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End-of-Year Financial Tips

Michael Snider

CFP®, Financial Planner


End of the year financial insight


  • While we usually associate end of the year with holiday festivities and gathering with friends and family, it’s also a good time to reflect on your financial plan so you remain on your track with your financial goals.
  • Consider six tips before year end, and start fresh with a renewed focus on obtaining your economic freedom.


This time of year, in addition to holiday festivities, it’s a good time to reflect on financial planning opportunities for the coming year. Use these tips to maximize your wealth:

  • Starting retirement or enjoying your retirement years? For retirees over age 70.5 who have an IRA or an employer-sponsored retirement account, make note to take a required minimum distribution (RMD). If you don’t take the RMD or don’t take enough, you’re subject to a 50% penalty by the IRS. Note: RMDs do not apply to Roth IRAs. You can learn more about the differences between a traditional IRA and a Roth IRA.
  • Not ready for retirement? Maximize your 401(k). If your employer offers a qualified retirement account (like a 401(k) or 403(b)), make sure to participate and start saving as much as you can to maximize your tax deductions and retirement fund growth potential. If your company offers matching contributions, don’t leave that free money on the table! Retirement plan contributions for this year can be made until April 15 of next year, but payroll deductions to your retirement accounts stop at year end. Want to learn more about maximizing your retirement savings? Listen to our podcasts What You Need to Know About Your 401(k) and Building Your Framework for Retirement
  • Use a health savings account (HSA) to boost your retirement savings. While most people may think of HSAs as short-term savings tools to self-fund current medical expenses, you can also use them as a long-term savings and investing tool. If your employer offers a health insurance plan that includes an HSA, this is another excellent way to lower your taxable income while increasing your tax-exempt contributions. Similar to 401(k) contributions, you can fund a health savings account until April 15 of the following year and have it count toward your contributions for this year. You can learn more about HSA’s triple-tax advantage.
  • Use your flexible spending account (FSA) funds before the year ends. An FSA is a type of savings account offered by employers that allows you to deduct part of your paycheck to pay for dependent care or certain qualified medical expenses. FSA contributions can also help to lower your tax liabilities since the funds are taken out pre-tax (meaning before your earnings are subject to payroll taxes). With an FSA, you have to use all the funds you have contributed into the account by the end of the plan year or you lose the money. While most plans have either a 2.5-month grace period after the end of the year, or a $500 rollover option to next year, it is good to know how much money you have left to spend, so you are not losing any of the tax-advantaged funds available to you.
  • Review (and update) your beneficiaries and trusted contacts information. The end of the year can be an excellent time to review your account beneficiary information to ensure it reflects what you would like to execute in your estate plan. Here are three instances that may require you to review and update your estate plan.

    Trusted contacts are different from beneficiaries, but an important part of keeping your assets safe. A trusted contact is someone other than an account owner who your advisor or custodian can reach out to if you are unavailable and cannot be reached. While no account information or details can be shared with your trusted contacts, they can help to relay important information to you, or your advisor, in the event that something happens that changes your ability to communicate or make decisions, or in the case of fraudulent activity. Check in with your advisors to see who they have listed as your trusted contacts and that their contact information is current.

  • Give to your heart’s content. The end of the year is also a popular time to give to your favorite charities and causes. Donations can take many forms—from donating low-cost basis stock, opening and funding a donor-advised fund to volunteering your time. If you are itemizing your tax deductions, qualified charitable donations can reduce your taxable income and help your favorite charities maximize your donation.

    The IRS also allows you to gift up to $15,000 each year to any individual who is not your spouse, without having to report the gift. If you’re looking to reduce any potential estate tax, this can be an excellent way to systemically reduce your estate value each year. However, consider keeping certain assets in your estate for the benefit of stepping-up cost basis.

We also saw a lot of big tax changes take effect beginning in 2018, and with these changes to the tax code, it’s important to know where you stand in terms of any potential tax liability. Mercer Advisors can review your tax liabilities and help you plan for potential ways to lower your taxable income before the year is over. Take a look at our 10 Tax Tips for 2019 and reach out to your advisor with any questions.


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