Year End Planning Tips

November 8, 2022

The end of 2022 is quickly approaching and here are some financial tips to capitalize on before the end of the year.

Review your financial plan to see if you are on track to meet your financial goals. Did you have any changes in the year that impacted your finances such as births, marriage, death, divorce, or career changes? Any major event can impact your overall plan and should be factored into your overall financial plan. If you do not have a financial plan yet, make that your priority.

Review your employee benefits and make sure you are taking advantage of all the benefits available to you. If you are not contributing the full amount to your 401(k) to get the maximum employer match you are leaving “free money” on the table. Especially if you are contributing to a pre-tax 401(k) that is reducing your taxable income now.

Roth conversions have been a huge topic this year and with taxes being at a low, it might be something to consider. Especially if your investments inside a pre-tax account have dropped in value, an in-kind Roth conversion is a great tool.

Conduct a year-end tax review. This year has been rough for investments, and it might make sense to look at tax loss harvesting. Tax loss harvesting is offsetting some capital gains with capital losses.

Review your investment portfolio or get a second opinion on your portfolio. Your allocation should match your risk tolerance and where you are in your life. If you are retired and on fixed income, the market volatility, rising interest rates, and inflation are impacting your portfolio negatively this year. Investing should be for the long term, and you need to make sure your portfolio is still invested to meet your financial goals.

Look at your charitable contributions and see if you maximized your charitable donations for the year. If you still have not taken your Required Minimum Distribution (RMD) for the year and do not need the income and want to avoid more taxable income, you can donate your RMD directly to a qualified charity up to $100,000.

Review your credit and your debt. Do you have credit card debt that you should work on paying off? With interest rates increasing, it will increase the interest rate on any outstanding credit card balances. Looking at all of your liabilities and coming up with a strategy to pay off the debts starting with the highest interest rate will be beneficial for your financial plan.

Review your estate planning documents and make sure they are up to date and still in line with your wishes. If you do not have any estate planning done, complete the essential documents as soon as you can. Your situation might not need an estate planning attorney and we can give you suggestions on how to properly title assets to avoid probate.

Look at your insurance policies. From auto and home insurance to life insurance and long-term care. Protecting your assets is just as important as growing your assets.

All of these tips are covered in the complimentary financial plan that we offer. Give us a call and we can help you with your individualized situation.

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