Year-End Financial Checklist:

Essential Tasks to Wrap Up Your Finances

As we approach the end of the year, it’s time to review your finances and ensure everything is in order before the calendar flips. This is an essential step for anyone looking to start the new year with a clear financial picture, whether you’re planning for a comfortable retirement, building your savings, or preparing for future generations. Here’s a year-end financial checklist to help you make the most of your money.

1. Review Your Budget and Spending

The end of the year is a great time to analyze how well you adhered to your budget. Look at your income, expenses, and savings to see if they align with your financial goals. Consider where you might have overspent and identify areas for improvement. Use this information to create a more accurate and realistic budget for the coming year.

2. Maximize Retirement Contributions

If you haven’t already, make sure to maximize your contributions to retirement accounts like a 401(k) or IRA. For 2024, the contribution limits for a 401(k) are $22,500, with an additional $7,500 if you’re 50 or older. For IRAs, the limit is $6,500, with a $1,000 catch-up if you’re 50 or older. Contributing as much as possible helps you take advantage of tax benefits and grow your retirement savings.

3. Harvest Tax Losses

Tax-loss harvesting involves selling investments that have declined in value to offset gains in other areas of your portfolio. This can lower your tax bill and make your investments more efficient. Be sure to consult with a tax professional to ensure you’re making the most of this strategy without triggering unnecessary tax implications.

4. Evaluate Your Investment Portfolio

A lot can happen in a year, and it’s essential to review your investment portfolio to make sure it aligns with your financial goals and risk tolerance. Rebalance your portfolio if necessary, especially if certain assets have significantly grown or declined in value. Diversification remains a key element of a well-rounded investment strategy.

5. Plan for Charitable Contributions

If you’re planning to make charitable donations, doing so before year-end can also help reduce your taxable income. Consider donating appreciated stocks or securities, which can provide additional tax benefits compared to cash donations. Be sure to keep detailed records of your contributions for tax filing.

6. Review Insurance Coverage

Insurance is a crucial part of any financial plan, providing protection against unexpected life events. Take time to review your health, life, home, and auto insurance policies. Ensure your coverage still meets your needs, and update your beneficiaries if necessary. If your circumstances have changed (such as buying a new home or having a child), consider adjusting your coverage.

7. Use Up Flexible Spending Accounts (FSAs)

If you have a Flexible Spending Account (FSA) for healthcare or dependent care, check the balance and spend any remaining funds before the “use it or lose it” deadline. Some employers may allow a small amount to roll over, but generally, unused funds will be forfeited at the end of the plan year.

8. Review Estate Planning Documents

Estate planning isn’t just for the wealthy—it’s about ensuring your wishes are honored and providing for your loved ones. Review your will, trusts, power of attorney, and healthcare directives to make sure everything is up to date. This is particularly important if you’ve experienced significant life changes, such as marriage, divorce, the birth of a child, or the passing of a loved one.

9. Plan for Next Year’s Financial Goals

Reflect on what you’ve achieved financially this year and set clear, actionable goals for the next. Whether it’s saving more, reducing debt, or investing for your children’s education, having specific objectives can keep you motivated and focused throughout the year. Create a plan to track your progress and celebrate your wins along the way.

10. Consult with Your Financial Advisor

A financial advisor can offer valuable insights and help you navigate complex financial decisions. Schedule a year-end meeting to review your progress, adjust your strategies, and plan for the coming year. This is especially helpful if you’re preparing for long-term goals like retirement or leaving a financial legacy for your children and grandchildren.

Final Thoughts

Taking care of your finances now means you’ll be better prepared for whatever the future holds. By tackling these essential year-end tasks, you can optimize your tax situation, strengthen your investment portfolio, and set yourself up for success in the new year.

If you need personalized advice, consider consulting a financial professional to help craft a strategy tailored to your needs and goals. Here’s to a prosperous and financially secure new year!

*Prepared by Jonathan Neher

Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a broker-dealer, member FINRA/SIPC. Advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Avenues to Wealth Financial Advisors and Cambridge are not affiliated.