Finish 2024 Strong: Your Year-End Financial Checklist
As we approach the end of 2024, it's the perfect time to take a step back and assess your financial situation. With the new year around the corner, now is the time to make sure you're on track to reach your financial goals—and maybe even give your financial plan a year-end boost.
To help you close out the year on a strong financial note, here’s a checklist of important actions to consider:
1. Maximize Your Retirement Contributions. If you haven’t already, now is the time to take full advantage of your retirement account contributions. For 401(k)s, the contribution limit for 2024 is $23,000, with an additional $7,500 catch-up if you're 50 or older. For IRAs, the contribution limit is $7,000, with an extra $1,000 catch-up for those over 50. These contributions help reduce your taxable income, so make sure you’re taking advantage of the full potential!
2. Review Your Investment Portfolio. As the year winds down, it’s a great time to check in on your investments. Review your asset allocation to make sure it still aligns with your long-term goals, especially if you’ve had any major life changes this year. If you’d like, we can schedule some time to discuss how your portfolio is performing and whether any adjustments are necessary.
3. Plan for Required Minimum Distributions (RMDs). If you turned 73 this year, be sure you’re on top of your Required Minimum Distributions (RMDs). Your first RMD is due by April 1, 2025, and your second by December 31, 2025. After that, RMDs must be taken by December 31 each year. However, if you’re still working and have a 401(k) or profit-sharing plan, you might be able to delay your RMDs until the year you retire—unless you own 5% or more of the business sponsoring the plan. Planning ahead will help you avoid unnecessary penalties.
4. Start Preparing for Tax Season. Tax season may seem far off, but now’s a good time to start organizing your financial documents. The more prepared you are now, the smoother the process will be when it’s time to file. And, with potential tax changes on the horizon for 2025, it’s a good idea to review any updates that might affect your situation.
5. Explore Tax-Saving Strategies. Tax planning isn’t just for April—there are strategies you can implement now to help reduce your tax liability. Consider making charitable contributions, which can be tax-deductible. If you're 70½ or older, you can transfer up to $100,000 per year from your IRA to a qualified charity tax-free as a Qualified Charitable Distribution (QCD). For those 73 or older, QCD can also satisfy your RMD for the year while lowering your taxable income.
6. Review Your Insurance Coverage. Have you reviewed your insurance policies lately? Major life events, such as marriage, the birth of a child, or purchasing a home, can often require updates to your coverage. This is a good time to ensure your policies match your current needs and offer sufficient protection.
7. Check Your Estate Plan. Estate planning is something that many people put off—but it’s essential to review your wills, trusts, and beneficiary designations regularly. With potential changes to estate tax laws on the horizon, now is a great time to ensure your plans are up to date.
Remember, financial health is a continuous process that requires regular monitoring and adjustments. If you need any help with any of the items on this checklist or have questions, don’t hesitate to reach out. We’re here to support you!
Wishing you a happy and prosperous end to 2024!
