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Year End Financial Planning Checklist

checklist at the end of the year

The end of the year means different things to different people as they make resolutions and set their intentions to improve different aspects of their lives. But there is one thing that everyone should do as the calendar starts to move towards another January – take stock of their personal finances and make the necessary moves before the new year. This page will guide you through what you need to do before the end of the year to get the most out of your personal finances.

For more help getting your finances ready for the end of the year, consider working with a financial advisor to tackle these priorities.

1. Go over your financial plan

A lot can happen in a year. You may have made a major purchase, received a raise or gone on holiday. This can have a big impact on your financial plan. You should check in with your financial advisor if you have one – or find one if you don’t.

2. Rebalance your portfolio

In addition to checking in on your overall financial plan, you should also examine your investment portfolio to see if you could benefit from rebalancing your portfolio. This is especially true in 2022 – the market has been extremely volatile and you may need to take a look at your asset allocation. Switch money from stocks to bonds or vice versa if needed.

It’s also a good time to think about whether there are any investments you’re ready to move on from – or whether there’s a new investment you want to consider making.

3. Think about taxes – and tax-loss harvesting

Tax isn’t due until April, but that doesn’t mean you can’t start thinking about your tax bill right now. One specific way you can deal with taxes right now is tax loss harvesting. Tax loss harvesting is a process by which you can reduce your tax bill by selling securities at a loss. It is very important that you get this process right as there are many rules and regulations that you must follow, so it makes sense to work with a financial advisor on this one.

4. Evaluate your charitable gift

checklist at the end of the year

checklist at the end of the year

Giving to charity is a good idea for a variety of reasons. First, it makes you feel good, and it does good for others. While those are obviously good enough reasons to give to charity, the third reason may be what pushes you over the edge – you might get a tax break. Charitable contributions are tax deductible, meaning you may end up owing less once you’ve filed. However, you must make the deductions before the end of the year to get the deduction on that year’s taxes, so write those checks and get them in before the New Year.

5. Consider your debt

The end of the year is also a good time to check in on your debt. For example, if you got a Christmas bonus, you can use it to pay off some debt, whether it’s outstanding credit card debt or a student loan that needs to be paid off.

6. Make a contribution to your pension scheme

You can contribute up to $20,500 to your workplace retirement plan, such as a 401(k), in 2022. If you want to max out your contributions for this year, make sure you make any contributions before the end of the year. If you have already maxed out your contributions for this year, the maximum contribution will go up to $22,500 in 2023.

You can also make contributions to your individualized retirement plan up to the $6,000 limit for 2022. However, you have a little extra time on this one, as you can allocate contributions for this year until tax day.

7. Consider Medicare prices

If you’re old enough to be enrolled in Medicare, make sure you know about price changes coming in 2023. This is one where you’ll actually save a bit of money—the standard monthly premium for Medicare Part B will go down from $170.10 to $164.90 in 2023. That’s not exactly a windfall, but hey – it beats a price increase.

8. Look at your Social Security increase

Social Security, on the other hand, is on the rise, and in a big way. Due to record high inflation in the past year, the increase will be 8.7%. Be sure to take that into consideration when considering your 2023 budget.

9. Review your estate plan

checklist at the end of the year

checklist at the end of the year

The end of the year is also a good time to review your estate plan. There may be changes you want to make – for example, if you’ve come into money or bought a new house, you’ll want to adjust your will. You should also check about the beneficiaries of all your retirement accounts, especially if you’ve been through a major life event like a wedding, divorce or the birth of a child.

Bottom line

The end of the year is the perfect time to take stock of your personal finances and make the adjustments that need to be made. From collecting pension contributions to making charitable contributions, you have some time left to get it all in order before 2023.

Tips for financial planning

  • Regardless of the season, a financial advisor can help you create and execute a financial plan. Finding a qualified financial advisor doesn’t have to be difficult. SmartAsset’s free tool matches you with up to three financial advisors serving your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

  • If you have access to a 401(k) and haven’t opened an account yet, it might be time to do so — open enrollment is often toward the end of the year. Be sure to put enough away to take advantage of any employer match you are offered.

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