Ask Dana! 8 Financial Planning Tips for Year-End

Ask Dana! 8 Financial Planning Tips for Year-End

These strategies may potentially help you save on taxes and stay on track for your financial life goals:

  1. 2023 income tax review.
    Now is the time to assess your expected 2023 taxable income. Depending on your circumstances, consider tax planning strategies that can reduce taxable income now to reduce your tax liability or increase your taxable income now if you may be looking at higher taxes in the future. End of year is a great time to consider Roth conversions, max funding for pre-tax or Roth retirement plans, and profit sharing for business owners.
  2. Investment gains/loss review.
    If you are an investor with taxable, non-retirement accounts, now is the time for assessing realized capital gains and tax loss harvesting. Even though we are mindful of this for our client’s investment accounts all year, the fourth quarter of the year is the most wonderful time of the year…to harvest gains and losses! Use this time to see how you have done with your investments and determine if you want to sell to take any gains or losses in 2023.
  3. Are you saving enough through your employer retirement plans?
    Take a moment now to check your paystub details and see how much you have saved this year. December 31 is the last day for elective contributions through your employer plans like 401(k)s or 403(b)s. For 2023, the maximum contributions are typically $22,500 if you are under 50, with a $7500 catch-up if you are over 50 (a total of $30,000).
  4. Are you a small business owner without a retirement plan?
    If the answer is yes, there may still be time to set up certain plan types. There are also new rules in the state of Connecticut that may require you to have a plan. Ask your personal advisor or tax professional what the best plan is for your business, and if you don’t have an advisor – give our team a shout, and we will be your guide!
  5. Investment review time!
    Are you positioned for the current market conditions we are seeing today? With inflation, higher interest rates, international risks, political concerns, and more, there are many things to consider when positioning a portfolio for the future. Take this as a reminder to review your allocation and see if you are where you want to be, or simply review your accounts with a qualified advisor.
  6. Feeling charitable?
    For those who make larger contributions, consider the following for the most bang for the buck: Qualified Charitable Distributions from IRAs (for those over 70.5), donating appreciated stock from taxable accounts, or clustering annual donations with donor-advised funds. This is often of interest to higher-income clients facing large tax bills.
  7. How about your estate plan?
    At TrinityPoint, we ask our clients, “What would you like to have happen with your money if something happened to you yesterday?” It is important to ensure beneficiary designations and estate documents are up-to-date and correct. Beneficiary payout rules have changed for inherited retirement accounts, and there may be possible higher tax rates down the road. It is advisable for higher net worth individuals to review their plans as soon as possible.
  8. What makes you happiest?
    As one of our partners, Michael Smiley, says in his year-end planning with clients, “What makes you happiest? Set a goal to do more of that – whatever it is – over the coming weeks, months, and year ahead!”

Please pause and take a moment to consider the important reminders above. You will find yourself feeling grateful you did.

And remember, seeking outside advice from professionals when you need it for tax, legal, or financial advice can make the overall process easier and less stressful for you. If you don’t know where to turn, don’t hesitate to contact us!

Dana R. Mascalo, CFP®, RLP®, AAMS®, C(k)P®, is a Managing Partner with TrinityPoint Wealth, an independent SEC Registered Investment Advisory firm in Milford, CT and Charlotte, NC. Dana advises high net worth clients with complex needs and is sought after by individuals, families, business owners and executives all over Connecticut and the United States. Acting as their personal CFO, Dana looks at a client’s entire financial life with a visionary lens, advising on investment portfolios, retirement planning, stock options, life transitions, exit planning for business owners, customized advanced cash-flow planning and multi-generational wealth transfer strategies.

This material presented is for informational purposes only and is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy, or investment product. TrinityPoint Wealth, nor its investment advisory representatives are permitted to provide legal or tax advice, and nothing contained in these materials should be taken as legal or tax advice.