2019 Year End Financial Checklist: 19 Tasks to Tackle

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The end of the year can mean different things for different people. It may be a time of reflection and relaxation. Or, perhaps a scramble as you travel across the country to visit friends and family. In either case, setting aside time to focus on your finances is a good idea, and a financial planning checklist can guide the way. 

Here’s an admittedly ambitious list. Pick and choose what makes sense for you based on your circumstances and goals, or check them all off if you’re in the overachieving mood.

1. Revisit Your Goals

Whether you’re working to pay off debt, saving for a big purchase, or planning an imminent retirement, the fourth quarter is the perfect time to solidify your financial goals for the upcoming year. 

2. Create an Annual Budget

Set yourself up for success in 2020 with an annual budget. If you’re already using budgeting software, use it to evaluate your spending over the past 12 months and discern your average monthly expenses. If not, use this time to set up a budgeting app for the new year.

3. Start a Sinking Fund

Anticipating any large, one-time purchases next year, for example home maintenance costs or holiday gifts? Consider starting a sinking fund to spread out those expenses. 

4. Use Your Windfalls Wisely

Year-end bonuses and holiday cash gifts can fly through your fingers if you don’t have a better plan for those funds. Earmark the money to replenish savings, pay off debt, or top off your retirement account. 

5. Look For Ways to Save

Research opportunities to reduce expenditures so you can re-allocate those funds to your high-priority goals. Call your internet, mobile phone, and TV service providers and try to negotiate for a lower-rate plan. Use online comparison sites to find auto and home insurance quotes that may be less than what you’re paying.

6. Make a Debt Payoff Plan 

If you’ve got high-rate credit card debt or a personal loan, make paying off that debt a priority. Research different approaches, such as the debt snowball or avalanche strategies, and consider refinancing to lower your interest rate.

7. Check Your Credit Reports

You can request a free copy of your credit report from each of the major bureaus—Equifax, Experian, and TransUnion—at least once every 12 months on AnnualCreditReport.com. Look for errors (which you can dispute) and accounts you don’t recognize (which may indicate fraud). Additionally, there are many services that will give you free access to your credit reports and credit scores throughout the year, along with notifications if there are any potentially suspicious changes. 

8. Rebalance Your Investments

Revisit your investment portfolios to ensure they’re still in line with your goals and risk tolerance (an investment tracking tool can help). Consider rebalancing if they’re not.

9. Harvest Capital Gains and Losses

Look for opportunities to harvest capital gains or losses before the end of the year. For example, selling investments at a loss can help offset capital gains you’ve realized in the same year. Work with your tax or financial advisor to figure out the best way to apply this strategy to your situation.

10. Increase Retirement Plan Contributions

Making a habit of increasing your retirement contributions by a small amount each year—even just one percent—could make a big difference in the long run. And there’s a good chance the slightly smaller paycheck won’t have much of an impact in the short term. 

11. Update Your Tax Withholdings

Use the IRS’s new tax withholding estimator to make sure your employer isn’t withholding too much (or too little) money from your paychecks. This isn’t only part of your year-end tax planning checklist, either. You’ll want to recalculate your withholdings every time there’s a change in your or your spouse’s income and after major life events. 

12. Look Into a Roth IRA Conversion

The deadline to convert a traditional IRA to a Roth IRA is December 31st, so now’s the time to consider whether this strategy might be for you. The basic idea is that you’ll pay taxes at the time of the conversion, but future withdrawals (after you turn 59 ½) will be tax-free. If you think your tax bracket will go up in the future, talk to your tax advisor ASAP.

13. Open or Add to an IRA

IRA contribution deadlines aren’t until next April, but you can take a load off your tax season plate by opening or adding to an individual retirement account (IRA) now. You may be able to reduce your taxable income for the year if you’re under the income limits.

14. Read up on Required Minimum Distributions

The deadline for taking your first IRA required minimum distribution (RMD) is April 1 of the year after you turn 70 ½, then December 31st every year after. Even if you’re not there yet, you may still need to deal with RMDs if you inherited an IRA

15. Don’t Let FSA Money Go To Waste

If you can’t spend down your Flexible Spending Account (FSA) before year-end, review your policy to find out if you’ll forfeit the funds. Some companies let employees rollover up to $500 or give them a two-and-a-half month grace period. 

16. Make Charitable Contributions

Charitable giving has long been a staple of year-end financial planning, but with the recent increase in the standard deduction, the tax benefit is limited to those who itemize their deductions. Even if you don’t fall in that camp, this is still an ideal time to donate to your favorite non-profits, many of which will run matching campaigns to take advantage of the giving season.

17. Catalog Your New Purchases

Filing an insurance claim after a theft or large disaster is going to be a lot easier if you have records of your valuable possessions. Ideally, that means creating a list of everything you own, and it’s value. Realistically, that might mean taking a video as you walk around your home and then uploading it to the cloud. 

18. Update the Beneficiaries on Your Accounts

If you haven’t reviewed the beneficiaries for your bank and brokerage accounts since opening them—or never chose beneficiaries in the first place—set aside a few minutes for a quick review. It’s a small detail that often gets overlooked, but could make things much easier for the people who you want to leave money to. 

19. Meet With Your Financial Advisor

If you work with a financial advisor, it’s a good idea to meet up in person at least annually. Year-end is a great time to do this so you can ask all the questions this checklist inspired, as well as talk about what you want to accomplish financially next year—and how your FA can help make that happen.

Bonus Task: Celebrate Your Wins!

Whether you tackled all 19 items on this year-end financial checklist, or marked off a few and called it a year, take a moment to celebrate your accomplishments and toast the end of another successful year!