial planning is a long-term process, not a single-year effort.
It is, however, a powerful reminder of the role of compounding. They might not have had the cashflow to put their target amount in their investment accounts, but they’ve been at this for a long time. The growth they gained over the last 12 months will hopefully make up most of the savings difference.
All that to say, saving early and consistently is the most important factor. As your portfolio grows, missing one year of contributions after decades of consistency often matters less than you think.
Wrapping Up
As this year wraps up, take a moment to check in on your goals. Celebrate the wins, adjust where needed, and give yourself some grace if life doesn’t go perfectly to plan.
Remember: Financial planning is a journey. It’s not about hitting every target perfectly; it’s about staying on course over the long run.
If you’re unsure where you stand—or if you want to set yourself up for success in the coming year—our team is here to help.