5 Simple Year-End Financial Moves to Make Before You Pop the Champagne

As 2018 comes to a close, we’ve got high hopes for a happy and healthy 2019 — and one full of successful financial management decisions, too. Fortunately, there are a few easy year-end financial moves you can make that’ll put you in a prime position to tackle the fresh calendar with confidence.

Setting yourself up for a plentiful and productive new year usually starts with a good, hard look at this year’s paperwork. This doesn’t take too much time or effort, but can make a significant impact on your tax returns and overall expenditures!

Without further ado, here are our five suggestions for end-of-year financial housekeeping to ensure a smooth start to 2019.

1. Consolidate Your Accounts To Simplify Your Finances

No matter how well you manage your money, it’s difficult to take advantage of every tax opportunity (let alone keep track of all those pesky fees and commissions) if you’ve got a dozen different accounts. Streamlining and consolidating your investments will put you in the best position possible to ensure you’re getting — and keeping — every penny you earn.

2. Check The Beneficiaries On Your Life Insurance And Investment Accounts

You’d be surprised at how often we see missing or erroneous beneficiary designations. Be sure to check all of your accounts, including life insurance as well as annuities and investments! Should anything happen, the money will move far more easily if your beneficiary doesn’t have to file the paperwork in real time.

3. Review  Auto And Home Insurance Coverage, And Consider Updating Policies

It’s no one’s favorite bill to pay, but one thing’s for sure: You’ll be happy to have your insurance coverage if you need it. It’s a good idea to take a look at your existing auto and home insurance policies and make sure you have the coverage you need for the upcoming year.

Furthermore, keep in mind that low deductibles can drive your premiums higher — and depending on your circumstances, it might be worth it to pay less up front. To save even more money, consider dropping collision and comprehensive on older vehicles or ones you drive less frequently — or consider upping your liability coverage and adding an umbrella policy on top.

4. Harvest Losses And/or Boost Retirement Contributions To Reduce Taxes

Investment gains? Awesome. Paying expensive taxes on those gains? Not so much.

Fortunately, you can offset capital gains with capital losses, either by selling low-value assets or by claiming realized capital losses on your tax return. Whether you’re single or married and filing jointly, the IRS allows you to offset up to $3,000 per year in ordinary income — and you can carry forward any unused losses to use in upcoming years.

Another great tax-reduction strategy: contribute to your retirement accounts! Traditional 401(k)s, IRAs, and other retirement investment contributions are tax-deductible, lowering your overall tax liability for the year’s income.

5. Harvest Gains And/or Perform Roth Conversions To Boost Income

Thanks to the recent changes to the tax code, married couples may now be able to push their income as high as $100,000 while paying 0% capital gains. So if your income is lower than you’d like, you might want to take the opportunity to harvest some gains in order to raise your investments’ cost basis — which will mean a lower tax liability when you finally do sell them later on down the line.

Converting some of your retirement savings to Roth accounts can also set the groundwork for tax-efficient withdrawals come retirement time, since you’ll be able to pull tax-free distributions. Keeping a mix of Roth and traditional investments can help you keep your taxable income in the lowest bracket possible.

Taking an overview of your money matters at the end of the year is a great way to set yourself up for future success — and also to get a sense of how your investments have been performing. It can be easy to let our finances run on autopilot, but by taking control of the wheel, we can ensure we arrive at our destinations with all the wealth we’ve amassed along the journey.

For more information on any of these year-end financial moves, as well as more advice tailored to your specific situation, please don’t hesitate to reach out to us and schedule a consultation.

No matter the lay of your monetary landscape, we’re here to help you maximize your returns and discover the lifestyle you deserve.

investing for retirement ebook ipad - McClain Lovejoy
investing for retirement ebook ipad - McClain Lovejoy
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