As the end of the year gets closer, it’s a good time to take a fresh look at your finances:


Have you made the retirement contributions you planned? 


Are there investment gains or losses worth reviewing? 


What about charitable giving, required minimum distributions, healthcare accounts, estate documents, or insurance coverage?


Taking a look at these areas now gives you time to make thoughtful decisions and talk with your Northbrook financial planner, along with your tax or legal professionals, before year-end deadlines arrive.
This can be especially important if you’re approaching retirement or already retired, because one financial decision can easily affect another. 
For instance: 


A retirement withdrawal may change your taxable income. 


Selling an investment could create a gain or a loss. 


A charitable gift may have implications for both your portfolio and your taxes. 


Something as simple as an outdated beneficiary designation could affect who ultimately receives an asset.


Rather than looking at each decision on its own, at Fisher Financial Group, LLC, we recommend that our clients review seven important year-end planning topics as an opportunity to step back and see how all the pieces of their financial lives work together.
Read our blog: How Can Tax Planning Help Your Retirement Last Longer?
When Should I Start Thinking About Year-End Financial Planning?
The sooner, the better. Some financial decisions take more time than others to put into place, and waiting until the last few weeks of the year can leave you feeling rushed. Starting earlier gives you more time to gather the information you need, get a clearer picture of your income for the year, and talk through your options with your financial advisor in Northbrook, as well as your tax and legal professionals.
The closer you get to the end of December, the fewer options you may have. Giving yourself a little extra time can make it easier to act on the opportunities that make sense for you. There may still be opportunities worth considering before December 31.
For example:


Want to adjust your workplace retirement contributions? You may need to make the change through payroll.


Planning to donate appreciated securities to charity? The transfer could take several business days to process.


Need to take a required minimum distribution? You’ll want to leave enough time to complete it before the applicable deadline.


Thinking about changing your insurance coverage? An application and underwriting may be required.


Have estate documents that need updating? You may need time to meet with your attorney and get everything properly prepared and signed.


What financial matters should you review before the year ends?
1. Are Your Retirement Contributions on Track? 
Review the contributions made to each of your retirement accounts during the year. These might include a 401(k), 403(b), 457 plan, traditional IRA, Roth IRA, SEP IRA, or SIMPLE IRA. 
Your objective isn't necessarily to contribute the maximum amount to every available account. A suitable contribution level depends on your income, cash reserves, employer benefits, tax situation, and retirement timeline. Questions to consider include: 


Have you contributed enough to receive the full available employer match? If your employer offers a matching contribution, consider whether you’re contributing enough to take full advantage of it.


Do your age and plan rules allow catch-up contributions? Depending on your age and retirement plan, you may be able to contribute more than the standard annual limit.


Would pre-tax or Roth contributions better complement your circumstances? Pre-tax contributions can provide a tax benefit today, while Roth contributions may offer tax-free qualified withdrawals in retirement.


Are you eligible to contribute to or deduct an IRA contribution? Your income, filing status, and participation in a workplace retirement plan can affect your IRA options and the deductibility of your contributions.


If you own a business, does your retirement plan continue to serve both you and your employees? As your business evolves, it may be worth reviewing whether your current plan still aligns with your retirement goals, workforce, and overall costs.


As a retirement planner in Northbrook, I can help you compare these choices within the context of your retirement income plan. Always consult your tax professional about contribution eligibility and potential tax consequences.
2. Should You Realize Investment Gains or Losses? 
Year-end can be a useful time to review taxable investment accounts for unrealized gains and losses. Tax-loss harvesting generally means selling an investment at a loss and applying the realized loss against eligible capital gains. Under current federal rules, some excess losses may offset a limited amount of ordinary income, while remaining losses may be carried forward. 
However, a potential tax benefit should not be the only reason to sell.
 Ask whether the investment still supports your goals, time horizon, risk tolerance, and desired portfolio allocation. If it no longer fits, realizing the loss may accompany a sound investment decision. If you still want to own the investment, be careful not to purchase the same or a substantially identical security too soon. Doing so could trigger the wash-sale rule and defer the loss.
Review activity across your household as well. Purchases in a spouse’s account, an IRA, or an automatic dividend-reinvestment program may affect the tax treatment. 
Before placing a trade, discuss the investment merits and tax implications with the appropriate professionals. Investing involves risk, and tax-loss harvesting doesn't ensure a favorable overall outcome.
3. Could a Different Charitable Giving Method Be Appropriate? 
If you plan to support a charity before year-end, consider both what you want to give and how you want to give it. Common options include:






Charitable Giving Strategy


What to Consider




Cash donations


A straightforward way to give, with the potential for a charitable deduction if you qualify and itemize.




Appreciated stocks or eligible securities


Donating investments held long term may allow you to avoid realized capital gains while potentially qualifying for a charitable deduction. 




Donor-advised fund contributions


Allows you to make a charitable contribution now and recommend grants to charities over time.




Qualified charitable distributions (QCDs)


If eligible, you can transfer funds directly from an IRA to a qualified charity, which may also count toward your required minimum distribution.




Combing several years of donations


Sometimes called “bunching,” this strategy may help you exceed the standard deduction in a particular year and make itemizing more beneficial.





