5 Year-End Items to Check Off Your List
Estimated reading time: 2 minutes, 41 seconds
Previously, we’ve discussed five things to consider doing before the end of the year. For many of us, details about retirement and other financial accounts are pushed to the background as we scramble to wrap up holiday shopping. But for some account holders, it’s very important to take care of certain items like those below, if they apply:
- taking your required minimum distribution (RMD)
- analyzing beneficiaries on your account(s)
- providing fair market value (FMV) information to your custodian
- updating personal information with your custodian
- considering rolling over dormant 401(k) funds into an IRA
But did you know other items may need to be addressed around this time of year? We’ll call them year-end items, but you can address them early next year, too, if need be.
Below are five year-end items you may need to check off your list.
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Max out your contributions
Did you know the IRS allows you extra time to get your contributions in? It’s true! If you are unable to maximize your contributions before the end of the year, the IRS allows you to make a contribution up to the tax deadline of the following year (excluding extensions). For example, you can apply any IRA contribution made up to April 17, 2018, to your 2017 contribution limit.
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Conduct an investment review
Is now a good time to examine your investment portfolio? Your advisor or CPA may suggest conducting an investment review of your holdings. He or she may recommend you liquidate poor performers, add better performers and so on. Are your investments positioning you for the retirement you hope for? Do you need to review certain possible tax ramifications? These are all questions that might be worth asking at year’s end. Also, remember you can log in to your Kingdom Trust account at any time to review your holdings.
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Review your savings and emergency funds
Similar to the above, you may want to analyze your emergency fund and any other savings accounts. Have you built an emergency fund that’s right for you and your family’s needs? Many recommend having funds available to cover at least 3-6 months’ worth of expenses. Have any recent life events altered the amount you may need to set aside?
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Update beneficiaries
Yes, it’s mentioned in the bulleted list above, but it’s worth re-emphasizing. Although you should always keep beneficiaries as up-to-date as possible, this time of year is a good time to ensure no life event has changed your beneficiary information. An annual review of your beneficiaries helps both you and your custodian. If you need to update your beneficiary information with Kingdom Trust, complete our Beneficiary Designation and Change Request form.
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Adjust your tax withholding
Speaking of life events, if you’ve recently married, divorced or had children, you may need to take a look at your tax withholding. You may need to adjust your W4 as a result of the significant life event. Failing to make any such adjustments could impact your tax situation negatively.
Too many of us put account details on the backburner and seldom revisit items like these until an issue arises. Often, waiting after the fact means it’s too late to change critical information or chart a new financial course. Schedule a meeting with members of your team of professionals if you feel you’re overlooking any such year-end items.