The inevitability of change should be top of mind for everyone as 2025 begins. The Federal Reserve could start raising rates again, a new administration with a radical economic agenda is preparing to take power in Washington, D.C., and elevated inflation is still lurking in the background.
Despite the uncertainty that comes with changing times, one piece of personal finance advice remains eternal: Don’t let emotions take over your financial planning. Investors need to shift gears smoothly and comfortably adapt to change, says Rob Williams, managing director of financial planning, retirement income, and wealth management at Charles Schwab.
“The reality is that economies and markets are always uncertain,” Williams tells Fortune. “There is never a time where they are not and that is normal, that is human, and that is part of being a successful investor is to be aware of that and to navigate that emotion and to take a long view.”
According to Williams, preparing for a new tax environment, managing concerns about inflation, and bracing for higher risk management costs are three key considerations for the new year. The incoming administration will surely impact all three areas, but having a wealth management plan will help you navigate them smoothly and keep on track to retire comfortably.
“The best way to manage risk and achieve goals is to know your time horizon,” says Williams. “Have a financial plan, or for more affluent investors, a wealth management plan, that’s designed to continue to grow, but also preserve and use your wealth regardless of what occurs in 2025.”
Erin Cox, associate extension specialist for family and community economics at Virginia Cooperative Extension, says no matter your income or financial standing, having an active relationship with your money is paramount. That means setting goals and boundaries sooner rather than later.
“The sooner you can take an in-depth look at your finances and really understand where you’re at and where you want to go, the better,” Cox tells Fortune.