Select Page

Year-end Financial Planning Checklist

With the calendar year-end fast approaching, it’s time for investment professionals to begin reminding clients of some important financial planning actions they may want to consider before the opportunities are lost.

To view the full article please register below:

    First Name (required)

    Last Name (required)

    Your Email (required)

    Year-end Financial Planning Checklist

    Year-end Financial Planning Checklist

    With the calendar year-end fast approaching, it’s time for investment professionals to begin reminding clients of some important financial planning actions they may want to consider before the opportunities are lost.

    Personal Changes

    • Ask about any events this year, or milestones expected for next year, that may change financial plans (e.g., retirement, moving, new baby).
    • Discuss threshold-age-related issues: age 50 (now eligible for catch-up contributions); 62 (make sure clients don’t begin taking reduced Social Security benefits without first discussing it with you); 65 (remind clients they need to apply for Medicare even if they are planning on beginning Social Security at age 65); and 72 (RMDs must begin).
    • Remind clients to spend any remaining balances in their Flexible Spending Accounts (FSA).
    • Determine if clients have refinanced their mortgage amid historically low rates.
    • Re-assess financial plans and objectives for a post-COVID-19 world.

    Investments

    • Re-assess a client’s risk profile in view of investment actions they may have made during the pandemic meltdown. Any year-end portfolio rebalancing may have to reflect a modified client risk profile.
    • Suggest that clients contribute to a child’s or grandchild’s 529 college savings account.
    • Review your clients’ executive compensation provisions and options.
    • Ask if they need to rebuild their emergency fund.

    Taxes

    • Harvest tax losses to offset realized gains; keep in mind the 31-day IRS wash rules.
    • Consider accelerating income into 2020, including accelerating exercise of company stock options if your client believes that income taxes will be going up in 2021; otherwise, defer income where possible.
    • Suggest clients make their January mortgage payment in December to get a deduction for 2020.
    • Recommend contributing to a Health Savings Account (HSA), if the client qualifies.
    • If a client may be subject to Alternative Minimum Tax (AMT), have your client discuss with their tax advisor before accelerating or deferring income and tax payments.
    • Any refunds from colleges on tuition and room and board, if they were paid with 529 funds, must be returned to the 529 account; otherwise, they may be subject to income taxes and penalties.

    Retirement

    • Ask for 2020 and 2021 IRA contributions.
    • Suggest clients raise their 401(k) contributions.
    • Remind clients that RMDs have been pushed back to age 72.
    • Suggest that your clients’ fund a child’s Roth account, provided the child has earned income (e.g., babysitting, dog walking).

    Estate Planning

    • Gift up to $15,000 per individual (for each spouse) federally, tax-free.
    • Discuss with clients the option of making charitable gifts of appreciated stock or other property instead of cash.
    • For clients over the age of 70 ½, discuss the benefits of making a Qualified Charitable Distribution (QCD) from their IRA.
    • Introduce the idea of a Donor-Advised Fund (DAF) for clients’ charitable donations.
    • Review beneficiary designations on all financial accounts and insurance policies.

    Be sure to reach out via your Web site, e-mail communications, newsletter and by personal phone calls to remind your clients of these key year-end planning actions and reinforce the value you bring to their financial lives.

    Please reference disclosures: https://blog.americanportfolios.com/disclosures/

    About The Author

    David Molter

     

    Vice President of New Business Development and Advisor Relations 
    631.439.4600, ext. 200 

    Subscribe

      Subscribe to receive a monthly recap of our three most popular posts.

      Recent Videos

      Loading...