7 Items for Your Year-End Financial To-Do List

As we draw towards the end of the year, there are a few things that you will want to check off your financial to-do list.  Although you may feel like you want to take your foot off the petal and just enjoy the season, it's important to address these financial items now.  You will likely benefit from a tax and savings perspective by doing so.  Take a look at the below to-do list and start off the new year on the best financial footing possible.

The 30-Minute Family Report Card

Something that I often suggest is to do a “30 Minute Family Report Card.”  During this time, you can assess your current financial situation and review the past year.  Did you meet your financial goals?  Did you pay off the debts that you hoped to?  Did you keep within your budget?  Answer these questions thoroughly and honestly with your spouse and family.  If there are some areas that need improving, commit to making those changes now.  There’s no time like the present to get a grip on your finances. 

Sell Positions for a Tax LossYou are probably thinking to yourself, “No way!  I can’t worry about my debt in the midst of the holiday season!”  But the honest truth is that now is the best time to go on a debt diet.  All that credit card debt does indeed make your bottom line look bad and it’s hurting your financial health.  Start shedding it today.  List all your debts from the smallest to the largest.  Focus all your resources on paying off the smallest, the move to the next biggest.  Repeat until you are ready to reveal the strong, healthy, debt-free NEW YOU!   Get On a Debt Diet Today

Are there any money-losing positions and/or investments in your portfolio?  If so, you can consider selling them for a tax loss.  Just remember that there are very specific wash sale rules.  For example, if you sell a stock for a loss, you are not allowed to buy substantially identical stock or securities within 30 days.  In order to stay within compliance, I suggest that you consult with your financial advisor.  Online, you may wish to visit the SEC’s website for some specific rules on this topic.   

When I surveyed retirees for my book, “You Can Retire Sooner Than You Think” I found that one trait of the happiest retirees is that they spend at least five hours per year (and usually more) planning for retirement.  They’ve figured out the formula, which is unique for every individual, for how much money they need to have saved for retirement.   But figuring out this formula takes planning, so be sure that you dedicate the time required so that you too are a happy retiree.

Certain companies offer a matching 401(k) contribution plan.  Basically, this is free money to you, so if possible, it's best to contribute the maximum amount to your 401(k).  The threshold to qualify for your company’s matching contribution plan may differ from company to company, so it's always best to check with your Human Resources Department to see how much you need to contribute.  Try to save at least the amount that your employer will match, otherwise you are leaving money on the table. 

Take Your Minimum Distribution

Starting the year that you turn 70.5, the IRS requires that you withdrawal at least a minimum amount from your retirement account annually.  To determine what your minimum distribution is, try using this great calculator from Bankrate.

Use the Money In Your Flexible Spending Account

A flexible spending account is a special tax free account in which you can contribute money that will pay for services that your healthcare coverage doesn’t cover.  Be sure to check with your Benefits Office to find out the deadline for using the money in this account so that it doesn't go unused.  Take a look at www.healthcare.gov for additional information on the services covered by your flexible spending account. 

Have you checked any of these items off your to-do list?  Get started today to begin the new year on the right foot!