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Smart financial moves to make before the end of the year

Even though 2015 is coming to a close quickly there is still time to make several smart financial moves that can make a big impact on your financial situation for 2015 and beyond. There are several different aspects of your life that can be impacted with a few quick financial actions before the end of the year.
Let’s start with our investment portfolio, what are moves we should consider in this area?
Review your portfolio and individual holdings. There might be an opportunity to use losses to offset realized taxable gains.  Consult your tax advisor and investment advisor to see if you can lower your tax burden without impacting your long term financial situation.
Are there any other tax friendly financial moves that should be considered?
It starts with thinking of others. Make sure you have made all of your charitable contributions before December 31st and also don’t forget about donating items like clothing or household goods that could provide tax relief.  If you are in the estate planning mode, gifts to family members should also be part of the consideration.
Are there any moves related to saving for retirement?
There are two possible moves.  If you have additional dollars to save, consider making an additional contribution to your 401k or 403b plan. Another option is to consider opening an IRA account.  Make sure to consult your tax advisor to be certain your contribution can be tax deductible.
What about people saving for college?
The most important consideration for this group involves contributions to 529 plans.  These plans offer several advantages, one them being the potential for tax savings. Make sure you are contributing enough to get the full benefit and if you are not, consider making a one time contribution to reach the full potential.
What is an area that could have financial benefits if actions are completed before the end of the year?
One of the biggest areas is related to health care.  If you have reached your individual and family deductible maximums you might save yourself money by moving up any medical procedures or appointments into December as long as it allowed by your insurance carrier. This will save you out-of-pocket expenses if you wait to do them in 2016 because you will have to meet your deductibles again.
Should health savings account and flexible spending accounts be reviewed now?
Yes for both although the more critical one is the flexible spending account.  You will lose any money in those accounts that you don’t use by the end of the year so make sure to order an prescriptions and get new glasses before the end of the year if you funds remaining in your FSA.
What if we want to do a quick financial reality check on our spending and saving before the end of they year?
There are three very simple numbers that can help you decide if you are on track.  No more than 50% of your take home pay should be spent on essential expenses, at least 15% of your pretax income should be saved for retirement and at least 5% of your take home pay should be going to short term savings.  If you are hitting these three numbers, you are very likely making smart spending decisions.

Posted: 12/3/2015 with 0 comments

Categories: Money Matters, Planning, Taxes

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