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2016 End of the Year Planning

The end of the year is already upon us and you’re likely busy getting prepared for the holidays. It’s easy to let your personal finances slip to the back burner between holiday parties, visiting family & friends, and year-end deadlines.
With that in mind, here are a few things to consider regarding your finances as the year draws to a close:

  • Take your Required Minimum Distribution (RMD) prior to the December 31st If you are over age 70 ½, you are mandated by the IRS to take your RMD for all qualified retirement accounts (IRA, 401k, 403b). Note that if you are still employed, you are not required to your RMD until you retire. Roth IRAs are not subject to RMD rules. Failure to take this annual distribution may result in a 50% penalty.
  • Make a charitable contribution if you wish to claim the deduction on your 2016 taxes. If you are charitably inclined, you may consider donating highly appreciated securities, or if you’re over 70 ½, you can donate your RMD distribution tax-free.
  • If you have a Flexible Spending Account (FSA) with your company health insurance plan, be sure to use all of the funds in the account before the end of the year. Many of these plans have a use-it-or-lose-it policy.
  • Consider making a pre-tax contribution to your Health Savings Account (HSA) or an after-tax contribution to your Roth IRA. While the deadline for these contributions isn’t until April 15th of next year, it’s a great idea if you have accumulated excessive savings throughout the year (and you’ll be less likely to spend it on holiday shopping).
  • If you expect to earn more income next year, increase your contributions to your 401k or other retirement plan. Even a small increase can have a big impact on your long-term financial success.
  • Review your annual budget to see how it compares to previous years. If you don’t have a budget, consider creating one for 2017. There are tons of great resources available that will do the heavy lifting for you. Our financial planning tool for clients, Wealth360°, comes loaded with spending & budgeting capabilities to help you stay on track.

These are just a few tips to help you as we head toward the end the 2016. If you have questions regarding these or any other items related to your finances, our team is here to help. Best wishes for the holidays and we look forward to another great year in 2017.

Will Goodson

Will is a senior advisor who designs financial plans and investment strategies for clients. He is a University of Texas graduate and a CERTIFIED FINANCIAL PLANNER™ professional. Additionally, Will has obtained the National Social Security Advisor (NSSA®) designation and works closely with wealth management clients to determine the most optimal strategies for taking Social Security and Medicare. Read Will’s Profile HereRead More Articles by Will

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