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Tips for End of Year Planning

Tips for End of Year Planning

December 14, 2022

Year-end is a great time to get your financial house in order and start planning for the new year. As you are putting away decorations or have a few days off of work to clear your head, use this time to organize your financial matters too. At our practice, Maxwell Financial Management, we recommend our clients evaluate Work and Personal financial goals to plan for the future.

Here are our tips for wrapping up the year and looking ahead to a new one:

Do the Work:

Check your flexible spending account balance, review your 401k and IRA contributions.  Are you able to put in more if you have not done the maximum for this year?  The last quarter of the year is also open enrollment period for most employers, and is the only time you’ll have to review your benefits to see if you need to add/remove anything for the new year! Many employers recognize attractive employee benefits are an important way to retain employees and keep them happy. Check to see what is new in your benefits for the new year – such as enhanced mental health benefits or other value-focused features. In a tight job market with more jobs than employees, it’s a good time to pay attention to the details and the value they bring to your overall compensation package.

Leverage Losses to your Benefit:

The stock market had many dips in 2022 and if you sold an underperforming investment this year, you may be able to take advantage of tax loss harvesting. This is a strategy designed to help minimize the amount you owe in taxes. We recommend it to help our clients optimize investments with unrealized losses in a taxable investment account or with realized gains. Tax loss harvesting helps you offset some of your losses with the gains.

If you don’t have any gains you can offset, you can also choose to use up to $3,000 in losses to offset ordinary income taxes this year. Even better, you can carry unused losses forward to future tax years too!  This only works for investments in taxable accounts, not retirement accounts like an IRA.

This strategy also depends on your tax situation and tax rate.  The higher your tax bracket the more this strategy comes into play.

Know Your Benefits:

Many working individuals have employee benefits like Health Savings Accounts (HAS) or Flexible Spending Accounts (FSA) that expire at the end of the year. You’ll lose unused funds if you don’t take advantage of them now. It’s like leaving money on the table. You may have recently signed up for benefits through the open enrollment period. Now is the time to outline what is in the plan for the coming year. Your financial advisor is a great resource to review your benefits booklet to highlight key areas that may save you money. One example is buying supplemental life insurance through your employer. Many don’t realize this is an affordable option.

Self-Employed? Empower Yourself this Year:

Recently, I met with a client who is self-employed and needed advice on long-term disability insurance, as this was previously provided by an employer. Being self-employed has many benefits, but can also be overwhelming when you first start out. As with employee benefits, schedule a meeting with your financial advisor to help you decide what you need, and to help you find a good rate. From setting up a Simplified Employee Pension Plan IRA[1] (SEP) retirement account to rolling over 401(k), it can be seamless when you have the advice you need.

Look at the Minimums:

If you turned 72 this year, you must start to take your RMD (required minimum distribution) from your Individual Retirement Account (IRA). According to[1], the IRS lets you put money into a traditional IRA and defer taxes on your contribution and any investment gains all through your career, until you reach the age of 72. The RMD rules apply also apply to employer-sponsored 401(k) and 403 (b) plans.

If you’ve planned ahead and don’t need the money, this is a great source to earmark for charitable gifting! End-of-year giving campaigns are in full swing, now is the time to start thinking about where your charitable giving will have the most impact.

Consider a Roth conversion:

Moving your retirement funds - IRA or 401(k) - to a Roth account is something to consider at year’s end. Talk with your financial advisor to determine the benefits and if they make sense for you. For one, withdrawals from Roth accounts in retirement can be made tax-free, and unlike other accounts, there are no required minimum distributions. Your advisor can help you compare the benefit: risk ratio with the conversion. You’ll pay taxes on the amount you convert, but it might be worth it for the advantages.

Get Personal

Use this time to review your spending and saving for the new year.  We recommend clients set a calendar reminder to look at their spending monthly, bi-annually or, at the very least, annually. Make sure you are reviewing all life insurance plans and your beneficiary designations on your financial and insurance accounts as well.  Don’t overlook any non-retirement accounts and be sure to add TOD (transfer on death) instructions.

Clean House

As you are cleaning out closets and making donations of unwanted household items, set aside time to clean up your financial house too. Start the new year with a plan that clearly aligns to your goals and gives you a roadmap for accomplishing them. It takes time and effort to have a tidy house and the same applies to your financial matters. While the upfront may seem daunting and you may not know where to begin, start with the basics. Pick up the broom, ask a friend for a recommendation and the next thing you know, you’ll be sweeping up with financial organization.

This can be especially important for women.  According to the U.S. Bureau of Labor Statistics (4)  more women are in the workforce than men.  But, investing levels of men vs. women vary widely.  Women have more money and more power than before and investing can help women in the fight for gender equality.  Use the year-end to meet with a financial consultant and talk about investing goals and how to work toward pursuing them. 


Katy Ufferman (ChFC) is a chartered financial consultant with Maxwell Financial Management and leads the firm’s practice dedicated to helping women with their investments and retirement planning. She’s an advocate for helping women plan for their retirement, because her firm has found although more women are providing for their families when it comes to preparing for retirement, only 10% of women feel very confident in their ability to fully retire with a comfortable lifestyle., 2017

The opinions voiced are for general information only and are not intended to provide specific advice or recommendations for any individual.

Traditional IRA account owners have considerations to make before performing a Roth IRA conversion.  These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA.  In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA.