Your Mid-Year Financial Review: What to Evaluate Before Q3
At Melby Wealth Management, we conduct formal mid-year reviews with every client. The logic is simple: financial plans made in January rarely survive June unchanged. Income adjustments, tax law developments, market movements, and life events all create drift between the plan on paper and the reality on the ground.
As a CERTIFIED FINANCIAL PLANNER® (CFP®) professional running a fee-only fiduciary firm in Nashville, I've found that the mid-year checkpoint is one of the highest-value touchpoints in the client relationship. Not because the portfolio needs constant tinkering, but because the six-month mark provides enough data to identify whether we're on pace and enough runway to course correct.
Retirement Contribution Pacing
For clients targeting the $24,500 401(k) limit in 2026 ($32,500 at 50+, or up to $35,750 at ages 60-63 under the SECURE 2.0 super catch-up), year-to-date contributions should be approximately $12,250 by July 1. For IRAs at the $7,500 limit, approximately $3,750.
In practice, I see contribution pacing drift most often when a client changes jobs mid-year, receives a raise that shifts their per-paycheck percentage, or has a bonus that temporarily inflates contributions ahead of schedule. The mid-year check catches all of these and prevents the situation where a client either misses the cap or front-loads and triggers a correction.
For clients with equity compensation, the pacing conversation is more complex. RSU vests, ESPP purchases, and option exercises all interact with the 401(k) contribution calculation, particularly if the plan has after-tax contribution and in-plan Roth conversion features (the "mega backdoor Roth").
Tax Withholding and Estimated Payments
The One, Big, Beautiful Bill Act made permanent changes to the rate structure in 2025. For clients who haven't run the IRS Tax Withholding Estimator since that legislation, the mid-year review is when we verify that withholding is calibrated correctly for the current year.
This matters most for clients with multiple income sources: W-2 plus investment income, rental income, business distributions, or equity compensation that creates lumpy taxable events throughout the year. Under-withholding leads to estimated tax penalties. Over-withholding is an interest-free loan to the government.
For my self-employed and business-owner clients, mid-year is when we true up estimated payment calculations against actual year-to-date income. The first two quarters of estimated payments are behind us, and adjusting Q3 and Q4 is still straightforward.
Beneficiary Designations
This is the item I flag at every mid-year review because it's the one with the most severe consequences when neglected. Beneficiary designations on retirement accounts and life insurance override the will. An outdated beneficiary from a prior marriage, a missing contingent beneficiary, or incorrect percentages across split designations can all create outcomes that directly contradict the client's estate plan.
I ask every client to confirm their beneficiaries at mid-year. For clients who've had a life event since the last review (marriage, divorce, new child, death of a named beneficiary), we update immediately.
Portfolio Positioning and Rebalancing
A strong first half in equities can push a target allocation meaningfully off course. For a client targeting 80/20 stocks-to-bonds, a run-up might push them to 87/13 without any action on their part.
I generally recommend rebalancing when any asset class drifts more than 5 percentage points from target. We prioritize rebalancing inside tax-advantaged accounts to avoid triggering capital gains, and coordinate any taxable rebalancing with the client's overall tax picture for the year.
The fourth quarter historically brings elevated volatility around elections, year-end tax positioning, and institutional rebalancing. Getting the allocation right in June means the portfolio is positioned to weather whatever the fall brings without requiring reactive adjustments under pressure.
Emergency Fund Adequacy
For clients whose reserves were sized two or three years ago, inflation has changed what "adequate" means. Housing costs, insurance premiums, and everyday expenses have all increased. I ask clients to recalculate their monthly essential costs and compare against the current reserve. A gap that accumulated quietly over 24 months can represent $3,000 to $6,000 in under-funding.
The Full Review
A comprehensive mid-year review covers all of these areas plus insurance coverage adequacy, estate document currency, and progress against the financial plan's milestones. If you'd like to walk through your financial picture with a second set of eyes, I'm happy to schedule a review.
For the consumer-facing checklist version of this review, head over to Melby Money.
Schedule your mid-year review →
About The Author
Shaun Melby, CFP® provides fee-only financial planning and investment management services in Nashville, TN through his company Melby Wealth Management. Shaun has over 15 years of experience as a financial advisor in Nashville. Shaun created Melby Money to educate the public about finances.
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