By Paul S. McNulty, CFP®
A new year is almost upon us, and it’s all too easy to mentally jump ahead to 2020 and start making plans for the coming months. But how you finish something is just as important as how you start it. So, amid holiday events, travel, and the busyness of the season, give yourself a leg up on next year’s financial goals by crossing these 5 things off your year-end checklist.
1. Celebrate Victories And Set New Goals
Chances are, you set some financial goals for the year when you rung in 2019. Have you checked in on those goals throughout the year or did they get swept under the rug? Take a look at the past year to mark how far you’ve come and celebrate your progress, no matter how small! Then evaluate your saving and spending from the past year, set some new goals, and adjust your financial plan, taking into account any life changes such as marriage, relocation, or a job change.
2. Boost Your Savings
If possible, max out your contributions to your 401(k) by the end of the year to make the most of your retirement savings. For 2019, you can contribute as much as $19,000 (or $25,000 if you are age 50 or older). Remember, these are your contribution limits and any employer match would be in addition to this. You might also consider contributing to a Roth IRA. For 2019, you can contribute as much as $6,000 (or $7,000 if you are age 50 or older). Finish the year strong by investing in your future!
3. Speak To Your Advisor About Tax Loss Harvesting
If you invest in bonds, mutual funds, or stocks in accounts other than your 401(k) or IRA, review your realized and unrealized gains and losses. You might be able to offset some of your gains by selling some losses. Tax-loss harvesting can help you save on taxes, but you want to make sure the move also makes financial sense for your situation. Talk with your advisor about potentially harvesting your losses to see if it makes sense for you. Any appropriate actions need to be taken by December 31st.
4. Be Sure To Update
Your estate plan and insurance coverage, that is. If you have taken the time and energy to create an estate plan, you’ll want to check in periodically to ensure all the documents are up to date and no major details have changed. Any significant life event is a good time to think about updating your estate plan documents. If you change any of the beneficiaries in one place, such as a life insurance policy, make sure that they are consistent with the other documents so that there is no confusion.
Your insurance needs may have changed as the year has gone on, which is why it’s important to regularly review your insurance coverages and your designated beneficiaries to make sure they are up to date and reflect your current financial situation. For example, if you’ve paid off debt and your youngest child has just graduated from college, you may not need as much life insurance coverage since your family’s needs and liabilities have decreased. You might also want to evaluate your need for other types of insurance you may not currently have, such as long-term care insurance.
5. Make The Most Of Your Generosity
If gifting is one of your long-term financial goals, it’s never too early to start planning for the legacy you want to leave your loved ones without sharing a good portion of it with Uncle Sam.
Each year you can gift up to $15,000 to as many people as you wish without those gifts counting against your lifetime exemption of $11.4 million. If you’ve yet to gift this year or haven’t reached the $15,000 limit for a particular recipient, make sure you do this by December 31st.
If you’re planning to itemize deductions on your 2019 tax return, be sure to make your charitable contributions before the end of the year. This includes donating appreciated securities, which may help you avoid paying taxes on the gains. Along with your other tax documents, find and organize any receipts you have from donations to charities, whether made in cash, as a securities contribution, or other type of gift.
Here’s To 2020!
Which of these steps do you need to take before the ball drops on New Year’s Eve? Our team at Boston Metro Advisor would love to help you finish the year strong and set you up for a successful 2020. Contact us for a complimentary consultation by calling (781) 995-0253 or email me directly at firstname.lastname@example.org today!
Paul McNulty is the founder of Boston Metro Advisor with over 20 years of experience helping people navigate the ups and downs of the economy toward the financial future they envision. His education consists of a Bachelor of Science in business administration from the University of Rhode Island and the CERTIFIED FINANCIAL PLANNER™ (CFP®) professional designation.
Paul’s experience and education have made him a multi-faceted professional capable of assisting people with virtually all their financial needs. His services include every facet of retirement planning, from 401(k) rollover services and income planning to wealth management and estate planning. Paul has been active in his community over the years as a youth sports coach. When he’s not spending time with his wife, Cindy, and their two children, who are both recent college graduates, Paul enjoys reading, playing golf, and fishing. Learn more about Paul by connecting with him on LinkedIn.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.