Events that happen throughout the year can impact our financial goals, no matter how hard we plan. So, what can we do? Donna Walton, Wealth Strategist at TD Wealth®, says now is a great time to take a step back and review how your yearly finances are shaping up. Especially before the holiday rush.
The below wealth and investment planning checklist can help you end the year organized and in better financial shape.
Revisit beginning of the year goals
First things first, go back and look at the goals you set at the end of the prior year. What progress has been made regarding those goals? It’s normal for life to throw plans off course. But it’s important to take a moment and revisit those initial plans. For example, did you unexpectedly replace the furnace and take money out of an emergency account to cover those costs? See if you can replenish those funds.
If you've had some financial setbacks, maybe you need to save a little bit less and figure out how to work around that next year. Or did you receive a promotion or raise? Maybe you can set aside additional retirement savings. Course correct the best you can to keep your goals on track.
Learn about various ways to save
There are many different ways to save money for the future. And making sure you take every available opportunity is key. If you maxed out your company’s 401k account, you may still be able to open an IRA and save even more for retirement. If you have kids, it may be time to start saving for college. Or perhaps you can put away a little more for college each month than you originally intended. Make a note of all available options and strategize the best plan for your family.
Take note of big life changes
During a significant life change, such as a death in the family, divorce, birth of a new child, marriage, job change or a move, we need time to mentally readjust. But big life changes may also mean you need to revisit your finances. For example, if there is a death in the family, review your estate plan to make sure your beneficiary designations are still in line. If you got engaged or moved, you may need to increase your insurance coverage. Even if there were no significant life changes this year, comparing rates to find which insurance policy is best for you is a smart move.
Start thinking about taxes
Now is the time to make final adjustments to your yearly income or expenses which will impact your final tax liability for the year. For example, if you got married or had a child, you may want to change your withholding for the year.
Additionally, now is also a great time to review flexible spending accounts, so your funds are fully utilized. Take advantage of benefits before the year ends such as getting a new pair of glasses. Make any planned charitable donations before the end of the year. And gather all receipts now so you’re organized when it’s time to prepare your tax return.
Review your financial investments
Before the year comes to a close and everyone gets busy, sit down with your investment advisor to go over your asset allocation and review your investments. Discuss whether your risk has stayed the same and if that asset allocation is still working for you. For example, if your risk level and time horizon have changed, you may need to restructure your investment portfolio.
You can also review your total capital gains for the year. Depending on the market, you may be able to sell other assets for a loss and offset the difference to avoid an unexpected tax liability.
Or you may want to consider a Roth IRA conversion. Talk to your tax preparer about how much you may want to convert based on your specific tax situation. An additional $10 here or there could bump you into a different tax bracket.
However, as you review the end of the year, always look at the big picture and be ready to make adjustments as needed.
For more on personal finance topics
If you have more questions about personal finance topics that matter to you, visit the Learning Center on TD Bank’s website. You can find out more information about TD Bank's services at td.com
We hope you found this helpful. This article is for informational purposes only and is based on information available as of October 2024 and is subject to change. This content is not intended to be used or acted upon with respect to any client's specific circumstances. For specific advice about your unique circumstances, consider talking with your qualified professionals.
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