By: Andrew Rosen, CFP®, CEP®

With year-end quickly approaching there are only a few more weeks to get those last minute planning items taken care of.  Hopefully, these tips will motivate you to get off Santa’s naughty list and also help better position your finances.  So here goes my holiday inspired 12 days of planning tips.

  1. Max your retirement plan 401(k)/IRA/Roth- Whether you contribute to a work 401(k) or Roth/Traditional IRA make sure to contribute the maximum you can. That includes the catch-up if you are over 50 (which many people miss).  Login to your online account and make sure you have already or are on pace to hit the allowable maximum for 2017.  If you aren’t sure of the allowable maximum click here click here.
  2. Increase your 401(k) 1%- I recognize not everyone is in a position to max out their 401(k). That said most of us can afford to increase one more percentage point and not miss a beat.  If you fall into that category just do it!  You won’t miss the money and you’ll be inching closer to maxing out.
  3. Max your H.S.A contributions and spend those F.S.A dollars– Make sure you squirrel every dollar you can into your work Healthcare Savings Account. This is an often-missed tax deferral that has great benefits.  Additionally, if you contributed to a Flexible Spending Account in 2017 you MUST use these dollars before year end or else you will lose them.  You can even spend these dollars improving your style by getting new glasses from Warby Parker.
  4. Give to Charity- It is the season of giving and what better way to help out others and feel good doing it than giving to charity. There are many great ways to go about this and even some that don’t require you make a payment until 2018 (such as using those credit cards to charge your gift) if crunched with holiday spending.  If you just aren’t sure where to donate can always take a move from George Costanza and give to the human fund, though I doubt they give tax receipts.
  5. Have a strategy for those bonus dollars- Before you know it you’ll be receiving that big year-end bonus. Without a plan those dollars will be spent in a nanosecond.  Don’t be that person!  Have a plan for where those dollars are going and make sure some of the plan includes bettering your financial situation.
  6. Tax loss harvest- One great way to save a few shekels with the tax man is sell some stock losers before year end and realize some losses. You can always buy back in 30 days if you’d like to avoid any wash sale rules.  This way you get the benefit of lowering your taxes and offsetting any realized gains you may have.
  7. Start a 529 college savings plan- Kids grow up fast and college will be here before you know it. If you haven’t already, start a 529 plan and save what you can for your kids’  Even if it isn’t much every little bit helps and might as well take advantage of saving tax efficiently. Plus, you can’t forget the benefits of compound interest.
  8. Review estate plan- Assuming you have an estate plan dust it off and give it a once over. Things are always changing and these documents usually go untouched for years.  Maybe you want to adjust those trusts or do a little something special for your grandkids.  Whatever it may be it is a smart move to give this a review every so often.  Naturally if you don’t have an estate plan than move this to the top of your list.
  9. Check beneficiaries- We simply don’t check our beneficiaries enough. Maybe it’s because of the tedious nature, but whatever the excuse this is a good year-end practice.  Dust off those old insurance policies that your parents bought for you when you were a kid and give a look to make sure you are comfortable with who gets these funds if you pass.  Check everything with a beneficiary including work benefits, property, and investment accounts to be in line with your estate and financial goals.
  10. Roth IRA conversion- Now here is a great opportunity if you are in a low tax year to convert some of your IRA dollars into a Roth. If on the edge remember you have until October 15th to recharacterize the conversion and reverse it.
  11. Take your Required Minimum Distributions- If you are 70.5 years old in 2017 or the owner of an inherited IRA you will likely have to take an RMD this year. Make sure if you haven’t already you get that scheduled before the New Year or be subject to a penalty on these dollars.  I recommend setting this up automatically in most instances if you haven’t already.
  12. Exercise options- If you have unexercised stock options it may make good sense to exercise a portion to stay under a certain tax threshold. I’d review your incomes and deductions to see if there is an optimal amount to exercise as to manage these options most tax efficiently.

Where did 2017 go?

I can’t believe 2017 is almost over already.  Hopefully, you can take some time off and spend it with those that matter most this holiday season.  I plan to do just that and reflect on all the good and bad of the year that was.  Oh and of course make sure I’m dealing with my year end planning list!

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Andrew Rosen

In his role as Financial Planner, Andrew forges lifelong relationships with clients.  He coaches them through all stages of life and guides them to better achieve their life goals.  For more information about Andrew or the other firm partners, Kyle Hill and David Levy, click the link below.

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