Year-End Financial Planning Checklist


Pay attention to these 7 Year-End Financial Tasks

This Christmas, give yourself the gift of financial confidence and finish the year strong by taking care of these financial tasks that should be addressed by December 31st.

By December 31

1. Review and Take Required Minimum Distributions (RMDs): If you’re 70 1/2 or older, the IRS requires you to take RMDs from certain retirement accounts every year by December 31st. If these RMDs are not taken, you face a penalty of 50% of the amount that wasn’t taken. The IRS will get their taxes, one way or another!

2. Max out company retirement plan contributions: If you receive a December bonus, the 401(k) is a great home for these dollars. The 2018 maximum employee elective deferral is $18,500, and employees over 50 can take advantage of catch-up contributions and contribute an additional $6,000 in 2018 as well.

3. Harvest tax losses: Now may be a good time to sell losing positions in taxable accounts to offset gains, especially if they no longer fit within your long-term strategy. Prior to doing this, talk to a CPA so they can help you understand how selling may affect your tax situation.

4. Fund the Health Savings Account (HSA): If you have a high-deductible health insurance plan, you’re able to contribute as much as $3,450 before taxes in 2018!! Families can contribute up to $6,900, and those 55 and older can contribute an extra $1,000. The HSA is a great tool to help minimize tax liability.

5. Check Flexible Spending Account (FSA) Balances: These accounts are generally “use it or lose it” so now is a great time to tap these accounts for eligible expenses by December 31st. Your employer plan may offer a grace period, so check with your plan to understand deadlines.

6. Contribute to a 529 College Savings Account: Many states offer immediate tax savings for contributing to a 529 by offering a full or partial state income tax deduction or credit for 529 contributions.

7. Reflect on 2018 and Plan for 2019: The end of the year is a natural time to reflect on your 2018 financial life, as well as set financial priorities for 2019. Developing a holistic financial plan is always a smart financial move.

Cheers to finishing 2018 strong and starting 2019 with intention!

Kristin Schroeder