As we approach the end of 2023, now is the perfect time to review your financial planning, track your progress and make adjustments for the year ahead. To help you get started, we’ve compiled a list of five suggestions to consider before the year comes to a close.
Review Your Investments
First up, take a look at your investments. Review your portfolio to determine if your asset allocation still makes sense. You can also consider opportunities to strategically generate losses to offset other gains through tax loss harvesting, which can reduce taxes while preserving the value of your portfolio.
Review Your Estate Plan
After you’ve reviewed your investments, turn your attention to your estate plan. While a full review is not necessary every year, a cursory review should be done annually to ensure your plan is still in line with your needs and wishes, and any new assets are titled properly. A thorough estate plan review should also be completed every three to five years or after a significant life event.
‘Tis the season of giving, and gifting to family members and friends is a popular option. You can gift recipients up to $17,000 each this year without incurring taxes. In addition, amounts gifted for use by others as tuition and medical care can be unlimited as long as the gift goes directly to the person or organization providing the educational or medical services.
Donate to Charitable Organizations
Charitable giving is another meaningful way to give this holiday season, while also providing you with a tax deduction. Consider donating appreciated stock to avoid paying capital gains on the donated stock while still receiving a tax deduction.
Manage Your Required Minimum Distributions (RMDs)
And finally, don’t forget about your Required Minimum Distributions (RMDs). While tax returns aren’t due until April 15, 2024, RMDs must be taken by December 31, 2023, unless this is your first RMD. Consider a qualified charitable distribution (QCD) to manage your RMDs from an IRA. This allows individuals 70 1/2 years old or older to donate up to $100,000 to one or more charities directly from a taxable IRA instead of taking RMDs.
By taking a proactive approach to year-end financial planning, you will be in a better position for the year ahead. These are just suggestions, and everyone’s situation is unique. If you have any questions about your planning, reach out to your FineMark advisor today.