By Stephanie Bruno
This year (and decade!) is quickly coming to a close, and if you’re like most Americans, you spend the month of December neck-deep in holiday parties, shopping for gifts, and planning for travel. You might think that managing your finances can wait until you deal with the holiday busyness, but since finance-related resolutions consistently fall in the top five most popular New Year’s resolutions, (1) why don’t you give yourself a head start on your 2020 financial goals? Here are 5 critical financial actions you’ll be glad you tackled when the ball drops on New Year’s Eve!
1. Celebrate Progress And Look To The Future
What financial goals did you set when you rung in 2019? Did you stay on top of those goals or did they get swept under the rug? Take this time to reflect on the past year and mark how far you’ve come, celebrating your progress, no matter how small! What goals do you have for the upcoming year?
2. Invest In Your Future
If possible, max out your contributions to your 401(k) by the end of the year to make the most of your retirement savings. For 2019, you can contribute as much as $19,000 (or $25,000 if you are age 50 or older). Remember, these are your contribution limits and any employer match would be in addition to this. You might also consider contributing to a Roth IRA or a non-qualified IRA if your income is high. For 2019, you can contribute as much as $6,000 (or $7,000 if you are age 50 or older). Finish the year strong by investing in your future!
3. Speak to Your Advisor About Tax Loss Harvesting
If you invest in bonds, mutual funds, or stocks in accounts other than your 401(k) or IRA, review your realized and unrealized gains and losses. You might be able to offset some of your gains by selling some losses. Tax-loss harvesting can help you save on taxes, but you want to make sure the move also makes financial sense for your situation. Talk with your advisor about potentially harvesting your losses to see if it makes sense for you. Any appropriate actions need to be taken by December 31st.
4. Make Some Updates
If you have taken the time and energy to create an estate plan, you’ll want to check in periodically to ensure all the documents are up to date and no major details have changed. Any significant life event is a good time to think about updating your estate plan documents and corresponding beneficiary designations.
5. Give, Then Give Some More
If gifting is one of your long-term financial goals, it’s never too early to start planning for the legacy you want to leave your loved ones without sharing a good portion of it with Uncle Sam.
Each year you can gift up to $15,000 to as many people as you wish without those gifts counting against your lifetime exemption of $11.4 million.
If you’re planning to itemize deductions on your 2019 tax return, be sure to make your charitable contributions before the end of the year. This includes donating appreciated securities, which may help you avoid paying taxes on the gains. If you are taking required minimum distributions, then you have a tax savings opportunity to make charitable contributions from your IRA.
End The Year Strong
Which of these steps do you need to take before the ball drops on New Year’s Eve? Our team at Sea to Peak Financial Advisors would love to help you finish the year strong and set you up for a successful 2020. If you’d like to see if we can add value to your financial life, and you have a free 15 minutes, let’s schedule a call. You can also email us at firstname.lastname@example.org.
We hope you and your family have wonderful holidays and much peace and joy in the new year.
Stephanie Bruno is the founder of Sea to Peak Financial Advisors, an independent, fee-only financial advisory firm helping executives bring meaning to their money. Stephanie earned a bachelor’s degree in finance from the University of New Orleans and a bachelor’s degree in English from Ohio State University and holds the Certified Financial Planner® (CFP®), Accredited Investment Fiduciary® (AIF), Certified Private Wealth Advisor® (CPWA®), and Retirement Manager AdvisorSM (RMA®) designations. She splits her time between Denver and Seattle, where her husband, Steve, serves as the head of Westside School. Outside of the office, Stephanie honors her mom by serving as board chair of the Women’s Foundation of Colorado. Stephanie and Steve have two smart and accomplished daughters, Emma and Leah, and Rio, the thirteen year-old Shiba Inu. To learn more about Stephanie, connect with her on LinkedIn.
Stephanie Bruno is an Investment Advisor Representative of Dynamic Wealth Advisors dba Sea To Peak Financial Advisors. All advisory services offered through Dynamic Wealth Advisors.