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Year End is Approaching: Financial Management Activities to Consider Now

image | October 22, 2018
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Year End Is Approaching: Financial Management Activities to Consider Now

This year flew by. Many of us were just getting around to starting our 2018 New Year’s resolutions and now it is almost time to make them again! There are a number of year end activities in regards to financial management and I wanted to reach out and remind investors what might be potential considerations for their personal finances now, before the rush of the holidays takes over:

  • Required Minimum Distribution (RMD) - Investors age 70 ½ and up with an individual retirement account are required to take a required minimum distribution. Please note that investors of any age who have an inherited IRA account may also be required to take an RMD if the person from whom they inherited the account would be aged 70 ½ and over. Your financial advisor can help with the computation of the distribution. You may also make this process easier such as by setting up ACH on your investment account so that a direct deposit into your checking account can be made versus having to wait for a paper check to be mailed.
  • Charitable Giving - You might wish to gift cash or securities to charities to a charitable organization before year end. This might be done through a journaling process or by requesting checks be sent. This may be part of your year-end tax planning considerations (please seek tax advice from a qualified tax professional). It is important to not wait until the last minute so that there is enough time to process these requests before year-end.
  • Gifts to Loved Ones - Perhaps you want to make a gift to a child’s or grandchild’s college savings account or to a custodial account. There may be gift tax benefits to pre-funding contributions - assist you with your gift-making.
  • Converting SIMPLE Plan to 401k Plan - November 1, 2018 is the last day in 2018 in which an employer may convert a SIMPLE retirement plan to a 401k plan. In a tight labor market, having competitive retirement benefits may be one way in which to attract and retain employees.
  • Maxing Out Retirement Plan Contributions - While you have until the April 2019 tax deadline to contribute in many plans for 2018, if you receive a year-end bonus you might wish to maximize your contributions now. Discuss your retirement plans with your financial advisor to see what your options are for deferring income. This is one way to reduce your taxable income and subsequently your 2018 income tax. In 2018, you can contribute $18,500 in your 401(k) and up to $24,500 if age 50+. You can also open a Traditional IRA and contribute $5,500 or $6,500 if age 50+. Self-employed persons might consider a SIMPLE, SEP IRA, or Solo 401(k) which have generous contribution limits ($54,000 for the SEP or Solo 401(k) ).
  • Investment Account Review - Volatility has returned to the financial markets this fall and it may be prudent to consider your risk tolerance and investment allocation in alignment with your goals and objectives. Have you scheduled an account review appointment, which can be held in person or by phone?
  • Tax Strategies - Tax laws have limited the itemization of deductions for many investors in 2018. Now is a good time to consult a tax professional to see what options might be available, such as the potential to deduct some student loan interest or other strategies. You may also want to discuss with your financial advisor the potential sale of losing investments to offset taxable gains in certain non-retirement accounts.
  • Insurance - Anything can happen in the blink of an eye and helping to ensure that your loved ones are protected should you become disable or deceased is important. Reviewing your life, long term care, and disability insurance coverages as part of an overall risk management program is always in season!
  • Keeping an Eye on Budget - During the holidays, it can be tempting to sometimes spend excessively, running up credit card balances, ignoring future bills. Set a plan and stick to it for holiday spending so that you don’t wreak havoc on your finances going forward.
  • Looking Ahead to Next Year - Maintain a dialogue with your financial advisor about financial goals in the coming year (retirement, buying or selling a home, sending a child to college, making a major purchase such as a once-in-a-lifetime vacation, etc.). Having these conversations with your financial advisor can help everyone stay on the same page and plan accordingly. If you are planning to retire, considering a workplace buyout package, or other activity which can significantly impact your income, please do not wait to contact your advisor for assistance and an income projection. Will you possibly need to work in retirement to supplement your lifestyle? It’s important to know up front before making such important decisions. Remember, any time there is “money in motion” is a good time to talk to your financial advisor.



Please do not hesitate to let me know if I can be of assistance to you, your family members, friends and colleagues. I offer a complimentary first consultation.


The opinions expressed are those of the author. Seek advice from a qualified financial professional before taking any action in regard to your finances.


Todd A. Slingerland, CFP®

6 Tower Place Albany, NY 12203   (121) 876-7400 x105

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