Financial Planning Fridays #63: Year-End Planning

As we enter the last quarter of the year, we wanted to share a few year-end financial planning strategies that we review and complete for our clients at Presilium.

First: Tax Loss Swaps. Have you taken the time to review the investments inside your taxable accounts for positions that are temporarily down? Market volatility and market downturns can provide great opportunities to capture taxable losses by completing tax loss swaps.

These losses can then be used to offset gains in the current year, and, perhaps equally as important, these losses can also be carried forward indefinitely and used to offset gains in future years, as well.

Tax Loss Swaps are also one of a few tactics that may greatly increase your overall return over time. We do this automatically for our clients but find that our new clients have rarely done this in the past.

Second: Have you taken full advantage of the opportunity to fund your retirement accounts, your IRAs and Roth IRAs, and your 529s?

These all come with various contribution limits and restrictions, which are important to know. And year-end is a great time to evaluate and re-evaluate any additional avenues to save a bit more and improve your current or future tax picture.

Third: Have you taken the full required minimum distribution from your own retirement accounts or your inherited retirement accounts?

This is important to stay on top of in order to avoid unnecessary taxes and penalties and should be completed well ahead of the December 31st deadline.

Fourth: Have you looked at converting part, or all, of your retirement accounts to a Roth IRA to allow these funds to begin to grow tax free? While tax rates are near historic lows, it is more important than ever to consider converting a portion of your retirement accounts to a Roth IRA. This is a big decision that we have discussed in detail in prior videos.

Fifth: Charitable giving. Have you considered establishing a donor-advised fund or transferring stock or cash to support the organizations that are most important to you?

If you are donating to charitable organizations, or plan to in the near future, on a regular basis, it may make sense to establish a donor-advised fund with one large lump-sum that can grow for you over time, which you can then utilize to make these donations on an ongoing basis, all the while capitalizing on one large deduction in the current year.

At Presilium, we’re hard at work on these year-end financial planning strategies for our clients. We are constantly thinking about how, what, and when we can work on to ensure that our clients have the best possible financial future. Please feel free to reach out to us if we can help you and your family with year-end planning.

Be on the lookout for our next Financial Planning Fridays episode. Subscribe to our Youtube Channel so you never miss an episode. Or contact us directly; schedule your 15-minute call with us today.