The final months of the year are a good time to evaluate your financial situation and consider moves that could provide future payoffs or savings on your 2015 tax return. Begin by reviewing where your money went this year, determining what spending could be reduced and setting savings goals for 2016.
Next, take a focused look at recent health expenses to see if another insurance plan would better suit your needs. If you’ve met your deductible, it’s a good time to schedule doctors’ appointments, procedures or surgeries you’ve been putting off. If you have a flexible spending account that doesn’t include a grace period or carry over option, be sure to use any leftover funds by the end of the year. Then evaluate other types of insurance policies. Do you have adequate life and disability coverage? An umbrella liability policy? What about long-term care?
Review your investments’ performance over the past months to decide if you need to rebalance your portfolio. If you are over 70 ½ years of age, make sure you take your required minimum distribution from your 401k or traditional IRA before year’s end to avoid paying a penalty. (Roth IRAs do not require distributions during the owner’s life.) If you’re still working, check to see if you’ve maximized contributions to your retirement accounts. Deposits to your 401k, 403b, 457 or traditional IRA may reduce this year’s IRS bill. Adding money to a Roth IRA may be a better move if you expect significant income in your retirement years.
Forecast your taxable income to see if your withholding should be increased to avoid an underpayment penalty or whether you need to come up with additional deductions. If you achieved big capital gains, you might reduce your tax liability by selling some stocks that are trading below what you paid for them (especially if you think they won’t turn around). If you plan to itemize, you might want to make extra charitable donations before the end of the year. If you are a parent or grandparent of college-bound children, consider adding to their 529 plan. Although these contributions aren’t deductible on your federal taxes, they will grow tax-deferred, and many states offer deductions or credits for them.
We are committed to helping you save and achieve your financial goals. Call your Centennial, CO registered investment advisor representative Jordan Dechtman at 303-741-9772 for a comprehensive review of your investments, insurance and expenses. You may email him at Jordan@JordanDechtman.com or visit our website www.JordanDechtman.com to schedule an appointment.
Securities America and its representatives do not provide tax advice; therefore, it is important to coordinate with your tax advisor regarding your specific situation.
Written by Securities America for distribution by Jordan Dechtman.