By Steve Kohler
One of the things I continually remind clients to do with their financial plan is to review it regularly. Lives and conditions change and it’s important to stay on top of details for items like estate planning, taxes, retirement plan contributions and insurance. Especially in the face of changing laws, regulations and policy decisions.
As 2018 approaches, there are a number of financial moves you can consider making before the end of the year. It has become second nature to have conversations with your accountant this time of year. So should it be to talk to your financial advisor.
For starters, here are some of items to consider as 2017 comes to a close.
Max out company retirement plan contributions.
Be sure to look for ways to minimize your tax liability as well as bolster your retirement savings. Considerations like increasing your 401(k) contributions up to the maximum of $18,000 ($24,000 if over 50) and how to handle a year-end bonus could make a huge difference in your end-of-year tax liability.
Reduce taxable income.
It’s been a great year for the stock market, but in a diversified portfolio you might hold investments that have incurred losses in 2017. You may consider selling a losing position in a taxable account to offset other realized gains, and therefore reduce your taxable income for the year.
Do a Roth IRA conversion.
If you want tax-free investment growth for your retirement, there may be a good argument for converting the funds from a non-deductible traditional IRA to a Roth IRA before the end of the year.
Review estate plans.
Life changes occur regularly, and if this is the case for 2017, you will want to look into the status of items like your living trust, will, and health care power of attorney. You may also want to conduct a beneficiary review of all accounts to ensure there are no changes or updates needed.
Review health insurance and your health savings account.
In addition to maxing out your 401(k) plan, you can also contribute the maximum to your health savings account (HSA) as another way to minimize tax liability. You may want to contact your health insurance agent during the annual enrollment to review your health insurance plan.
Review the pending and proposed tax legislation.
As conversations continue in Washington over tax reform, you will want to keep an eye out for any last-minute changes before year-end. You may need to react quickly, especially if any new laws are retroactive to January 2017.
So, these are just a few considerations to help you with peace of mind as we head into a new year. Who knows what lies ahead for all of us, but a review of your financial plan before the end of the year will set you up to start the New Year wisely.
Steve Kohler is Managing Director of the LifePlan 20/20® Financial Planning Services at
D. B. Root & Company, a Pittsburgh-based wealth management firm. If you would like to contact the author, Steve Kohler, please e-mail him at firstname.lastname@example.org or call 412-227-2800.
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