1. Give to your favorite charity/charities.
Not only is this the season of giving, but giving is proven to be beneficial to your well-being. Further, charitable donations reduce your taxable income. You can also donate household items to Goodwill or Salvation Army. Just remember to get a receipt for tax purposes. If you are looking for a worthy cause, last call that I am fundraising for the International Rescue Committee on behalf of refugees devastated by war. Collectively we have raised over $700!
http://diy.rescue.org/change_for_refugees
2. Maximize your retirement accounts.
You can contribute up to $18,000, or $24,000 if you are 50 years or older to your 401(k).
3. Utilize all of the funds in your flexible spending accounts.
Remember to use all of the pretax money you set aside for health care, day care, or commuter funds. Deadlines are either year-end or March 2016. But I try to just tell myself by year-end so I don’t miss out.
4. Review recurring expenses.
Most financial advisors tell you to create a budget, but I have never in my life been able to maintain or be able to stick to a budget. Instead, I simply scroll through my credit card statement and highlight every single expense that needs to be cancelled or negotiated (cable, internet, cell phone, home security).
5. Review your will and beneficiaries.
Make sure you’ve noted the correct beneficiaries for your accounts. If you don’t have a will, this is the time to get one. If you need a referral, email me, I’ve got a good one.
6. Get a financial advisor.
I have an MBA and I still have a financial advisor! Get one. They will make sure you are on-track. If you need a referral, hit me up. Mine is awesome with no charge for a full evaluation of your financial health.
7. Review your portfolio and harvest losses.
If some of my stocks are still in the red at year-end, they are getting sold. Also evaluate how your portfolio is performing and make adjustments.
8. Review your insurance policies.
Take a good look at your car, home and life insurance policies. Compare rates and negotiate where you can. Once again, if you need a referral, I’ve got a good one who has saved me thousands of dollars across all my policies. Also, given our ages, I have been researching long-term care insurance and I’ve been told it’s just not worth it. It’s very expensive and the value is most likely not there. One strategy I read is that if you need care when you’re old and gray and you end up depleting your savings, you can look into a reverse mortgage. Because let’s face it, you can’t take your home to your grave. So that gave me some comfort. Anyone want to comment on this strategy?
9. Remind your kids you’re not paying for college.
I’m probably in the minority here, but I personally don’t want to deplete my hard-earned retirement savings to pay for exorbitant college education. I know that’s a huge risk, but I’m betting that this one’s going to pay off. I also have a strategy here which is that if Franco does want to go to college (which he’ll have to fund himself), we will retire the year prior to him submitting his financial aid application. That way he can indicate (genuinely) that his parents have zero income and he can hopefully get massive scholarships. What do you think?
What other financial end-of-the-year tasks am I missing?
You nailed it here, Catherine and thanks for the reminder of what I need to do financially speaking before this year does indeed come to a close now.
janine, it’s all easier said than done. i try to put this stuff on my blog as a reminder to myself as much as it is to readers!
As for long term care, take a look at universal life insurance policies that have a long term care rider. Then you can use the policy for either. Now the insurance isn’t throw away if you don’t use the long term care.
Also, for folks with kids and/or a house, long term care may not have as much value, but for those who don’t, may be a away to afford care you need. Even expensive insurance will be cheaper than buying a house. (Though I’d go with the combo insurance that has upfront premium as once premium paid ,you aren’t subject to premium increases)
michelle, good point about the long term care rider. i need to look into that.
#9-lol!!! Don’t blame you though. We are fiscally responsible, but I am still on the fence about life insurance! Been thinking about it for a long time but can’t decide.
cece, for life insurance, i would actually be on the fence too if i didn’t have a kid. if you plan on having kids, i would encourage you to look into it because you can lock in a lower rate the younger you are.
You’re like 1,000 times more on the ball than I am! Although I’d love to remind my kids that I’m not paying for their college.
I think we’re getting better but maybe these goals will be met next year instead.
tamara, it’s probably because when i’m at my day job i dream of retiring, so it’s incentive to figure out our financial security!
Great checklist, Catherine. I’m intrigued by your plan to retire before Franco goes to college – do you think that will work? I can’t remember if they look at parents’ savings when determining financial aid. Although we’ll be filling out the FASFA next month, so I guess I’ll find out.
You and I have differing views on paying for college, but your retirement plan wouldn’t work for us anyway. As much as Matt would love to, he can’t retire next year at the age of 45! We won’t be touching our retirement savings for college tuition though – that money is staying put.
I am also not paying for my kids’ college. If I paid my way through college as a working single mom then I do not see the sense in holding their hand through the experience. Also, I have 4 children and there’s no way I could afford to support ALL of them! I think the end-of-year donations is a great idea, especially since you can tax-deduct them.
oh so glad to hear we are on the same page, nikki! takes one to know one. paying for college builds character!