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7 Things To Do Before Year-End Thumbnail

7 Things To Do Before Year-End

Check in on your investments

Year-end is a great time to review all of your investments, but what should you look for? If you own taxable accounts, you may be able to benefit from ‘tax-loss harvesting’, which involves selling a security that has experienced a loss and replacing it with a similar one, thus allowing to maintain your desired asset allocation. By harvesting the loss you can then offset any capital gains or take a capital loss of up to $3,000 annually, potentially reducing tax liability.


Consider rebalancing your accounts

When you established your investment mix you did so from a standpoint of risk and return to find the optimal combination for your goals. Asset class performance can vary drastically over time, and rebalancing at least annually helps to keep that relationship intact. Selling your winners and buying into asset classes where prices have dropped may present an undervalued opportunity, as well as dollar cost averaging, potentially helping to smooth your returns. This is also a great time to look at any underperforming funds and replace them.


Make retirement plan contributions

Consider the following; make sure you have contributed enough to your company plan to receive the maximum employer matching contribution and check with your HR department for details. In 2015 the maximum an employee can contribute is $18,000 ($24,000 if you are over 50). If you are a high earner watch out for the common pitfall of front-loading contributions, by hitting the max amount too soon you risk forfeiting a match. Traditional & Roth IRA accounts max out at $5,500 ($6,500 if you are over 50).

Review your budget

 Not knowing where your money is going is one of the biggest missteps we face. Reference a great read, 'All Your Worth', for tips on how to establish and stick to a budgeting system, and find a useful app to help you through the monthly process. A budgeting system will create freedom to spend on the things you value the most, and the peace of mind and confidence that comes with having a plan for your future.

Bunch your deductions

By prepaying bills, taxes and making charitable contributions and gifts you can max out your tax deductions for the year. This is especially helpful if you expect your current year income to exceed future income. How to do it? Pay your January mortgage payment prior to year-end, pre-pay state and local taxes for next year, give to charities, and make planned gifts to family members.

Request your credit report

Annualcreditreport.com offers access to a free credit report from all three reporting agencies for every consumer annually. Even if you have excellent credit it is wise to check for any inaccuracies or discrepancies. Spotting suspicious activity and accounts you do not recognize can help detect fraud and identity theft.

Unfinished business

Plan to finish 3 things you set out to accomplish this year. Tackle promises made to family, at work, or with friends. Entering the holidays with a sense of accomplishment can create momentum for the entire year ahead. And, don’t forget to put your plans and goals in place for the New Year!

*The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.