Making a List, Checking It Twice?

With kids making lists to Santa, now is the time to double-check your list of investing and savings to-do’s before year end. Procrastinate for New Year’s resolutions to act, these opportunities will have passed.

Last minute maximizing of 401(k), 403(b) and 457 plan contributions. Ideally, you’d be on schedule to meet the $18,500 maximum contributions limits ($24,500 if you’re 50 or older). We don’t live in ideal worlds, however you can act to make a final push. How? Many plans allow online changes to percentage of wage deductions on their website. Have a year end bonus? Can forgo a paycheck? You must act quickly as most plans require a pay cycle for update to take effect.

Required minimum distributions (RMDs). Not just for the age 70 ½ crowd. If you inherited an IRA from a non-spouse, you must begin taking RMDs in the year after the year of death of the original owner. If you wait until you can get around to it, the IRS imposes a penalty of 50% for missed deadline. Meaning miss taking a $5,000 RMD, you’ll be writing the IRS a check for $2,500.

Rebalance and lower taxable income. Portfolios need review. In taxable accounts through rebalancing and selling losing positions, you may be able to offset realized gains as well as write off up to $3,000 against ordinary income.

Roth Conversion. Be careful here. Unlike past years were you could adjust or completely undo at tax time via “recharacterization”, Congress eliminated this option. Now once you convert, that is your final answer. Certain financial planners have tools to incorporate your projected tax situation with proposed conversion amounts to illustrate impact to your tax liability.   

New Year’s resolutions look familiar?  If resolutions for your finances are from last year, maybe it’s time for professional support and an accountability partner. Mookie Betts didn’t win the MVP training, eating and learning where to improve on his own.

May you and those closest to you enjoy a happy and safe holiday season.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Glenn Brown is a Holliston resident and owner of PlanDynamic, LLC, Glenn is a Certified Financial Planner™, Chartered Retirement Planning Counselor and fee-only fiduciary helping families, business owners and Sandwichers evolve their financial independence.

This article appeared in the December 2018 editions of Holliston Local Town Pages and Ashland Local Town Pages.

Please call me at (508) 834-7733 or directly schedule a meeting to learn more about investing, retirement savings and tax planning.

PlanDynamic, LLC is a registered investment advisor. This article is intended to provide general information. It is not intended to offer or deliver investment advice in any way. Information regarding investment services are provided solely to gain a better understanding of the subject or the article. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy will be profitable.

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