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’Tis the Season (for Financial Planning)

The period between Thanksgiving and the end-of-year holiday season would seem like a sleepy time for financial planners but in fact, it is anything but!  You might be surprised at how much financial planning activity takes place on your behalf in the final month of the year.

For instance?  Even though this has been a good year in the markets, not all investments will have gained value.  This is the last opportunity to harvest any losses we find in taxable accounts by selling investments that have gone down and “booking” the loss.  Up to $3,000 of ordinary income can be offset by investment losses as well.

For people over age 70 1/2, this is the time to make sure that the required minimum distributions have been made from IRA accounts, since failing to take that money out of the tax-deferred bucket would result in an IRS penalty.  It’s also an appropriate time to prepare a tax projection to explore if a client could benefit from an additional IRA distribution beyond their required distribution to “fill up” a lower tax bracket.

Of course, we keep an eye on the various tax reform proposals and tentatively plan around them.  If we believe tax rates are going down, and particularly if itemized deductions are about to be limited, we might consider accelerating expenses into this year and deferring income, where we can, into next year’s lower brackets. Of course, we will proceed with caution until the exact details of the tax reform are enacted into law and will explore only those strategies that “do no harm” should the details be different than anticipated.

December 31st also offers the opportunity to finally get “it” done (whatever the financial planning “it” is for you) before the end of the year. The looming end of 2017 provides motivation to finish a nearly infinite variety of planning projects that were started earlier in the year (or perhaps were lingering from 2016!). Whether it’s updating estate documents, opening a college savings account, reviewing your homeowners and auto insurance, or _______________ (fill in the blank), we’re helping clients wrap up those projects now so they have something extra to celebrate come New Year’s Eve.

We hope you enjoy the holiday season and that you gain a little extra comfort knowing that we are tending a lot of issues on your behalf. And, if you are one of those folks that would like to finish a financial planning project before year end, give us a call! We’re here to help!

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