Year End Financial Review Checklist

Year End Financial Review Checklist

October 06, 2023

Preparing for the end of the year is an important task for investors to plan for making the most of their investments and managing their finances effectively. Here are some steps that investors should consider taking as the year comes to a close:

  1. Review Your Investment Portfolio:

    • Take a close look at your investment portfolio to assess its performance throughout the year. Identify which investments have performed well and which ones have underperformed.
  2. Rebalance Your Portfolio:

    • Based on your review, consider rebalancing your portfolio. Rebalancing involves adjusting your asset allocation to maintain your desired risk level. Sell assets that have exceeded their target allocation and buy assets that are underrepresented.
  3. Tax Planning:

    • Evaluate your capital gains and losses for the year. Consider tax-efficient strategies, such as tax-loss harvesting, to offset gains and reduce your tax liability. Consult a tax professional for guidance.
  4. Maximize Retirement Contributions:

    • If you have tax-advantaged retirement accounts like a 401(k) or IRA, maximize your contributions before the year-end deadline. Contributing to these accounts can help reduce your taxable income.
  5. Take Required Minimum Distributions (RMDs):

    • If you are of the age where you are required to take RMDs from your retirement accounts (usually 72 years old for most retirement accounts), ensure that you take the required distributions to avoid penalties.
  6. Evaluate Investment Goals:

    • Review your financial goals and assess if they have changed over the year. Adjust your investment strategy if needed to align with your current objectives.
  7. Consider Tax-Efficient Investing:

    • Look into tax-efficient investment strategies, such as investing in tax-advantaged accounts or tax-efficient funds, to manage risk for the impact of taxes on your returns.
  8. Contribute to Tax-Advantaged Accounts:

    • If you haven't already, consider contributing to Health Savings Accounts (HSAs), 529 college savings plans, or other tax-advantaged accounts before the year ends.
  9. Harvest Capital Losses:

    • If you have investments with losses, consider selling them to realize capital losses that can offset capital gains. Be mindful of the wash-sale rule, which prevents you from repurchasing the same or substantially identical securities within 30 days.
  10. Review and Update Your Financial Plan:

    • Take this time to review and update your overall financial plan, including your budget, savings goals, and investment strategy, to work toward remaining on track for your long-term objectives.
  11. Consult with Financial Advisor:

    • Check in with your advisor or give us a call to schedule an appointment. Expect an email with action items on a customized, case-by-case basis if you're a client.
  12. Stay Informed:

    • Keep yourself informed about any potential changes in tax laws or investment regulations that may impact your financial situation in the upcoming year.
  13. Prepare for Next Year:

    • Start planning for the next year by setting financial goals, budgeting, and considering any changes to your investment strategy or asset allocation.