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.
- 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.
- 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.
- 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.
- 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.
- 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.