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  • Writer's pictureErin

7 Important Year-End Financial Checklist To-Dos

Updated: Dec 4, 2023

Set yourself up for success in 2024 by taking care of a few simple tasks.

Many people feel a lot of stress toward the end of the year where their financial life is concerned, especially as the holiday season tends to mean extra expenses and a lot of important tasks to keep track of.

We're here to help! We’ll discuss the top year-end financial tasks we recommend for folks looking to make sure their transition from 2023 to 2024 is as smooth as possible. Checking a few critical items off of your year-end financial checklist can be a simple yet impactful way to feel less burdened and more prepared for the new year.

1. Stay On Top of Required Minimum Distributions

The IRS currently requires that anyone reaching or above the age of 72 during the current tax year (or anyone who reached 70 ½ before January 1, 2020) must take a Required Minumum Distribution (RMD). An RMD is a necessary distribution from a pre-tax retirement account that is calculated as a specific amount, based on total pre-tax retirement assets for an individual who has reached the magic RMD age.

Year-end rushes mean that taking RMDs from your retirement account(s) gets more difficult the closer to the end of the year we get. Don’t put it off until the last minute!

Check to see what your RMD requirement is for the current tax year if any, and make absolutely sure you’ve taken that distribution amount. If not, take care of it as soon as possible. You don’t want to be stuck hoping your RMD gets processed in time during the last week of December, and it’s not fun to deal with the tax consequences if you don’t take your RMD in time.

2. Spend Your Flex or HSA Dollars

With flex dollars that are use-or-lose, you don’t want to lose accumulated cash that could be spent paying medical bills, restocking your home medicine cabinet, or getting important health checkups for yourself or your family.

This is also a good time to review the amount of flex money you’ve used, and what you anticipate needing in the year ahead. Have a big procedure or medical expense coming up? It might be a good idea to put additional dollars into your health savings or flex savings account. Before doing so, though, be sure to check on annual limits, and know what your plan’s rules are in terms of when those dollars need to be used!

3. Tend to Your Emergency Savings

If you already have a decent amount saved — enough to cover expenses for at least a few months should something unexpected happen — then now is a good time to consider padding that out further.

If not, you’re not alone! The past few years have put financial strain on many people, which has made saving difficult. If you’re able, sock away some extra cash to help in case of emergencies. This is one of the most important things you can do to ensure you start off next year on the right foot, and that you aren’t setting yourself up for using debt as a gap-filler.

4. Double-Check Tax Withholdings

Have you experienced any life changes this year? If so, how do they affect your tax withholding? If you’re under-withholding, you may find you come up short when filing your taxes this coming April. If you’re withholding too much, you may be missing out on cash in your pocket that could be put to use now and in the coming year.

Regardless of your situation, take a few minutes to check on the withholding amounts being taken out of your paycheck. If you feel like an adjustment is needed, we can provide some resources for determining the best next steps, or a referral to a tax pro to dig in deeper into your withholding sweet spot.

Need assistance with anything we’ve discussed so far? Reach out to us! We’re happy to help.

5. Check Your Beneficiary Designations

If, as we mentioned before, you have experienced any life changes this year, you may feel the need to update the listed beneficiary or beneficiaries on any eligible accounts. The paperwork to do this is usually fairly simple, and can prevent significant legal and estate management difficulties should something happen.

If you’re looking for even more help on the estate planning front, let us know. We can offer a handful of expert attorneys who are willing and able to lend a hand.

6. Have Kids or Grandkids? Contribute to Their College Savings

Now is a good time to add money to kids’ or grandkids’ college savings accounts, especially if it can offer you any state tax savings that may help come April. Be sure to double-check contribution limits, and it may even be a good time to spot-check the investment allocation of these types of accounts.

If you don’t have college savings accounts set up but you’d like to, it’s a good idea to get in touch with a financial professional to learn which account type may be best for you and for your children or grandchildren.

7. Make Any Desired Charitable Donations

If you’ve opted to make any donations this year, make sure you get those charitable contributions set up and taken care of with plenty of time to spare before the final weeks of December. Especially if paperwork is involved — for instance, if you’re making donations straight from any investment accounts — be sure to get it taken care of as soon as possible.

Not only will this help you feel more on top of things so you can relax during the final holidays of the year, but it will also give recipient charities time to process donations correctly so they can do the same!

Additionally, if you’re planning to complete qualified charitable distributions (QCDs) to satisfy your RMD for the year, select your charities and complete the distribution forms sooner rather than later. Most financial institutions need some extra time given the increased volume of year-end activity, so don’t put it off until the last minute.

Have questions? We’re here to help!

Bonus: Consider Hiring a Professional to Help Next Year

For some, these tasks can require more and more work as their life changes and develops. A professional can help take the stress of planning your financial future off of your shoulders and help get you set up for success without you spending as much of your own time working through these steps!

People in a wide variety of financial situations use Financial Planners or Advisors to help them organize their current financial situation and develop an actionable plan for their future financial goals.

Learn more about Financial Planning to see if it may be a good fit for you.

The Bottom Line on Year-End Financial Planning

There’s so much to get done at the end of the year, but this checklist can help you set yourself up for a great financial year ahead. Take the time needed to attend to these important details, and you may just save yourself money and move closer to your financial goals!

If any of this feels overwhelming, don’t be afraid to reach out for support. We have the tools needed to give you assistance and guidance, and we’d love to help.

Please note: Cambridge does not provide tax or legal advice. Such advice should come from a tax professional or legal professional, respectively.

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