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Year-End Planning: Now is the Time to Take Action

| November 05, 2016

It feels like summer just ended, but Halloween came and went, and the Holidays are fast approaching. No wonder we feel we can’t find the time to take care of things we need to do. So, before you eat too much turkey and sweet potato soufflé (you know the one - with toasted marshmallows on top!) we encourage you to take a moment to identify which of our year-end planning suggestions below could provide you with some benefit.


• SAVINGS. Double-check your emergency savings balance – is the amount right for you? You should have 3 to 6 months of household expenses, earning upwards of 1% interest

• SALARY DEDUCTIONS. Verify your tax withholding to avoid penalties and contribute the maximum allowed to your retirement plan. And don’t forget to use up your Flex Spending Account – use it or lose it!

• CHARITY. Make your charitable donations before January and get a receipt! Now is the perfect time to clean out your closets and storage areas. We have a lot of great charities in the area.

• HEALTHCARE. It’s Open Enrollment season for health insurance plans. If you have a high-deductible plan you should implement a health savings account (HSA). You can deduct the amount contributed to an HSA on your tax return.

• INVESTMENTS. Have you rebalanced your portfolio? If you have stocks with losses, consider selling some for a tax loss to offset gains. The younger you are you should also consider a Roth Conversion. Be sure to take your Required Minimum Distribution (RMD) if you own an inherited IRA or are over age 70-1/2 and own an IRA. If you have excess cash to invest, be aware of your mutual fund’s Capital Gains Distribution date. Wait until after that date to invest.

• RETIREMENT. If you are of RMD age, consider an IRA Qualified Charitable Distribution and entirely avoid the related income tax. Also, consider a financial gift to loved ones. The annual allowance for 2016 is $14,000 per person without any reporting requirements.

TAKE ACTION NOW before the Holidays are upon us! Make things as simple as possible. This can include using automated savings, bill-pay and centralized storage of your most important information. Call your tax preparer, as now is the time to plan, not in 2017. By doing a few wise things now you will setup your financial plan for long term success.

Life’s a journey, navigate it wisely!