4. Have You Completed Your Required Minimum Distribution? 
A required minimum distribution, commonly called an RMD, is the minimum amount many retirement account owners must withdraw annually after reaching the applicable starting age. Special rules may apply to inherited accounts.
RMD income can potentially affect:


Your federal and state income taxes


The taxation of Social Security benefits


Income-related Medicare premiums


Your available cash flow


Your charitable giving plan


Confirm which accounts are subject to an RMD and how much must be withdrawn from each. Traditional, SEP, and SIMPLE IRAs, as well as many workplace retirement plans, are generally subject to RMD rules.   
Roth IRAs generally don't require lifetime distributions from the original owner, but inherited accounts may follow different requirements. Although a custodian may calculate an estimated distribution, as the account owner, you are typically responsible for taking the correct amount. Also, verify whether withdrawals already made during the year count toward the requirement.  Don't assume a distribution from one account type can satisfy an RMD from another. 
 Aggregation rules are specific and should be reviewed carefully.
5. Will You Lose Any Unused Healthcare Funds?
Check your Flexible Spending Account or Health Savings Account before the year closes. Although FSAs and HSAs both help pay qualified healthcare expenses, they operate differently. An FSA is commonly subject to a use-it-or-lose-it provision. Your employer may allow a limited carryover or grace period, but that depends on the plan. 
Review:


Your unused balance


Eligible medical, dental, vision, and prescription expenses


Deadlines for incurring expenses


Procedures and deadlines for submitting claims 


An HSA balance generally carries forward and remains with you. If you are eligible, consider reviewing your contribution total, investments, beneficiary designation, and receipts for unreimbursed qualified medical expenses. Some people pay current healthcare expenses from other funds and retain their documentation for possible future reimbursement. Specific requirements apply, so accurate recordkeeping is important. 
Medicare enrollment, your health plan, and participation in certain other healthcare accounts can affect HSA eligibility. Confirm the rules before contributing.
6. Do Your Estate Documents Still Reflect Your Wishes?
Estate documents can become outdated even when your overall goals have not changed. Review your: 


Will


Trust documents


Financial power of attorney


Healthcare power of attorney


Medical directives


Guardianship instructions


Marriage, divorce, a new child or grandchild, a death in the family, relocation, property purchases, or a business transition may necessitate updates. Beneficiary forms require separate attention. Retirement plans, life insurance policies, annuities, and transfer-on-death accounts generally pass according to the designation on file, not necessarily according to your will.  
Verify primary and contingent beneficiaries on every applicable account. Look for missing names, outdated relationships, incorrect percentages, or beneficiaries who are no longer living. While we don’t prepare legal documents or provide legal advice, we can help you organize your financial information and identify matters to discuss with a qualified estate-planning attorney.
7. Does Your Insurance Still Match Your Life? 
Insurance coverage purchased years ago may no longer correspond to your income, assets, family responsibilities, or retirement plans. Your review might include: 


Life insurance


Disability income coverage


Homeowners and automobile insurance


Personal umbrella liability coverage


Long-term care insurance


Business and key-person coverage


Property and casualty limits


This review isn't automatically a reason to buy additional insurance. You may discover a coverage gap, but you could also find that an older policy no longer serves its original purpose. For example: 


Life insurance obtained to support young children may need to be reconsidered after they become independent. 


An umbrella policy may deserve attention if your assets have grown. 


A business owner may need to review succession arrangements or the funding of a buy-sell agreement. 


Insurance products can include premiums, fees, exclusions, surrender periods, and other restrictions. Review policy documents and consult an appropriately licensed professional before making a change. 
As an independent financial advisory firm in Northbrook, Illinois, Fisher Financial Group, LLC works with individuals and families on retirement planning, investment management, tax-aware strategies, and risk and estate-planning considerations.
If you are searching for a Northbrook retirement planner or financial advisor, consider scheduling a conversation with Fisher Financial Group, LLC. A review can help you organize your financial information, identify issues that deserve attention, and prepare informed questions for your tax, legal, and insurance professionals.
Frequently Asked Questions Related to Year-End Financial Planning
What financial tasks may need to be completed by December 31?
Workplace retirement deferrals, sales intended to realize gains or losses, certain charitable gifts, and required minimum distributions may have year-end deadlines. The exact deadline depends on the transaction, account, financial institution, and applicable rules.
Is September or October too early for a year-end financial review?
No. Starting in early fall may provide more time to collect records, estimate income, meet with your professional team, and process time-sensitive transactions.
Can a financial advisor provide tax or legal advice?
A financial advisor may help identify tax- or estate-related planning considerations, but specific tax and legal advice should come from qualified tax professionals and attorneys.
How often should beneficiary designations be checked?
An annual review is reasonable. You should also check them after marriage, divorce, a birth, a death, or a meaningful change to your estate plan.
Do I need a retirement planner if I am already retired?
Retirement planning doesn't end when you stop working. Retirees may still need to coordinate withdrawals, Social Security, Medicare costs, taxes, investments, charitable giving, and estate goals.
 
          

About the author

Dan Fisher is a Registered Financial Consultant (RFC) and Federal Retirement Consultant (FRC) who has spent more than three decades guiding retirees and pre-retirees through tax-smart investing and income planning. As the founder of Fisher Financial Group, he brings a practical approach to helping clients make informed choices about their retirement.