As the year draws to a close, now is the perfect time to assess your financial health and ensure you’re on track to meet your goals. Here’s a checklist to help you finish 2024 strong:
1. Review Your Investments
Take time to evaluate your portfolio. Are your investments aligned with your long-term goals and risk tolerance? Rebalancing may be necessary if market movements have shifted your asset allocation.
2. Max Out Retirement Contributions
Before the year ends, review your contributions to retirement accounts like 401(k)s and IRAs. If possible, maximize your contributions to take full advantage of tax benefits. For 2024, you can contribute up to $22,500 to your 401(k), with an additional $7,500 for those aged 50 or older. IRAs have a limit of $6,500, with a $1,000 catch-up contribution for those 50 and over.
3. Tax-Loss Harvesting
If you have any investments that have declined in value, you can use tax-loss harvesting to sell those assets and offset capital gains elsewhere in your portfolio. This strategy can help reduce your taxable income and save you money on taxes. Just remember to be mindful of the wash-sale rule, which prevents repurchasing the same security within 30 days.
4. Organize Tax Documents
As year-end approaches, it’s a good time to start gathering tax documents and receipts. Be sure to keep records of charitable contributions, medical expenses, and business deductions if applicable. This preparation will help simplify the tax-filing process and ensure you claim all eligible deductions.
5. Review Your Estate Plan
Ensure your estate planning documents are up to date. Review your beneficiaries on retirement accounts, insurance policies, and any trusts you’ve established to confirm they reflect your current wishes.
6. Charitable Giving
Consider making charitable contributions before December 31 to take advantage of tax deductions. Donating appreciated assets like stocks can also offer additional tax benefits while supporting a cause you care about.
7. Health Savings Accounts (HSAs)
If you have a high-deductible health plan, review your HSA contributions. For 2024, you can contribute up to $4,150 for individual coverage or $8,300 for family coverage, with an additional $1,000 catch-up contribution if you're 55 or older.
8. Flexible Spending Accounts (FSAs)
Check your FSA balance and spend any remaining funds on eligible medical expenses before the deadline, as many FSAs have a “use-it-or-lose-it” policy.
Conclusion
Taking these steps now will help you finish 2024 in a strong financial position while setting the stage for a successful 2025. Regularly reviewing your financial situation and making adjustments where necessary can make a big difference in achieving your long-term goals. If you’re unsure about your next steps, don’t hesitate to reach out to your financial advisor for personalized guidance.
