The end of the year is upon us once again, and during this time of year, it can be very beneficial to review your financial situation. With the approaching new year and tax season, it is a particularly good time to assess your financial goals, if you are still on the right track, and how you might be able to position yourself for next year better. Here are a few of the more common end-of-year financial considerations.

1.Review or create your financial plan

If you work with a financial planner or advisor, schedule an end-of-year meeting to discuss your progress and adjust strategies if necessary. Look back on the past year’s expenses. Did you stay within budget? Identify areas where you overspent or saved. Also, consider any major life events that may have happened this year, such as births, deaths, marriage, divorce, career change, or retirement.

2.Evaluate Investment Portfolio

Rebalance your portfolio if necessary. Review risk tolerances and asset allocations and make any changes that might be needed. Ensure your asset allocation still aligns with both your short- and long-term goals. 

3.Year-end tax review

Review tax loss harvesting opportunities. If any investments you own have lost money on the year, tax loss harvesting can help reduce your overall tax liability.  You may also consider charitable giving; the end of the year is a great time to make charitable donations, which may also provide tax benefits. There are several strategies that can be used to assist with minimizing your tax liability, which you should consider reviewing with a financial professional if you have questions.

4.Retirement account planning

If you haven’t already, consider contributing the maximum amount allowed to your retirement accounts, such as a 401(k) or IRA. The 2023 maximum contribution for a 401(k) is $22,500 (plus an additional $7,500 for those 50 or older), and the 2023 maximum contribution for an IRA is $6,500 (plus an additional $1,000 for those 50 or older). If you are unable to max out your contributions, at least try to contribute what you can and continue to increase the amount you contribute each year incrementally. Making small increases each year to your contribution amount will help to grow your retirement account in a manageable way without overdoing it. Don’t forget also to review your asset allocations in your retirement accounts; you’ll want to make sure you have the proper equity to fixed income ratio suitable for your goals; consult your financial advisor if needed. Additionally, make sure all your retirement accounts have up-to-date beneficiaries. 

5.Review your insurance policies

Review any existing policies you already have (including health, life, auto, and homeowners’ or renters’ insurance), and make sure the coverage is adequate for your current needs. This may include older policies that are no longer relevant or policies that are not sufficient in providing the needed coverage for your lifestyle; either way, you’ll want to be aware of what you are paying for and what it covers. Also, you will want to make sure your beneficiaries are updated on your policies.

6.Set Financial Goals for the Upcoming Year

What do you hope to achieve financially in the next year? Set clear, measurable goals. 

7.Review or create a Will

It is something few like to think about or deal with setting up, but it is a very important measure that should be taken. By creating a Will, you can ensure your assets will be distributed according to your wishes.

By taking a proactive approach to planning for your financial future, you can save yourself a lot of unneeded stress later. Remember, while this checklist serves as a guide, everyone’s financial situation is unique. This is a summary of some of the more common end-of-year financial considerations; however, it is not all-encompassing, and it is best to consult a financial professional directly for any additional information.  It is crucial to tailor your end-of-year financial activities to suit your personal and financial circumstances best.

Denis Poljak is a Managing Director and a Wealth Manager with the Poljak Group Wealth Management at Steward Partners in Shreveport, Louisiana. The information contained in this article is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be suitable for all investors as the appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives. Investing involves risks, and there is always the potential of losing money when you invest. The views expressed herein are those of the author and may not necessarily reflect the views of Steward Partners or its affiliates. Information contained herein has been obtained from sources considered to be reliable, but we do not guarantee their accuracy or completeness.  

Steward Partners Investment Solutions, LLC, Member SIPC