10 Financial Tasks To Complete Before 2020

(Yes, You Still Have Time)

Here we are, already to the end of 2019! The end of a year and the start of a new one is when most people decide to clean up and implement changes in some areas of their lives. Whether it is financial or health-related, starting the New Year off with tasks completed feels good! Here are ten things to complete before 2020 that can make a difference to you now, and later:

Task #1- Increase Retirement Savings Contributions: Increasing or maximizing your pre-tax and after-tax retirement savings contributions helps in two ways; first, it helps to ensure you will have more money in retirement. Second, contributions into pre-tax retirement savings accounts help to lower your taxable income in the year the contributions made.

Task #2- Take your Losses: If you decide to sell losing assets before 2020, you may be able to use those losses to offset your taxable capital gains. Make sure to consult your tax professional to understand if tax-loss harvesting will benefit you or not.

Task #3- Consider Converting to a Roth IRA: Since contributions and earnings in a Roth IRA grow tax-free, converting your tax-deferred retirement savings into a Roth may make sense for you. Although you are required to pay taxes on the entire contributions and earnings, the conversion in 2019 may be a tax-smart move in the long term.

Task #4- Prepare for 2019 Tax Reporting: You don’t need to wait until 2020 to meet with your tax professional. Having an idea of how much you may need to pay in taxes for 2019 can benefit you when you still have time to contribute to tax-sheltered investment accounts opened by December 31st, 2019, to off-set personal income and capital gains. Especially if you’ve made more money in 2019 than in previous years, having an idea of taxes due in the 4th quarter and pre-paying taxes can save you stress later.

Task #5- Evaluate Health Savings Account (HSA) Contributions: HSAs allow pre-tax contributions, much like your pre-tax retirement savings. However, when used at a later date for health-related expenses, including future long-term care expenses, the contributions and accumulation are tax-free upon withdraw. Make sure you are maximizing your contributions to enjoy the benefits of using the account later and lowering your taxable income for 2019!

Task #6- Contribute to your Children’s or Grandchildren’s 529 College Savings Plan: Many states offer a state income tax credit or deduction up to a certain amount for parents or grandparents that contribute.

Task #7- Rebalance, Rebalance, and Rebalance: Market swings cause portfolio allocations to change over time. The end of the year is a great time to rebalance all of your investment accounts.

Task #8- Spread Your Wealth to Benefit Non-Profits: Donor Advised Funds allow you to deduct your contributions to a non-profit. Due to the Tax Cuts and Jobs Act, contributions must be made into a donor-advised fund in 2019 to be itemized and deducted on your 2019 tax return.

Task #9- Check and Update Beneficiaries: Check and update beneficiary information on your employer retirement plan and all life insurance policies. Has there been a marriage, divorce, or name change for any beneficiary? Keeping beneficiary information and your information current is essential to help avoid problems later if there is a death claim.

Task #10- Schedule Your Annual Review for 2020: The beginning of a new year is a great time to schedule an annual investment review, complete or update your financial plan.

If you have questions regarding any of the above, contact our office to complete these before we say goodbye to 2019 and welcome 2020!

*Advisory services offered through Trajan Wealth, L.L.C., an SEC-registered investment adviser. 

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