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5 Year-End Planning Considerations 2017

The end of the year is a great time to review the progress you’ve made toward your goals and take advantage of some planning opportunities. Below are five items to consider.

  1. Portfolio Adjustments
  • If you have a taxable investment account you will want to do tax-loss harvesting on any capital losses.
  • Mutual funds will often distribute capital gains so pay attention to the date and amount of the distribution.
  • If you’re over 70.5 years old, make sure you take your required minimum distribution (RMD). You will also have a RMD, regardless of your age, if you are the owner of a beneficiary (inherited) IRA account.
  • Lastly, if you haven’t rebalanced your portfolio recently, this would be a good time to get back to your targets.
  1. Excess Cash
  • The annual gift tax exclusion is $14,000. This can be gifted to as many individuals as you’d like each year.
  • Consider charitable donations.
  • Consider IRA contributions, if eligible.
  1. Tax Bracket
  • If you are in a low-income tax year consider a Roth IRA conversion to convert some or all of your IRA to your Roth. This strategy works best when the conversion uses a lower tax bracket than you expect to be in throughout retirement.
  • Check out our post on year-end tax moves to reduce your income taxes owed.
  1. Budget
  • Take some time to review your budget and consider adjustments for next year.
  • If you have never used a budget, this is a great time to make one for next year.
  1. Health insurance
  • You may have received a letter from your insurer about changes to your policy which would require some action on your part. Even if you haven’t received such a letter, the end of the year is a good time to review your coverage and consider any adjustments that may be needed.