Your end-of-year financial checklist

end of year checklist

end of year checklist

The end of the year means different things to different people as they make decisions and set their intentions to improve various aspects of their lives. However, there is one thing everyone needs to do as the calendar begins to move into another January: take stock of your personal finances and make the necessary moves before the new year. This page will walk you through what you need to do before the end of the year to get the most out of your personal finances. For more help preparing your finances for the end of the year, consider work with a financial adviser to address these priorities.

1. Review your financial plan

Many things can happen in a year. You may have made a major purchase, gotten a raise, or gone on vacation. This can have a big impact on your financial plan. You should check with your financial adviser if you have one, or find one if you don’t.

2. Rebalance your portfolio

In addition to checking your overall financial plan, you should also examine your investment portfolio to see if it could benefit from rebalance your portfolio. This is especially true in 2022 – the market has been extremely volatile and you may need to take a look at your asset allocation. Change money from stocks to bonds or vice versa if necessary.

This is also a good time to think about whether there are any investments you are ready to move on from, or if there is a new investment you want to consider making.

3. Think about taxes and tax loss collection

Taxes aren’t due until April, but that doesn’t mean you can’t start thinking about your tax bill right now. One specific way you can approach taxes right now is tax loss collection. Tax loss collection is a process by which you can reduce your tax bill by selling securities at a loss. It is very important that you get this process right, as there are many rules and regulations you will need to follow, so it makes sense to work with a financial advisor in this case.

4. Evaluate your charitable donations

end of year checklist

end of year checklist

Giving to charity is a good idea for a variety of reasons. First of all, it makes you feel good and it does good to others. While those are obviously good enough reasons to donate to charity, the third reason may be what pushes you over the edge: You may get a tax break. Charitable contributions are tax-deductible, which means you may end up owing less once you’ve filed your return. However, you must make the deductions before the end of the year to get this year’s tax deduction, so write those checks and get them before the new year.

5. Consider your debt

The end of the year is also a good time to check your debt. If you received a Christmas bonus, for example, you could use it to pay off some debt, whether it’s an outstanding credit card debt or a student loan that needs to be paid off.

6. Make contributions to your retirement plan

You can contribute up to $20,500 to your workplace retirement plan, such as a 401(k) in 2022. If you want to maximize your contributions for this year, you’ll need to make sure you make any contributions before the end of the year. If you have already reached your maximum contribution limit for this year, the maximum contribution will increase to $22,500 in 2023.

You can also make contributions to your individualized retirement planup to the $6,000 limit for 2022. However, you have a little extra time in this case, since you can allocate contributions for this year until tax day.

7. Consider Medicare prices

If you’re old enough to sign up for Medicare, you want to make sure you’re aware of the price changes coming in 2023. Here’s one you’ll really save a bit of money on: the standard monthly premium for Medicare Part B it will drop from $170.10 to $164.90 in 2023. That’s not exactly a windfall, but hey, it’s better than a price increase.

8. Watch your Social Security increase

Social Security, for its part, it’s going up, already big. Due to record inflation last year, the increase will be 8.7%. Be sure to keep that in mind when considering your 2023 budget.

9. Review your estate plan

end of year checklist

end of year checklist

The end of the year is also a good time to review your estate plan. There may be changes you want to make: if you’ve made money or bought a new house, for example, you’ll want to adjust your will. You should also verify the beneficiaries of all your retirement accounts, especially if you’ve been through a major life event like a wedding, divorce, or the birth of a child.

The bottom line

The end of the year is the perfect time to take stock of your personal finances and make any necessary adjustments. From catching up on retirement contributions to making charitable contributions, you have a little time left to get everything in order before 2023.

Financial Planning Tips

  • No matter the time of year, a financial planner can help you make and execute a financial plan. Finding a qualified financial adviser doesn’t have to be difficult. SmartAsset free tool connects you with up to three financial advisors serving your area, and you can interview your compatible advisors at no cost to decide which one is right for you. If you’re ready to find a counselor who can help you reach your financial goals, start now.

  • If you have access to a 401(k) and haven’t opened an account yet, now may be the time to do so – open enrollment is usually towards the end of the year. Be sure to save enough to take advantage of any employer party They offer you

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The charge End of Year Financial Planning Checklist first appeared in Smart Assets Blog.

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