The FIRE portfolio review checklist: an annual physical for your money

By Tom, CPA · Updated October 25, 2026

TL;DR: Once a year, check five things: (1) whether your allocation has drifted beyond your bands, (2) your all-in cost including advisory fees, (3) whether each asset sits in the most tax-efficient account, (4) your tax lots, for loss or gain harvesting and specific identification, and (5) beneficiary designations on every account. It takes an afternoon and catches the expensive mistakes that accumulate quietly.

Educational only, not tax, legal, or investment advice. Examples are illustrations, not predictions. Rules and limits change; verify current figures and talk to a qualified professional about your situation.

Most portfolios don't fail dramatically. They decay: a 401(k) left at an old employer in a pricey fund, an allocation that drifted to 85% stocks during a bull market, a beneficiary form naming someone you haven't spoken to since 2009. None of these feel urgent on any particular Tuesday. Together they can cost years.

Lavish Larry reviews his portfolio whenever it's on the news, which means daily in a crash and never otherwise. Frugal Fran puts one afternoon a year on her calendar, usually in January, and works through this list with a cup of coffee and the rebalancing calculator. It assumes a portfolio like the one in index fund investing for FIRE, plus any rentals from real estate for FIRE.

CPA Warning Label: A checklist doesn't replace advice for your situation. Selling in taxable accounts can trigger taxes. Beneficiary and estate rules depend on account type and state law, so confirm details with the account custodian.

Allocation check

Step 1: gather everything in one place. List every account: 401(k)s, IRAs, Roth IRAs, HSAs, taxable brokerage accounts, cash, I bonds, T-bills, and the equity in any rentals. Many people discover a forgotten account at this step.

Step 2: compare actual vs target.

Illustration only. Your targets are your own.

Step 3: is the target still right? Life changes. If you're within five years of retiring, consider whether a bond tent makes sense. If you've already retired, check your withdrawal rate against the withdrawal rate calculator. If your rate has crept up after a bad market, this is the time to consider guardrails.

Step 4: rebalance the cheap way. Use new contributions and dividends first. Then rebalance inside tax-advantaged accounts, where trades don't trigger tax. Sell in taxable accounts last. See rebalancing strategies.

Fees

• List the expense ratio of every fund. Calculate a weighted average.
• Add advisory fees, 401(k) administrative fees and any account fees, to get an all-in percentage.
• Convert that to dollars per year. Seeing "$9,400" is more motivating than "0.94%".
• Look for cheaper share classes or equivalent index funds. Switching inside IRAs and 401(k)s costs no tax.
• Check old 401(k)s. A rollover to an IRA, or into your new plan, can consolidate accounts and sometimes lower costs. Compare first, because some plans have excellent institutional funds and different creditor protection.

Thresholds that deserve a second look: any broad index fund over a few tenths of a percent, any fund with sales loads or 12b-1 fees, and any all-in cost above about 1%. See why expense ratios matter and advisor fees.

Larry's fee audit discovered three funds that owned mostly the same stocks for an average of 0.9%. He was paying for diversification that wasn't there. Fran's audit took eleven minutes, and she spent the remaining time feeling smug.

Asset location

Asset location means placing each asset in the account type where it's taxed least. Broad guidelines that many investors use:

• Taxable accounts: broad stock index funds, which tend to be tax-efficient and whose qualified dividends and long-term gains get favorable rates. International funds can go here too, since the foreign tax credit is only available in taxable accounts.
• Traditional IRAs and 401(k)s: bonds and REITs, whose income is taxed at ordinary rates. See REITs vs rentals.
• Roth accounts: assets you expect to grow the most, because qualified withdrawals are tax-free.
• HSAs: often treated like a Roth for long-term growth, if you can pay current medical costs from cash.

Checklist questions: Did new contributions follow the plan? Did you accidentally buy bond funds in taxable accounts? Is your allocation calculated across all accounts as one portfolio, rather than each account separately? There are exceptions, for example treasuries are exempt from state tax, so a full asset location analysis is in the asset location guide.

Tax lots

Every purchase in a taxable account creates a tax lot with its own date and cost. Review them annually:

• Cost basis method: make sure your broker uses specific identification, or the method you intended, for future sales. Pub 550 explains specific share identification.
• Tax-loss harvesting: lots with losses can be sold to offset gains and up to $3,000 of ordinary income a year, with the rest carried forward. Watch the wash sale rule: no substantially identical purchase within 30 days, including in your IRA.
• Tax-gain harvesting: in low-income years (common early in retirement), long-term gains may fall in the 0% bracket. In 2026 it extends up to $98,900 of taxable income for married couples filing jointly (as of Oct 2026). Selling and rebuying raises your basis for free.
• Holding periods: note lots approaching the one-year mark before selling.
• Old records: for shares bought before brokers tracked basis, find and save your records now.

More detail in the taxable brokerage account guide.

Beneficiaries

The least glamorous item on the list, and potentially the most expensive to get wrong. For retirement accounts, HSAs, life insurance and many brokerage accounts with transfer-on-death registration, the beneficiary designation on file with the custodian generally controls who inherits, regardless of what your will says.

• Log in to every account and confirm the primary and contingent beneficiaries.
• Update after marriage, divorce, births, deaths or estrangements.
• Name contingent beneficiaries so an account doesn't default to your estate.
• If a trust is the beneficiary, check the designation matches the trust's current name and terms.
• Keep a list of accounts and where to find them for your executor or spouse.

Illustration: During her annual review, Fran discovered that her old 401(k)'s beneficiary was still her college roommate, from when she first enrolled. One online form later, it was fixed. Larry's review, prompted by this story, found that he had no beneficiaries listed anywhere. He also found an IRA he'd forgotten existed. He now considers the checklist "surprisingly profitable".

Finally, write down what you changed and why, in one short note. Next year's review starts from that note instead of from scratch. Schedule the next review now, on your calendar, for the same month next year.