Check Out Our Year-End Checklist for Feds
- Fine-Tune Investments
- Rebalance your portfolio: Align investments with your goals and risk profile.
- Harvest capital losses: Offset gains to reduce taxable income and/or carry forward to future years.
- Harvest capital gains: Take investment gains in lower income years or to offset deductions.
- Plan for RMDs:
- Individuals aged 72+ should ensure compliance to avoid penalties.
- Consider QCDs if charitably inclined to reduce RMD burden and taxes.
- Owners of Inherited IRAs may need to take RMDs earlier than age 73+:
- 2024 is the last year that you have the option to skip your RMD under SECURE Act 2.0.
- In 2025, you must take your RMD to avoid potential IRS penalties.
- Set goals for impact investing: For those prioritizing ESG (Environmental, Social, Governance) values.
- Confirm Investment Strategy: Ensure your investments are aligned to a well vetted investment philosophy. Evaluate personal preferences in investments such as prioritizing Environmental, Social, Governance values.
- Address Debt and Cash Flow
- Tackle high-interest debt: Strategize to pay down or refinance outstanding balances.
- Review cash flow: Adjust for changes in income, expenses, or priorities.
- Set emergency fund goals: Aim for 3–6 months’ worth of expenses the funds should be in a money market, or high-yield FDIC insured savings account.
- Plan for major purchases: Such as a new car or house, and ensure you have sufficient cash on hand as pulling from investments in a down market can lock in losses.
- Evaluate Federal Benefits and Insurance
- Maximize open enrollment benefits:
- Adjust health, dental, or vision coverage to fit your family’s needs.
- Consider switching to a high deductible health plan to take advantage of a Health Savings Account. (HSA)
- Utilize Dependent Care FSAs or other workplace perks.
- Review life and disability insurance: Ensure sufficient coverage to protect dependents.
- Review Long–Term Care Insurance: Evaluate coverage amounts, types of care covered, length of coverage, premiums, and inflation protection.
- Prepare for long-term care: Consider purchasing a policy if nearing retirement.
- Use FSA and DCFSA funds prior to deadline. (2½ Months after year-end)
- Retrieve your most recent SF-50 and review for accuracy: position title, grade, step, pay plan, occupational code, tenure, service computation date, name, social security number, date of birth, etc.
These policies have exclusions and/or limitations. The cost and availability of life and Long Term Care insurance depend on factors such as age, health and the type and amount of insurance purchased. As with most financial decisions, there are expenses associated with the purchase of insurance. Life insurance policies commonly have mortality and expense charges. In addition if a policy is surrendered prematurely, there may be surrender charges and income tax implications. Guarantees are based on the claims paying ability of the insurance company.
- Enhance Estate Planning
- Review beneficiaries: Update accounts and policies for any life changes.
- Revisit wills and trusts: Make sure they reflect your current wishes.
- Utilize annual gifting limits:
- In 2024, you can gift up to $18,000 ($36,000 if married) per individual without tax implications.
- In 2025, the annual gifting limit will increase to $19,000 ($38,000 if married).
- Plan for Education and Family
- Contribute to education savings:
- Maximize contributions to 529 Plans.
- Explore employer-sponsored education benefits, if available.
- Ensure you are taking advantage of state tax deductible contributions
- Prepare for upcoming family milestones: Weddings, births, or tuition costs.
- Evaluate gifts to minor investment accounts such as UGMA and UTMA.
- Strengthen Your Financial Future
- Learn about Your Benefits: Confirm you are taking advantage of all benefits that are available and beneficial for you.
- Set retirement goals: Evaluate retirement plan progress and adjust contributions.
- Plan for transitions:
- For service members or veterans: pptimize military and/or federal pension benefits.
- Evaluate buying-back military, or peace corps time.
- Consider suspending FEHB in lieu of Tricare in retirement.
- Assess housing plans: Refinance, pay down mortgage, or prepare for a new purchase.
- Organize and Document
- Prepare for tax filing:
- Collect receipts, W-2s, 1099s, and other documents.
- Track charitable donations and deductible expenses.
- Backup financial records: Use secure tools for peace of mind.
As the year winds down, taking a proactive approach to your finances ensures you’re set up for success in the coming year. This end-of-year checklist covers a wide range of considerations—from optimizing taxes and investments to ensuring your family and future goals are protected. However, financial planning can be complex, and the best strategies are often tailored to your unique circumstances.
Conclusion
If you’re unsure about any aspect of your financial plan, don’t hesitate to reach out to trusted professionals for guidance:
- Attorneys: To review or update estate planning documents, such as wills, trusts, and power of attorney.
- Financial Planners: To align your investments, retirement plans, and overall goals with your unique needs.
- Accountants: To ensure your tax strategies are efficient and compliant with current regulations.
Remember, planning today creates confidence for tomorrow. If you need personalized support, reach out to your trusted advisors, or schedule a consultation with us at Serving Those Who Serve. Together, we’ll craft a financial plan that empowers you to focus on what matters most.
Let’s plan for your success—contact us today!
Written By: Matthew Kramer
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