End of the Year Top 5!

by | Jun 21, 2020 | Budgeting, Retirement, Savings, Tax Planning

Although it seems like you have time to get your finances in order before year end…trust me, you do not.  NOW is the time. If you wait any longer, you could get caught up in the joy and hoopla of the holidays causing you to push your tasks off.  Don’t let the holidays BREAK you! Here are 5 items you need to cross off your end of year financial checklist:

  1.  Use it or lose it FSA benefits.  If you have put money aside in your Flexible Spending Account during the year, you must spend it ALL by December 31st. If you do not spend the funds in your account, you lose them.  Losing your funds means they go back to your employer to use at their discretion.
  2. Open Enrollment is upon us.  This is typically the time of year your employer will allow you to update your benefits.  Benefits like disability insurance, retirement contributions, and life insurance.  Make sure you choose the benefits that are best suited for your family and your budget.  If you are married, discuss your choices with your spouse so you are not duplicating benefits.
  3. If necessary, rebalance your retirement account (401k, 403B, etc.). Work with your financial advisor to determine if you need to rebalance your portfolio. Based on market performance throughout the year, your retirement account allocation may have shifted. You will need to manually adjust your allocation to get back to your original targets—–unless you have a Target Fund that adjusts automatically.
  4. This is tax planning time! Many of the actions you need to take to help reduce your taxes have to be done by December 31st.  You may need to take some last minute deductions, defer your income, take required minimum distributions or offset capital gains.  These actions must take place by year end.  If not, you could make costly money mistakes.
  5. Review your goals to determine what you accomplished and what you did not.  Reviewing your goals now will help as you start to make goals for next year. Look at the goals you accomplished and what it required to be successful.  Make sure you carry those behaviors into next year.