Taking Stock of Your Finances – 8 Year End Must Do’s

Posted by Denise Griffitts on Dec 9, 2008 in Internet Mastery | 0 comments

We always advise our clients to set aside some time in December to assess their financial holdings.  Following these eight steps will help you protect your future and take advantage of new tax laws that can save money, reduce anxiety and allow you to enjoy the Christmas holidays with peace of mind.

1.  Rebalance your 401K.  A good asset allocation will protect you from market ups and downs, but be sure to keep tabs on your precious nest egg.  At least once a year, make sure that your allocation percentages remain consistent with your overall plan.  Some assets or investments will invariably grow faster than others and you want to be able to shift positions if needed.

2.  Revisit your estate plan.  All business people need a last will and testament, and very likely a living will as well as health care power of attorney which directs caregivers should you become unable to make decisions for yourself.

3.  Save money — all you can! If you are employed by someone other than yourself, make contributions to your employers qualified retirement plan – at least up to the amount that your employer will match.  Invest after-tax money into a Roth IRA.

4.  Give smarter.  Important tax changes this year are likely to strain the patience of any charitable giver (and there are a lot of us!)  Beware of new legislation that limits the deductions you can claim on charitable donations.  Check with your accountant or tax attorney.

5.  Review your health plan.  If you are still participating that that old HMO or Traditional Health Plan, reevaluate your family’s health situation.  You may benefit more from a High Deductible Health Plan, along with a Health Savings Account.

6.  Clean up your taxable account. Don’t be afraid to sell your deflated stocks – you can use the capital losses to offset the taxes you owe on gains.

7.  Do a property insurance checkup.  Your home insurance might not be keeping pace with construction prices.  Many homeowners have become underinsured by not being aware of the home prices around them.

8.  Check the new credits and taxes. Before you file your tax return next spring, make sure your accountant is up to date on the most recent tax credits.