Your year-end financial checklist

The year is winding down, which means you’re likely racing the clock to meet your personal planning deadlines before it ends — and setting yourself up for the year to come.

Taxes and legislation changes will have a strong impact, but it’s important to recognize that year-end planning extends well beyond them.

To ensure you’re on track to achieve your goals for the year, it’s crucial to take a step back and review your entire financial health. Overlooking key planning items now can derail your progress toward meeting your long-term financial goals.

Here are some items you should consider as year-end approaches:

1. Review your retirement contributions

Every year, the maximum contribution limits for 401(k) plans, traditional and Roth IRAs are updated. If you’re 50 or older, remember that you’re eligible to make catch-up contributions to your 401(k) plan, and to your traditional or Roth IRAs.

If you’re not maximizing your contributions to reach these limits, take a look at your budget. There can still be a lot of options, even if you are past your peak investing years.

Do you expect any new funds to come in? If so, consider putting them toward your contributions. If you’re making Roth contributions to your 401(k) plan, it’s also a good time to regroup with your tax accountant and financial advisor to evaluate whether that’s still the most optimal strategy for your situation.

If you’re self-employed, you may consider establishing and contributing to a SEP IRA or a Solo 401(k) plan to help boost your retirement savings. These contributions can also decrease your taxable income in the tax year attributable to the contribution. If you opt for the latter, remember that Solo 401(k) plans must be established before year end. You can make employer contributions to either of these retirement vehicles until the extended due date of your tax return.

2. Consider a Roth conversion

If you’re having a low-income year, or a year with high deductions and/or net operating losses from a business, you may want to consider a Roth conversion.

The assets that are converted to your Roth IRA will be reported as income in the year of the conversion, but will be offset by deductions and/or net operating losses.

If you’re already in retirement and have started taking RMDs from your traditional or Roth IRA, consider meeting with a financial advisor to develop a strategy for managing your cash flow needs and the tax impact of your retirement withdrawals.

3. Employ tax loss harvesting

If you realized a large capital gain this year, you may consider tax-loss harvesting.
Tax-loss harvesting is an investment strategy that involves selling an investment at a loss and buying a similar, substitute investment simultaneously. Although it should be a year-round strategy, it is something that should be on your list for a year-end review.

By using this strategy, you can “lock in” an otherwise unrealized paper loss to offset gains on your tax return, but the overall composition of your investment portfolio essentially remains the same.

Through tax-loss harvesting, you can help minimize your capital gains tax liability and possibly achieve a greater after-tax investment return. Contact your investment advisor to look for these opportunities in your portfolio before year end.

4. Consider gifting appreciated assets to charities

You may want to consider gifting your appreciated securities to charities to avoid paying capital gains tax. When a charity receives these assets and sells them, they don’t have to pay capital gains tax on the realized gain — and you don’t have to either.

If you’re having a high-income year and want to ramp up your gifting, but aren’t sure which charities to support, consider establishing a donor-advised fund (DAF). With a DAF, you can take a full tax deduction in the year that you contribute and make grants from the account in any subsequent year, which gives you more time to research charitable organizations and identify which causes matter most to you.

5. Review your estate plan

Be sure to revisit your estate plan before the end of the year, especially if you’ve experienced a major life event, like marriage, divorce or the birth of a child. In these events, you should update all of your estate planning documents and review the current beneficiaries of your will and life insurance policies. In fact, you may want to consider having all of your policies reviewed to ensure the terms and coverage can still support your current goals and circumstances.

6. Build savings for the next generation

Ensuring the next generation is financially literate can make a marked difference in the preservation of your family wealth. This can take form in setting up savings plans or using tax-efficient gifting strategies.

If you’re inclined to help the next generation, annual gifts can be appreciated during your lifetime, instead of through an inheritance after your death. The annual federal gift tax exclusion allows you to make gifts of up to a certain amount to anyone without triggering gift tax. You can also use these gifts to make contributions to 529 college savings plans or retirement accounts. It’s a great way to support savings for the next generation.

7. Update your financial plan

Like most people, your goals and priorities might look different than this time last year — and that’s perfectly normal. However, as your goals change, so too should your financial plan. If you haven’t already, enlist the help of a financial advisor to put all the pieces together, assess whether your plan is still working and make adjustments accordingly.

Your year-end financial checklist


Wipfli Financial Advisors, LLC (“Wipfli Financial”) is an investment advisor registered with the U.S. Securities and Exchange Commission (SEC); however, such registration does not imply a certain level of skill or training and no inference to the contrary should be made. Wipfli Financial is a proud affiliate of Wipfli LLP, a national accounting and consulting firm. Information pertaining to Wipfli Financial’s management, operations, services, fees and conflicts of interest is set forth in Wipfli Financial’s current Form ADV Part 2A brochure and Form CRS, copies of which are available from Wipfli Financial upon request at no cost or at Wipfli Financial does not provide tax, accounting or legal services. The views expressed by the author are the author’s alone and do not necessarily represent the views of Wipfli Financial or its affiliates. The information contained in any third-party resource cited herein is not owned or controlled by Wipfli Financial, and Wipfli Financial does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Wipfli Financial of the third party or any of its content or use of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner, investment advisor, attorney or other professional.
Lora Murphy

CPA, CFP®, CDFA™ | Principal, Senior Financial Advisor

Lora Murphy, CPA, CFP®, CDFA™, is a Principal, Senior Financial Advisor with Wipfli Financial Advisors in Milwaukee and Chicago. Lora specializes in estate planning, tax planning and complex financial planning for major life transitions, including divorce and the sale of a business.

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Your year-end financial checklist

time to read: 4 min