8 Important Financial Documents You Should Update Every January

A lot can happen in a year, and 2024 was no exception. As a new year dawns, it’s a good time to look at everything that changed over the last 12 months and make sure your financial documents still reflect your life circumstances.

Here are some of the most important documents to update at the start of 2025. Doing so can help you shore up your finances and keep more cash in your wallet.

About two-thirds of Americans haven’t yet made a will, according to Caring.com. If you are among them, now is the perfect time to draw up a last will and testament.

Even if you already have a will, it’s important to update the document. If your financial or personal situation has changed at all in the past year — for instance, if you’ve gotten married or divorced, or adopted a child — your will should reflect that fact.

You should have a designated beneficiary or beneficiaries for most of your financial accounts, from your retirement fund to your life insurance policy.

In the event of your death, the beneficiary will inherit the assets attached to the account.

If you’re not sure who automatically benefits from each of your financial accounts, find out. For instance, federal law requires you to name the surviving spouse as a beneficiary on most employer-sponsored IRAs unless they sign a waiver opting out of the designation.

And if you’ve assigned a beneficiary to any account, make sure you’re still comfortable with your decision. If you’ve gotten divorced in the last year, you might need to update beneficiary forms to make sure your money goes to the right person in the event of your death.

Set up a payable-on-death (POD) bank account If you want the money in your savings and checking accounts to automatically transfer to a beneficiary upon your death.

At most banks, it’s free to set up a beneficiary. If you don’t have a beneficiary or want to change your current beneficiary on an account, get in touch with a banker to make the necessary changes.

Like a payable-on-death arrangement, a transfer-on-death (TOD) deed lets you designate a beneficiary who automatically inherits real estate upon your death.

TOD deeds aren’t available in all states, and transferring ownership of property also means you’re transferring the mortgage — and responsibility for its payments — to the new owner. But some people choose a TOD deed to avoid the possibility of assets ending up in probate.

Many financial experts recommend rebalancing your portfolio each year to ensure your asset allocation remains as you desire. This can involve selling investments that have done well and buying more shares of investments that had less robust returns during the year.

For example, 2024 was a great year for the stock market. If you prefer a 50/50 split between stocks and bonds, the market’s strong performance might have thrown off your allocation, leaving you top-heavy in stocks. Rebalancing can set things right for you.

If you’re not comfortable adjusting your investment account on your own or are unsure about the wisdom of doing so, consider scheduling an appointment with a financial advisor or retirement planner at the start of the year.

Are mortgage rates better now than they were when you first bought your house? If so, you might want to look into refinancing your mortgage and getting better terms.

This is not the right option for everyone, especially those who secured a great mortgage rate years ago. But those who took out a home loan when rates were higher might benefit from a refinance.

If you paid too much in taxes throughout 2024 — or paid too little — you might need to adjust the amount of taxes your employer is currently withholding from your paychecks.

Use the online IRS tax withholding calculator to figure out how much to have your employer withhold. Then, submit a new W-4 form to your employer with the updated withholding amount.

Revisit your insurance policies to make sure the coverage still reflects your needs. For instance, if you’ve made home renovations that have increased your property’s value, adjust the policy so you don’t have any coverage gaps.

Additionally, scope out the insurance market to ensure you aren’t missing any deals.

Maybe the policy you signed up for when you bought your house was the best deal at the time. However, if another company is now offering a better deal, switching now could help you save money.

The new year is the perfect time to reevaluate your life goals and commit to making changes that will impact your future — including financial changes.

Revisiting the documents listed above is the perfect first step toward assessing your current financial state. Once you do so, making the right adjustments will help you eliminate money stress as you move into 2025.