facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast blog search brokercheck brokercheck
%POST_TITLE% Thumbnail

Have you met your financial goals for 2019?

Investment Retirement Funding Insights Tax

It is hard to believe, but it is almost the end of 2019.  As you look back on your financial goals for this year, are there some things that you can still do to improve your financial situation?  Here is an end of the year checklist

  • Contribute the maximum to your 401K.  The annual contribution limit in 2019 is $19,000, but there is also a catch up contribution allowed for those over the age of 50 in the amount of $6,000.  If you are anticipating a bonus before year end, you can designate a larger portion of the bonus to be allocated to the 401K contribution to meet your limit for 2019.  This will help to reduce your taxable income, and to bolster your retirement savings
  • Sell the losing position in your taxable accounts to offset any anticipated capital gains.  The maximum capital loss that can be deducted is $3,000 in 2019, but if you review your investment statements and see that you will have realized capital gains this year, you can offset these with capital losses.
  • Review your RMD requirements for this year.  Even if you are not at an age where you are required to take RMD's, you may have inherited IRA's that require RMD's.  These distributions need to be taken prior to December 31.
  • Determine if Roth conversions make sense.  If your income has dropped significantly this year, and you make more than the minimum required for regular Roth contributions, you can still contribute to a non deductible IRA and convert this to a Roth IRA.  You have to pay taxes on the conversion, but if your income is lower this year, it may make sense to fill up your tax bracket with the income that will be recognized from the Roth conversion if it does not result in bumping you up to the next highest tax bracket.
  • Review your estate plan.  Make sure that all beneficiaries are updated, and if you do not have the necessary estate documents in place, make an appointment with an estate planning attorney to determine what is needed to protect your estate.
  • If you are planning on donating to charity and have appreciated stock, use that in lieu of a cash donation to avoid paying the capital gains tax on the transaction.  If you are in the highest income bracket, this can save 20% on the capital gain and 3.8% on the net investment income tax for a total savings of almost 24%.
  • Re-balance your portfolio.  If you have not made any changes to your portfolio allocation the entire year, it is a good time to look at your allocation and re-balance due to changes in the market that have occurred since the last time you updated your allocation.
  • Determine if your federal and state tax withholding is sufficient to pay your tax liability for 2019.  If you fall short, you can increase your withholding rate for your remaining paychecks.

It is a good time to contact your financial adviser to make sure that you are taking advantage of all strategies to reduce your taxable income and achieve your financial goals that you set earlier this year.


About the Author

Patti Hughes is a Chicago Fee-Only Financial Planner.  Lake Life Wealth Advisory Group provides comprehensive and objective financial planning, retirement planning, and investment management to help clients organize, grow and protect their assets through life’s transitions.  She is a fiduciary, and does not sell products or earn commissions, so she truly acts in the best interests of her clients.