‘Tis the season for making lists, checking them twice, and ensuring that your financial future remains secure and bright. As you bid farewell to the current year, it’s essential to engage in thoughtful year-end financial planning. To guide you in setting up a solid foundation for success, here are 25 crucial actions you should take before the year wraps up:
- Reflect on Your 2024 Financial Wins and Losses
Take a moment to evaluate your financial wins and losses from the expiring year. Consider areas where you excelled financially and identify those that require improvement. With the Boldin Retirement Planner’s year-end estimates at your fingertips, you can easily assess your financial journey.
- Strategize for Lower Lifetime Taxes
Optimize your finances by planning to reduce your tax liabilities for the current and upcoming years. Effective tax planning with Year End Tax Advice for Retirees can be the cornerstone of your financial strategy.
- Explore Roth Conversion Opportunities
Delve into the complexities of Roth conversions to minimize your 2024 taxes. Utilize tools like the Roth Conversion Explorer in the Boldin Retirement Planner to personalize your conversion strategy and maximize your net worth.
- If Still Working, Maximize Retirement Savings
Ensure you’re capitalizing on retirement savings plans by reaching contribution limits. Increase your savings rate and take advantage of catch-up contributions to maximize your long-term financial well-being.
- Consider Opening an HSA
Maximize tax benefits by opening a Health Savings Account (HSA) if eligible. This triple tax-advantaged account can be a valuable tool for saving towards future healthcare expenses.
- Assess Your Current Insurance Coverage
Review your insurance policies to ensure they align with your current financial landscape. Evaluate health, Medicare, long-term care, and life insurance coverage to safeguard your financial stability.
- Determine Your Retirement Savings Needs
Calculate the amount needed for a comfortable retirement based on your unique circumstances. Use robust planning tools like the Boldin Retirement Planner to gain insights into your projected retirement savings necessities.
- Continuously Update Your Retirement Plan
Regularly revisit and update your retirement plan to reflect changes in your finances and lifestyle. Ensure that your investment strategies and savings targets remain in sync with your evolving goals.
- Take Required Minimum Distributions if Over 72
Prioritize taking Required Minimum Distributions (RMDs) if you’ve crossed the age threshold. The Boldin Retirement Planner effortlessly models your RMDs, helping you stay on track with your distributions.
- Direct Savings from Reduced Spending into Retirement Accounts
Redirect savings from reduced expenditures into your retirement accounts. Invest these funds wisely for potential future returns.
- Increase Your Monthly Savings Rate
Leverage any income bumps to boost your monthly savings rate and accelerate your financial growth.
- Save Your Year-End Bonus
Opt to save instead of spending your year-end bonus to strengthen your retirement savings. Visualize the long-term impacts using tools like the Boldin Retirement Planner.
- Automate Your Savings
Simplify retirement saving by automating your contributions. Commit to consistent and hassle-free savings through automated processes.
- Develop or Assess Your Investment Plan
Establish a comprehensive investment plan or assess the adequacy of your existing strategy. Define your asset allocation and seek expert guidance for sound investment decisions.
- Rebalance Your Investments
Review and rebalance your investment portfolio to manage risk effectively. Ensure your asset allocation aligns with your financial goals.
- Review Your Social Security Statement
Regularly monitor your Social Security statement to ensure accurate tracking of your benefits. Stay vigilant about updating your earnings records on your My Social Security account.
- Evaluate the Need for a Financial Advisor
Consider engaging a financial advisor to expertly navigate your retirement finances. Seek professional guidance for optimal asset allocation and wealth management.
- Establish an Emergency Fund
Prioritize building an emergency fund to safeguard against unforeseen financial setbacks. Ensure you have adequate savings to cover living expenses during challenging times.
- Assess Annual Expenses and Project Future Spending Phases
Evaluate your yearly expenses and forecast future spending needs throughout various retirement phases. Tailor your financial plan to meet your evolving lifestyle requirements.
- Evaluate Your Living Situation and Housing Equity
Assess the alignment between your living arrangements, financial goals, and lifestyle preferences. Consider leveraging tools like the Boldin Retirement Planner to model housing changes and evaluate their impact on your financial outlook.
- Review Your Mortgage Status
Strategize based on current interest rate trends and make informed decisions regarding your mortgage. Plan for future scenarios, such as paying off your mortgage or tapping into home equity.
- Review Your Estate Plans
Ensure your estate plan is up to date to safeguard your loved ones and maximize your wealth. Verify beneficiary designations and update wills and trusts to reflect your current wishes.
- Prioritize Health Check-Ups and Wellness Goals
Schedule routine medical check-ups and establish health goals to maintain your physical and mental well-being. Embrace proactive measures to enhance your overall health.
- Utilize Remaining FSA Funds
Strategically allocate remaining Flexible Spending Account (FSA) funds before the year concludes. Optimize tax benefits by utilizing these funds for eligible health care and dependent care expenses.
- Consider Tax Loss Harvesting
Minimize tax liabilities by offsetting investment losses with gains through tax loss harvesting. Strategically utilize this technique to optimize your tax-saving opportunities.
- Develop Effective Giving Strategies
Embark on tax-efficient charitable giving strategies to contribute to meaningful causes. Explore donor-advised funds, trusts, and other gifting methods for an impactful and tax-savvy approach to philanthropy.
- Establish Financial Goals for the Upcoming Year
Plan and set clear financial objectives for the next year to propel your financial journey forward. Consider debt management, investment optimization, and income growth as part of your overarching financial aspirations.
- Assess and Set Goals for Your Time
Beyond financial pursuits, prioritize setting goals for your lifestyle and personal fulfillment. Envision your retirement lifestyle, set priorities, and align your time management with your values and aspirations.
