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Four Financial Steps to Take Before the End of the Year

Filed under: Retirement, Financial Planning

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Fourth Quarter Planning Checklist

It’s hard to believe the year is almost over, but October is already upon us. Soon the holidays will be here and then we will flip the calendar to 2020.


These last few months are also your last opportunity to make important financial decisions before the end of the year. It’s a great time to review your strategy and make adjustments as you head into 2020.


Below are a few items to include on your end-of-year planning checklist:

Review your tax strategy.


The deadline for filing your 2019 taxes may be in April 2020, but that doesn’t mean you can’t get started on your planning today. In fact, by starting your planning now, you can take advantage of deductions and other opportunities.


For example, there may be deductions that you haven’t fully used. You could make a contribution to your favorite charity before the end of the year to take advantage of the charitable deduction. You could make contributions to tax-deductible retirement accounts, like an IRA. Do you have any outstanding medical bills? You may be able to deduct those costs if you pay them before the end of the year.


Also, consider whether you can defer income until next year. Perhaps you’re due a sizable bonus or other compensation. Perhaps you could defer that income until after January 1 so it’s not included in your 2019 return. If you’re considering selling appreciated assets, like stocks, you may want to wait until after the beginning of the year to delay the capital gains. A financial and tax professional can help you identify these opportunities and make informed decisions.

Increase your contributions.


Will you maximize your contributions to your 401(k) and IRA this year? If not, you still have time to do so. In 2019, you can contribute up to $19,000 to a 401(k), or up to $25,000 if you are age 50 or older. You can contribute up to $6,000 to an IRA, or up $7,000 if you are 50 or older.1


This also may be a good time to consider your contributions for 2020. The IRS has not yet announced the 2020 contribution limits. However, increasing your contribution rate could help you accumulate more assets. Even a moderate increase of a percentage point could compound to significant savings over time. Think about increasing your retirement savings as you head into 2020.

Check your benefits.


The fall is usually open enrollment season for many employers. This is a good time to review your health coverage and other benefits to see if they still fit your needs. If you’re nearing retirement and have access to an HSA through your employer, you may want to consider making contributions. An HSA can be a tax-efficient funding source for health care costs and you can take the assets with you into retirement.

Adjust your allocation.


Finally, this may be the right time to review your allocation. Your needs and risk tolerance could change over time. It’s common for people to become more risk-averse as they approach retirement. It’s important that your allocation changes along with your tolerance for risk.


A fixed indexed annuity (FIA) might help you take some of the risk out of your strategy. FIAs offer the potential to earn interest based on the performance of a market index. If the index performs well over a certain time period, you may earn more interest, up to a limit. However, if it performs poorly, you simply earn less interest; you don’t lose money due to market declines.


Ready to start on your fourth-quarter financial checklist? Contact us at Ambrose Financial and Insurance Services. We can help you analyze your needs and implement a strategy. Let’s connect soon and start the conversation.




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19305 – 2019/9/25