Give Yourself a Year-End Financial Checkup

financial checkup

December is the time of year when most people make their New Year’s resolutions. But you don’t have to wait until 2017 to vow to review your financial situation.

Take some time to evaluate your financial position and whether any changes need to be made. Here are some items to consider:

Review Your Estate Plan

Can you name all the beneficiaries on your life insurance and financial accounts? Your situation may have changed and you now prefer someone else to be listed as a beneficiary. You can also take this time to review or establish Wills, trusts, as well as Durable Power of Attorney.

Assess Your Retirement Plan

Have you maxed out contributions to your 401(K) or IRA? If you have extra income, consider placing it in a retirement account to take advantage of their tax-deferred status. This is especially true if you’re one of the lucky ones who receives a year-end bonus. If the added income bumps you up to a higher tax bracket, you might want to forgo the new television and place the funds in your retirement account instead.

Evaluate Your Investments

Market gains and losses during the year can affect your asset allocation. If you’re near retirement and want to lower your risk exposure to your 401(k), but your portfolio is now heavily weighted with stocks, consider two options: 1) Reallocate to less volatile investment options within your plan, 2) Determine if your plan offers an “In-Service Withdrawal”. This little-known option allows you to transfer your account value (minus any company contributions) without tax or penalty to an IRA investment of your choice once you reach age 59 1/2.

Decide Who Gets Paid First

To alleviate your tax burden, you may want to pay bills early and pay yourself later. Many people pay their January mortgage payment by December 31 so they can deduct the interest from this year’s taxes. This can also be especially helpful for business owners who want to delay receiving income until after the first of the year while maximizing expenses paid for this year.

If you’ve resolved to give your finances a check-up, now is a good time to do it. But you don’t have to do it alone. Seek out expert guidance from professionals in the tax, estate planning, and wealth management fields to help you decide if you’re on the right course for the future.

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