As the end of the year approaches it’s a good reminder to take a second to reflect on all the things that have happened this year. It’s also a fantastic time to check some of those financial to-dos off of your list.

I’m Brandy Branstetter, Principal – Wealth Advisor at Beyond wealth where we are focused on helping our clients go beyond wealth by helping them use their money to create a life they love.

Today I’m going to give you a few items that should definitely make it onto your end of year financial checklist. These year-end topics will cover a number of financial planning issues and while there are certainly a lot of things that could be added to this list, I believe these are the top 10 that apply to everyone.

Paycheck stub review

At the end of the year, you want to review your paycheck stubs to see if you contributed to a health care FSA or Dependent Care FSA this year? If so, make a plan to spend down those assets before the end of the year so you don’t lose that money.

The next thing you want to look for on your paycheck stub review would be whether your income was significantly higher or lower this year than in previous years? If it was much higher or if you had a major windfall that could impact taxes (inheritance, RSU vesting, stock options, bonuses) – set up a meeting with your accountant to make sure you had enough withheld for taxes.

If your income was much lower this year and you expect it to be higher – consider the possibility of Roth conversion.

One of last things you need to review when looking at your paycheck stub is whether or not you are contributing to an Employer Sponsored retirement account? You can contribute up to $19,500 every year to your 401k or other retirement accounts through your employer. So one thing to consider is, do you have room to bump up your contributions before the end of year to really maximize your savings?

Keep in mind if you are 50 or over you can add an additional $6,500 to those contributions which is a great opportunity for those of you who are approaching retirement and looking to maximize tax deferred savings.

Savings & Investments

The next items we are going to talk about are going to revolve around your savings and your investments. If you contribute to an IRA, Roth IRA or even a child’s 529 college savings account, it is really important to consider getting those contributions in before the end of the year. The sooner you get that money invested, the more opportunity you have to compound your interest.

The next thing you should do is review your investment performance. We know that a lot of people didn’t look at their statements earlier this year because of COVID, but it's good to really look and see if you have made back any losses? If so, great! if not, you should be asking why not. The end of the year is a great time to check to see if your investments are still allocated properly and that is a conversation you can have with your financial advisor.

Tax Planning

Now let’s shift gears a little bit and talk about the importance of Tax planning during your Year End financial review. Make sure if you have taxable investments that you are taking advantage of tax loss harvesting opportunities. Did you know that you can carry forward $3,000 of losses each year to offset ordinary income? It's true, you can!

Are you near the threshold that is going to bump you into the next tax bracket? If so, consider strategies to defer income or accelerate deduction to keep you in the lower bracket instead of floating into that higher bracket.

Are you charitably inclined? You may want to consider bunching your charitable contributions together and give every few years to maximize itemized deductions.

Review Your Estate Plan

Another really important to do to check off your list at this time of year is to review your estate plan. When was the last time you reviewed your will or your trust documents. It would be a good time to sit down and go over that to make sure everything is still how you want it to be set up. Double checking that your beneficiaries are assigned to not only your life insurance or retirement and investment accounts but also think about your workplace benefits.

Review & Plan Annual Financial Goals

The last item I would like to make sure you have on your Year End Financial Checklist is for you to reflect on your financial goals. Did you accomplish what you hoped to accomplish with your money this year? If so, that is great! Start considering what’s next and what goals do you want to accomplish in the next year?

If you didn’t achieve the financial goals that you set for yourself this year, then it is time to reflect back on what happened and what adjustments can be made to put you on track for next year?

The end of the year is a great time to discuss some of these options with your financial planner. We’re here to help, please don’t hesitate to reach out with your questions or if you want to get some more information on the ideas I shared with you today.

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