Five Year-End Financial Planning Tips

November 25, 2020

The end of the year is known for its holidays, parties, and family gatherings ‑ while the holidays will likely look a bit different in 2020, this is still the perfect time to evaluate your financial goals and prepare yourself for the coming year. The goal behind end of the year financial planning is to formulate a plan for any unforeseen circumstances that could be looming on the horizon.

Here are five tips to get your moving in the right direction.


1. Boost Contributions

Whether it is a Roth IRA, a 401(k), or any other type of retirement savings, you may want to consider maxing out your contributions to these accounts. The end of the year is an excellent time to review your monthly contributions to any retirement accounts and determine if your monthly contributions are enough to hit the federally allowed limit for the coming year. Check your credit union's rates for products that could help you meet your retirement goals.


2. Time to Re-evaluate Estate Planning Documents

The end of the year is a perfect time to think about your family, should the worst happen. Decide what would happen to your home, finances, and other assets, so your family or the estate executor doesn't have to make these critical decisions without you. Get a will and appropriate life insurance to care for your loved ones. While nobody likes to think about the inevitable, to have your estate in order is one of the kindest acts of love you can leave for those you care about the most.

Should you have all these estate planning documents in place, the end of the year is an excellent opportunity to evaluate your estate's beneficiaries.


3. Meet with Tax Advisor

This year, you may have changed jobs, adjusted your portfolio, or made some significant purchases or charitable donations. Meeting with your tax advisor to determine what your tax bill might be in April will give you plenty of time to save for the amount due to the IRS or give you some peace of mind when it is time to file your taxes.


4. Review of Insurance Policies

Look at your life, homeowner's and health insurance, as well as your long-term care insurance. Your insurance policies could be expiring soon or may no longer fit your lifestyle choices. Review your policy coverages to determine if they still fit your needs. The end of the year could be your chance to shop around for insurance policies, find discounts, or bundle policies together.


5. Cut Expenses

Gauge your expenses over the previous year to determine what you can cut. While you should be completing a budget every month, the end of the year is ideal for determining if you can drop subscription boxes, monthly magazines or other auto payments such as gym memberships and cable TV.