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Do These 11 Things Before Year-End

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Your End-of-Year Financial Planning Checklist

As pumpkin-spiced lattes turn to eggnog and falling leaves turn to falling snow, it’s once again time to check in on your finances to ensure you’re on track to meet your goals moving forward. Following are 11 important financial steps to take before 2023 turns to 2024.

#1 – Review your financial plan.

Consider how any changes in your life or goals over the last year may impact your plan. Work with your wealth manager to make any necessary adjustments.

#2 – Maximize your retirement contributions.

If you’re in a position to do so, consider maxing out your 401k and IRA contributions prior to year-end. The 2023 401k contribution limit is $22,500 (plus a $7,500 catch-up contribution for those age 50 and older), and the IRA contribution limit is $6,500 (plus a $1,000 catch-up contribution for those age 50 and older).

  • If you’re unable to hit these maximums, consider increasing your retirement plan contributions by any amount you can. Even a 1% to 2% increase can make a big impact on your retirement savings over time, and you’re unlikely to even notice the impact on your take-home pay.
  • As a reminder, contributions to employer-sponsored plans must be made by December 31, and contributions to an IRA must be made by April 15, 2024.

#3 – Take steps to lower your tax liabilities.

Your wealth manager can help you identify opportunities to lower your tax bill by taking advantage of year-end tax-loss harvesting, asset location strategies, charitable giving and more.

#4 – Rebalance your investment portfolio.

If you haven’t done so in a while, now may be the time to rebalance your investments to your original (or an updated) asset allocation. This can help lock in investment gains from top sectors and ensure your portfolio remains in line with your objectives and risk tolerance.

#5 – Finalize year-end charitable donations.

A great way to lower your taxable income in a given year is through charitable donations. If your 2023 income was higher than normal, it may make sense to initiate a donor-advised fund (DAF). A DAF allows you to receive an immediate charitable tax deduction in the current year (by filing an itemized return) while having the flexibility to make donations from the DAF to your favorite charities at a later date.

  • Or you may consider using a “bunching” strategy to combine multiple years’ worth of charitable donations into one single, large donation in order to file an itemized tax return for the year in which you made the donation.
  • Your wealth manager can help you establish a tax-efficient charitable giving strategy that makes sense for your particular situation.

#6 – Review your existing insurance coverage and risk management needs.

Consider any changes in your life and financial situation that may warrant additional insurance coverage. Did you have a baby? Get married? Start a business? Get divorced? Your wealth manager can help you determine whether it makes sense to enhance your current level of coverage.

#7 – Reevaluate your healthcare coverage.

Have any changes occurred in your life or health that may necessitate a change in your healthcare coverage? If so, take advantage of your employer’s open enrollment period to make any necessary adjustments to your healthcare coverage.

  • Now’s also the time to elect any contributions you’d like to make to a health savings account (HSA) or flexible spending account (FSA).
  • Speaking of FSAs, if you have any unused funds in your FSA, make a plan to spend them on qualified medical expenses before year-end, or you risk losing them.

#8 – Check in on your emergency fund.

If you dipped into your emergency savings in 2023, now’s the time to rebuild it. We recommend maintaining three to six months of expenses in a liquid account to help cover any unexpected expenses.

#9 – Review your estate planning documents.

If you haven’t yet implemented estate planning documents, it’s important to do so immediately, regardless of your age. If it’s been a while since you reviewed your existing estate plan, schedule a call with your wealth manager and estate planning attorney to revisit your documents and ensure they remain aligned with your wishes.

#10 – Review your beneficiary designations.

Remember that beneficiary designations can supersede your will and trust directives, which is why it’s important to regularly review all designations to ensure they remain in line with your estate planning objectives.

#11 – Check your credit report.

Each of the major credit bureaus (Equifax, Experian and TransUnion) allows consumers to access one free report each year. Use this opportunity to double check your credit score and identify any unexpected errors.

Could you use some help wrapping up your 2023 finances? Creative Planning is here for you. Our experienced teams work together to help ensure your financial life is optimized and working to achieve your personal financial goals. For more information, schedule a call with a member of our team. We look forward to getting to know you!

This commentary is provided for general information purposes only, should not be construed as investment, tax or legal advice, and does not constitute an attorney/client relationship. Past performance of any market results is no assurance of future performance. The information contained herein has been obtained from sources deemed reliable but is not guaranteed.


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