Your year-end financial checklist

end of year checklist

The end of the year means different things to different people as they come up with resolutions and set their intentions to improve various aspects of their lives. But there’s one thing everyone should be doing as the calendar starts moving into another January, though: take stock of your personal finances and make the necessary moves ahead of the new year. This page will walk you through what you need to do before the end of the year to get the most out of your personal finances. For additional help preparing your finances for year-end, consider working with a financial advisor to address these priorities.

1. Review your financial plan

A lot can happen in a year. You may have made a major purchase, gotten a raise, or gone on vacation. This can have a big impact on your financial plan. You should check in with your financial advisor if you have one, or find one if you don’t.

2. Rebalance your portfolio

In addition to checking your overall financial plan, you should also look at your investment portfolio to see if you could benefit from rebalancing your portfolio. This is especially true in 2022 – the market has been extremely volatile and you may need to take a look at your asset allocation. Switch money from stocks to bonds or vice versa as needed.

This is also a good time to think about whether there are any investments you’re ready to move on from or if there’s a new investment you want to consider making.

3. Think about taxes and collecting tax losses

Taxes aren’t due until April, but that doesn’t mean you can’t start thinking about your tax bill right now. One specific way to deal with taxes right now is by collecting tax losses. Tax loss collection is a process by which you can reduce your tax bill by selling stocks at a loss. It is very important that you get this process right, as there are many rules and regulations that you will need to follow, so it makes sense to work with a financial advisor on this.

4. Evaluate your charitable donations

end of year checklist

end of year checklist

Giving to charity is a good idea for a variety of reasons. First of all, it makes you feel good and it’s good for others. While these are obviously reasons enough to give to charity, the third reason may be what pushes you over the edge: You can get a tax break. Charitable contributions are tax deductable, which means you can end up owing less once you file. You have to make your deductions by the end of the year, though, to get this year’s tax deduction, so write those checks and get them in before the new year.

5. Consider your debt

The end of the year is also a good time to get your debt under control. If you received a Christmas bonus, for example, you could use it to pay off a debt, whether it’s an outstanding credit card debt or a student loan that needs to be paid off.

6. Contribute to your retirement plan

You can contribute up to $20,500 to your workplace retirement plan, such as a 401(k) in 2022. If you want to maximize your contributions for this year, you’ll need to make sure you make any contributions by the end of the year. If you’ve already maxed out your contributions for this year, the maximum contribution will rise to $22,500 in 2023.

You can also make contributions to your own personalized retirement plan, up to the $6,000 limit for 2022. However, you have a little more time on this, as you can allocate contributions for this year until tax day.

7. Consider Medicare prices

If you’re old enough to be enrolled in Medicare, you need to make sure you’re aware of the price changes coming in 2023. This is where you’ll actually save some money: The standard monthly premium for Medicare Part B will drop from $170 10 to $164.90 in 2023. That’s not exactly a windfall, but hey, it beats a price hike.

8. Watch your Social Security increase

Social Security, on the other hand, is increasing, and in a big way. Due to last year’s record inflation, the increase will be 8.7%. Be sure to take this into account when considering your budget for 2023.

9. Review your wealth plan

end of year checklist

end of year checklist

The end of the year is also a great time to review your wealth plan. There may be changes you want to make — if you’ve entered into money or bought a new home, for example, you’ll want to amend your will. You should also check the beneficiaries of all of your retirement accounts, especially if you’ve gone through a major life event like a wedding, divorce, or having a child.

The bottom line

The end of the year is the perfect time to take stock of your personal finances and make any necessary adjustments. From recovering pension contributions to charitable contributions, you have some time left to get everything in order before 2023.

Financial planning tips

  • No matter the time of year, a financial advisor can help you create and execute a financial plan. Finding a qualified financial advisor doesn’t have to be difficult. SmartAsset’s free tool matches you with up to three financial advisors serving your area, and you can interview your advisors at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you reach your financial goals, get started now.

  • If you have access to a 401(k) and haven’t opened an account yet, now might be the time to do so: Open enrollment is often near the end of the year. Make sure you set aside enough to take advantage of any employer match that is offered to you.

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The Year-End Financial Planning Checklist first appeared on the SmartAsset blog.

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