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Three Financial Planning Steps to Take Before Year-End

Three Financial Planning Steps to Take Before Year-End

September 20, 2023
As we dive into the fall season, now is a great time to tidy up your finances and prioritize for the upcoming year. Most likely, your financial situation and goals have shifted somewhat, if not significantly, over the past year and will need to be readdressed. Although taking the time to review and update (or create) your financial plan may seem cumbersome, it is crucial for establishing a successful financial future. Here are some suggestions to guide you along the way.

Budgeting & Savings

You may have had to spend more than planned over the past year. Life is full of surprises, which is why it is so important to have an emergency fund that covers at least 3-6 months of living expenses. Depending on your situation, it may be beneficial to increase your savings to 1-2 years of living expenses due to the current economic uncertainty. Review your monthly income and expenses to create a savings plan that starts with fully funding your emergency savings.

On the other hand, you may have saved additional funds. If so, now is the time to create a plan for your extra cash. Do you have any high-interest-rate debt that you could pay down, such as credit cards or student loans? If not, make sure you are maximizing your retirement contributions, as discussed in the next section. You may also consider funding a taxable investment account to create additional savings.

Also, keep in mind any charitable contributions you would like to make before the end of the year. And, recognize the holiday season will be here soon when planning your budget!

Retirement & Taxes

Determine how much you have contributed to your retirement plan and how much you can still contribute this year. Maxing out your 401(k) or IRA contributions will not only save you taxes but also help you reach your retirement goals. According to the IRS, the 2023 maximum 401(k) contribution is $22,500 with a catch-up of $7,500 if you are over the age of 50. Don’t forget to contribute to your Health Savings Account as well, if eligible! Maximum HSA contribution amounts for 2020 are $3,850 for self-only and $7,750 for families with a catch-up of $1,000 if you are over age 55.

We have faced a significant amount of stock market volatility over the last year, which may have adjusted your risk tolerance. If you were having trouble sleeping at night because of the volatility or felt that you were missing out on returns, now is a good time to reach out to your financial advisor or establish a relationship with one. It may also be a good time to realize losses in your taxable investment account (capital losses offset any capital gains and can reduce your taxable income by $3,000 each year) and rebalance your portfolio to your current risk tolerance. Another opportunity is to convert some of your traditional IRA funds to a Roth IRA. You will have to pay income tax this year, but in most cases, can withdraw your contributions and earnings tax-free after age 59 ½.

If you haven’t spoken with your CPA recently, it may be a good idea to check in and review your tax-saving strategies to make sure you are still on track. Start collecting your online statements, income records, and any other documents needed for tax filing season.

Update your family balance sheet to keep track of your progress. Don’t forget to celebrate if your net worth has increased this year!


Review your life, health, disability, and homeowner’s insurance policies so you and your family are protected.

Do you have your estate planning documents, such as a will, power of attorney, and healthcare power of attorney, completed to reflect your wishes and desires? Have any family circumstances changed this year that would suggest these documents be updated, such as a marriage, divorce, or birth of a child? Don’t forget to update your beneficiaries on your retirement accounts and life insurance policies. Remember: Your 401(k) and IRA beneficiaries override the contents of a will.

Small steps today will ensure a strong financial future that allows you to achieve your goals and dreams. As always, seek advice from your team of trusted experts when assistance is needed regarding the topics listed above. By finishing out this year with a proactive and intentional approach, you can make 2024 your best year yet!