Year End Planning

Holidays, family, food, college football bowl games, and (maybe a bit too much) eggnog will soon eliminate what little spare time you have. So as year-end approaches all too quickly, take just 30 minutes and double check to make sure you’ve completed your financial life checklist for the year. If you’re unsure where to begin, read on – we’ve put together some of the more common items as well as some oft forgotten ones.

What Your Advisor Can Confirm

As should be the case, your advisor is privy to most (if not all) of your financial life, and then some. While the good ones are proactive about reaching out to you, it will still give you peace of mind to confirm part of your checklist with your advisor or their team.

These items include your IRA contributions, whether Traditional or Roth, and that you’ve made those contributions for the correct tax year, as well as the amount you intended (i.e. 2019 maximum for IRAs is $6,000). If you’re age 50 or older, you’re eligible for catch up contributions to your IRAs and for 2019 the catch-up IRA limit is $1,000. Again, your advisor should have this on record, but especially in the year you turn 50 it’s good practice to confirm for yourself as well.

If applicable, you’ll want to confirm any Required Minimum Distributions have been taken – this is often missed with inherited IRAs so take that into account as well. Assuming your advisor have access to view your 529 accounts, you’ll want to confirm if you’ve made your deposits into those accounts for the year. Another often overlooked item is if you recently changed jobs. While it’s easy to leave your old retirement account with your old employer, we recommend moving it to your new plan or into an IRA so you’re always in control of where your money is.

The last couple things to confirm with your advisor are specific to when they’re also your financial planner. With a comprehensive financial plan, you’ll want to confirm annually if you met your savings target for the year. This will help keep you on track for success down the road. Additionally, your advisor/planner can use your financial information to determine if any Roth conversions would be beneficial this year. Note, this is also an item you’ll want to confirm with your CPA or tax preparer.

Items to Confirm with Work

Advisors do have limitations on access to certain information that’s very important in your financial life, so there are things you should independently confirm specific to your employer. First thing you’ll want to confirm is your retirement contributions and catch up contributions if applicable. For 2019 the 401k limit is $19,000 with a catch-up limit of $6,000 if you’re age 50 or older. If you’ve any pay periods remaining, be sure to factor that into your contribution amounts.

In addition to your employer sponsored retirement accounts, you’ll want to check on your health-related accounts (many are provided via your employer). If you have a Health Savings Account (HSA), you’ll want to confirm the amounts contributed to it – 2019 limits are $3,500 for an individual; $7,000 for a family; and there are catch-up limits of $1,000. On the other hand, if you have a Flexible Spending Account (FSA), check on the amount remaining and try to use it up either by getting in those doctor appointments or submitting unclaimed expenses. Only $500 in unused FSA monies can rollover to the next year, any surplus is lost!

Confirm with Your Spouse (or Yourself)

After confirming the previous items, you’ll want to take some time for you and your spouse (or just yourself) to reflect on your overall financial life. Do you have any outstanding charitable or gifting intentions? Did you accomplish the goals you had set for yourself in 2019?

Now is also a good time to begin thinking of next year – it will be here so fast, you’ll want to set yourself up to hit the ground running. Have that discussion about what you want your 2020 goals to be (see some goal setting methods in our previous post). Check out your savings target from your financial plan – do you need to adjust your auto-save amounts? Could you save more (and do you want to)? Begin formulating your plan now so you’re more likely to put it into action when Jan 1 comes around.

Year-End Summary

When you’ve got a qualified team of professionals around you to handle the various aspects of your financial life, don’t feel foolish wanting some additional peace of mind! Completing this checklist of year-end items and know you’re on track to live the life for which you’re planning and working so hard.