School just started, and life in the city is transitioning to the fall hustle. Soon, the leaves will fall, and winter will be on our doorstep. And in the world I live in, that is wealth management, it’s time to start year-end planning.
Our team works for clients across the US, building financial plans and investing assets, and if you want to know what we are doing now, it’s what you are about to learn.
It’s year-end planning.
You’ll see that this takes work, but realize that if you exchange your time for money in your career, you can do the same with your money.
But before I get into the guide, it’s critical to understand what year-end planning is, and why you should care.
Year-End Planning
Year-end planning includes reviewing income and expenses, optimizing taxes, trading, and updating your financial plan.
Why This Matters
Let me put it this way – the IRS will gladly take more of your money, the marketers of the world will gladly take more of your hard earned money, your insurance company isn’t going to know if you signed up for the suboptimal health plan, and your 85 year old self can’t yell back to mention what you most likely already know “invest more, you’ll thank me later!”.
Put bluntly, year end planning is about keeping more of what you make.
So with that, let’s get into your guide to year-end planning;
Planning
Review my income and expenses -yawn, sounds simple, but from my experience after doing this for a decade, it’s not. You have to know these numbers.
“How much money you earn, and spend, yearly are two of the most important numbers in your financial life.”
Find out these two numbers and take stock of them.
Get your tax plan ready-as I mentioned in last month’s column, create and start executing your tax plan. I took my advice and met with my accounting team the first week of August to get my list of to-dos. It was single most valuable meeting I’ve had this year.
Last Minute Contributions
Many of you have savings goals, many of you get year-end bonuses, many of you have 401ks take a peek at how much you’ve saved and what you have coming in the rest of the year. Does it make sense to overfund your 401k, start a Roth, or perhaps open a brokerage account, or maybe make an extra payment towards some debt?
Investment Accounts
We’ve been busy at Fjell rebalancing investment accounts for clients, given the recent market turmoil. J Reviewing your investing strategy and looking at the last time you I rebalanced your accounts is always a good idea.
Give Money Away
There are several different strategies for tax-efficiently giving your money away to charities doing amazing work in our city. Know them, weigh the pros and cons of each, and plan accordingly. I prefer Donor Advised Funds.
Benefits
Most people enroll in benefits in Q4. Look ahead and look behind. Align- ing your insurance needs with your healthcare needs is a critical financial maneuver for every American in light of rapidly increasing health- care costs. Take your time here and pick your plan wisely.
Financial Plan Review
Your advisors will make tactical decisions with you in the coming months (or they should be), but now is an interesting time for you to reflect on the year. How’d it go? Did you hit the mark? Why did it go well or poorly? What can you improve upon? These are the questions I am personally asking myself right now, and I will record my thoughts for my future self to review.
What’s nice about starting your year-end now is that it gives you three months to accomplish each. I am already well into my year-end, and the results thus far have been exactly as desired: valuable.
Best of luck.
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