Year End Planning Tips

As we prepare to say goodbye and put 2020 behind us - way behind us, I have put together a few tips to consider for your finances to close the year out.

Meet with your adviser

Meet with your financial adviser to review and update your plan and make sure you are still on track for your goals. Discuss any changes in your current situation - a new job, home purchase, a new child or grandchild, health concerns, early retirement. Plans are rarely static. As your life changes, your plan needs to change with it.

Add to retirement plans

If you are financially able to do so, max out your retirement plans. If you are under age 50 the 2020 contribution limit for employees to their 401k plan is $19,500, employees 50 or older can contribute up to $25,500 including the catch-up bonus. Adding to your plan will increase your retirement savings and save you some taxes.

Sell some losers

If you have investments in non-retirement accounts and have realized gains, you sold for more than you paid for it, consider selling any losers to offset those gains and the taxes they will produce. If you sell a losing position you must wait 30 days from the sale date to repurchase the same or a “substantially identical” security to avoid the “wash sale rule”.

Reload your “rainy day” fund

Hopefully, you have a cash account set aside to cover emergencies and carry you through rough patches without making it necessary to sell investments at the wrong time or generate taxes. Many advisers suggest keepings six months of expenses as a safety net. If you have had to dip into the fund this is a good time to reload and start fresh.

Review your employer benefits

Employer benefits provide employees with many necessary benefits: health insurance, disability insurance, and life insurance. The end of the years is a time employers might “open the enrollment window” for changes in your coverage.