How to Turn Your 2025 Tax Return Into a Retirement Planning Checkup
Written by Reuben Gregg Brewer for The Motley Fool -> Benjamin Franklin famously said, "In this world nothing can be said to be certain, except death and taxes." Filing your taxes requires collecting a host of important financial documents. Don't let that effort go to waste; m
Benjamin Franklin famously said, "In this world nothing can be said to be certain, except death and taxes."
Filing your taxes requires collecting a host of important financial documents.
Don't let that effort go to waste; make sure your taxes turn into a retirement checkup.
You have to do your taxes, or Uncle Sam will come calling. Which is basically what Benjamin Franklin was getting at when he said, "In this world nothing can be said to be certain, except death and taxes." The U.S. tax code is complicated, and filing your taxes is a heavy chore. But you have to do it. Hopefully, the outcome is a refund or at least no additional tax payments.
With tax season in the rearview mirror, many people may be glad to move on. Don't be so quick. All of that work you did can serve another purpose. The information you generated is what you need to perform a retirement plan checkup. Do that now, while the information is still fresh.
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Hate taxes all you want, but if you can get more out of them than just a headache, you'll be much happier about the effort you had to put in. That effort usually begins with collecting information about your financial situation. Your salary information is the starting point, of course. However, you also need all your bank statements and the statements from your investment accounts, including retirement plans and individual retirement accounts (IRAs). You may also have other information in the mix, such as interest payments on outstanding loans.
The very first thing you can do with all of that is create a personal balance sheet. That is basically a list of your assets and liabilities. Your net worth is the difference between the two, which may be negative if you are just starting out in life and own a home. That's not a terrible thing, per se, since you are building equity in your home over time.
