December Deadlines That Matter: Universal Year-End Financial Tasks

As the year draws to a close, individuals need to prioritize their year-end financial tasks. These tasks help individuals work toward financial health, prepare for the upcoming year, and meet critical deadlines that can have significant implications for their tax liabilities and financial independence. Below, we’ll delve into the essential year-end financial tasks that everyone should be aware of.

1. Tax planning and compliance

Before the year ends, take the time to review your current tax situation. This review includes compliance with the tax code, as well as identifying opportunities to maximize tax deductions and credits.

• Tax deductions and credits: Evaluate the various deductions and credits you may be eligible to take. Consider making charitable contributions or investing in tax-exempt investments before year’s end.
• Tax loss harvesting: If you have investments that have declined in value, consider selling them to offset capital gains from other investments.

2. Retirement contributions

Maximizing contributions to retirement accounts is another essential year-end financial task. If you haven’t reached your contribution limit for the year, consider making a lump-sum contribution before the deadline of December 31st.

• 401(k) and IRA Contributions: The deadline for these contributions is usually the end of the calendar year.
• Catch-up Contributions: If you’re over 50, take advantage of the opportunity to make additional “catch-up” contributions to your retirement accounts.

3. Debt management

Year-end is a good time to review one’s debt situation, which includes examining credit card debt, mortgages, student loans, and other personal loans.

• Interest rates: If you have high-interest debt, consider ways to reduce your interest payments, such as refinancing or consolidating debt.
• Payment deadlines: Missing payments can negatively impact one’s credit score and incur late fees. Ensure that all debt payments are made on time.

4. Review and adjust investments

The end of the year is a perfect time to review an investment portfolio. Consider the following:

• Rebalancing: This involves adjusting the portfolio to maintain the desired asset allocation.
• Performance review: Review how all investments have performed over the year and make any necessary adjustments.

5. Update plans for retirement

Finally, update your written retirement plan, which involves reviewing the budget, updating your financial goals, and assessing whether you’re on track toward them.

6. Review insurance policies

Year-end is an ideal time to review insurance policies for accuracy, ensuring that appropriate coverage amounts and beneficiary information are in place.

In conclusion, year-end financial tasks not only help you maintain financial health but also set a strong foundation for fiscal discipline in the upcoming year. Collaborate with financial and insurance professionals to review all financial areas and prepare to meet year-end deadlines, ensuring a smooth transition into the new year and a clear path toward your goals.

SWG4868873-1025a This information is provided as general information and is not intended to be specific financial guidance.  Before you make any decisions regarding your personal financial situation, you should consult a financial or tax professional to discuss your individual circumstances and objectives. The source(s) used to prepare this material is/are believed to be true, accurate and reliable, but is/are not guaranteed.