(Metro Creative Connection)
Can you believe it? We have just about 100 days left in the year! Time is flying by, and before we know it, we’ll be celebrating the arrival of a new year.
Making the most out of the remaining days of the year financially will serve you well in the future. The good news is if you pay attention to these tips now, you can make the transition to the new year as smooth and easy as possible.
Plan for the holidays: Ready or not, they’re coming, and they’ll wreak havoc on your finances if you don’t plan ahead. In fact, the average holiday spending in 2022 was $1,802 per person. If you haven’t been planning for this already, now is the time to start.
Assess your progress: Review your financial goals and evaluate where you stand. Are you on track to achieve what you set out to accomplish this year? Take a moment to celebrate your successes and identify areas that need attention.
Maximize retirement contributions: If you need to max out your retirement contributions, now is the time. By taking advantage of tax-advantaged accounts, you can reduce your taxable income while building a substantial nest egg. The limits on 401K contributions and IRA contributions increase each year. Make sure you are maximizing this retirement savings opportunity.
Rebalance your portfolio: As year-end approaches, ensure that your asset allocation aligns with your long-term objectives and consider rebalancing if necessary to manage risk and optimize returns.
Review insurance coverage: Life changes, and so do your insurance needs. Assess your current coverage for life, health, disability and property insurance. Make any adjustments to ensure you and your loved ones are adequately protected.
Optimize tax planning: Take advantage of available tax-saving strategies by exploring deductions, maximizing contributions and reviewing your investment strategy with tax implications in mind.
Consider a gift to family and friends: For those individuals who make significant gifts to friends and family members the annual exclusion from filing and reporting a gift tax is $17,000 per individual recipient from each gift giver. So, a couple can give $34,000 per year to a child and not have to file a gift tax return. This annual exclusion is a use-it or lose-it benefit and it resets each Jan. 1 but cannot be then taken retroactively for the prior year. Gifts beyond the $17,000 per year require a gift tax return to be filed and generally count against the lifetime estate tax exclusion. Although this will not reduce your taxes it is a great way to assist family members that has no tax consequences to either the donor or the recipient.
Get smart with capital gains: Consult a financial advisor or accountant to help determine which investments are best to sell in order to take advantage of tax-loss harvesting.
Revisit your legacy goals: You don’t need to be nearing retirement to plan for your legacy; there are things you can do at every stage of life to ensure your family is cared for. That said, if you don’t have a will, make an appointment with a trusted attorney to draw one up. If you already have one, ensure it’s up-to-date and consider a medical and financial power of attorney.
Clear financial clutter: Keep organized by tidying up your financial documents and paperwork. Consolidate accounts, shred unnecessary documents and research ways to track expenses and receipts if you haven’t already (or your current system isn’t working). Prepare a list of all accounts and who the contact is and provide this to your loved ones. This will assist them greatly if something were to happen to you.
Planning and reviewing items will help to make the most of these remaining 100 days and build a strong foundation for a successful financial future.
Paul Pahoresky is the owner of PRP & Associates. He can be reached at 440-974-1040 extension 214 or at [email protected]. Consult your tax advisor for your specific situation for additional information and guidance on these topics.