As the end of the year approaches, our thoughts naturally turn to holiday plans and shopping lists. It is also the perfect time to go through the Nepsis Year-End Checklist. In fact, some items are highly time sensitive, and it is vital you check them before December 31st.
Life is a journey, and every journey requires checking the map from time to time. A well-crafted financial plan must also include a consistent review routine. Our goal at Nepsis is to help guide your journey. So as the year starts to come to an end, let’s start by going over The Big Picture, Employee Benefits and Retirement Planning.
THE BIG PICTURE
- Review Your Plan – Are your financial and investment objectives still consistent with your desires? Take time to evaluate your goals in light of your highest priorities, and then update your written financial plan as appropriate.
- Consider Transitions – Did you experience any significant transitions this year, such as change of employment, marriage, divorce, birth of a child, retirement, or death in the family? Do you anticipate any of these in the coming year? Be sure to incorporate these changes into your plan.
EMPLOYEE BENEFITS
- Review Your 401(k) – Review your contribution percentage to ensure you are putting in enough to get your full employer match. Also evaluate whether you can increase your contribution.
- Open Enrollment – Review your health insurance coverage options and make changes, as appropriate. Many employer-based health insurance plans have open enrollment toward the end of the year, while Medicare open enrollment starts Oct. 15th, and the Health Insurance Marketplace open enrollment starts Nov. 1st.
Source: www.medicare.gov ; www.healthcare.gov/quick-guide/dates-and-deadlines/
- Use Flexible Spending Dollars – Unused funds in a Flexible Spending Account (FSA) are typically forfeited at the end of the year. Use any remaining funds on eligible health and medical expenses. As it can take time to get scheduled for healthcare appointments, you should plan now for any doctor visits or procedures to occur before year-end.
RETIREMENT PLANNING
- RMDs – Beginning in 2023, you must begin taking Required Minimum Distributions from IRAs and tax-deferred retirement plans at age 73. RMDs must be completed by December 31st. (If you turn 73 in 2023, you were 72 in 2022 and subject to RMDs under the prior rule of age 72. Your first RMD was due by April 1, 2023, and your second RMD is due by December 31, 2023.)
Source: https://www.irs.gov/retirement-plans/retirement-plan-and-ira-required-minimum-distributions-faqs
- Consider QCDs – Taxpayers 70 ½ and older can utilize Qualified Charitable Distributions from IRAs to make a donation to charity. This provides a tax advantage where the QCD is not included in your taxable income, but still counts toward satisfying your RMD if you are age 73 or older.
- Consider Roth IRA Conversions – Roth conversions are a great tool for diversifying the tax treatment of your retirement portfolio, as well as creating income tax-free inheritance. This can be especially effective when you have pre-tax retirement dollars you do not anticipate fully spending. Roth conversions are taxable, so review your tax bracket to determine the optimal conversion amount.
Join us next week when we go over Part 2 of our Nepsis Year-End Checklist! We will be covering year-end Tax Planning, Giving Strategies and Estate and Legacy Planning. If you need help with your planning, reach out to a Nepsis Advisor.
Advisory services offered through Nepsis, Inc.: An SEC Registered Investment Advisor.
DISCLOSURE: This checklist contains general suggestions related to your overall financial plan; however, you should consult with your tax professional and/or attorney regarding the implementation of any strategy pertaining to your specific situation.