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2020 Financial Checkup

It’s hard to imagine that in just a few short months it’ll already be 2020. As we near year-end with the busy holiday season almost upon us, take this moment to check in on your finances. These last few months provide you with a great opportunity to plan ahead so that you’re not scrambling in December. Here are 4 ideas for getting started:

1.    Review your open enrollment elections

It’s all too easy to just let your employer’s open enrollment period come-and-go without checking your elections. As circumstances in your life and family change, take a moment to check your elections to ensure they’re still appropriate. Perhaps you’re not contributing enough to your HSA or have more supplemental life insurance than you really need. A few small adjustments to your benefits could result in major cost savings down the road. 

2.    Check on your annual savings goals

If you’re still working and your employer has a 401(k) plan, check to ensure you’re on track to max out your 401(k) by year-end. In 2019, you can defer up to $19,000 to your 401(k). If you’re over 50 years old, you can do an additional $6,000 catch-up contribution on top of that (for a total savings of $25,000). If you set a goal to save a certain amount to your brokerage account, IRA, Roth IRA, 529 plan, etc. then take this opportunity to make that contribution out of any cash savings that might’ve built up over the year.

3.    Touch base with your accountant

Check in with your accountant to see how you’re tracking for the year and to ensure there aren’t any surprises when you go to file your 2019 tax returns come April. Small adjustments now might help save you from a high tax bill later, like perhaps increasing your tax withholding through payroll. Alternatively, there might be tax planning opportunities if your taxable income is going to be particularly high this year, such as contributing to a Donor-Advised Fund for future charitable donations.  

4.    Complete any gifts or donations

Use this as a reminder to donate to the organizations or charities that are most important to you. They will certainly appreciate it, because you’ll help them get closer to their annual fundraising goals sooner. If you had plans to make any significant monetary gifts to friends or family, complete those gifts early this year or at least set aside those funds now so that you have flexibility for when want to make those gifts. In 2019, you can gift up to $15,000 per person without having to file a gift tax return.