Year-End Personal Finance Checklist

December 13, 2017 | Paul R. Ruedi CFP®
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Looking for a year-end personal finance checklist?  Below is a list of things you may want to consider before the year is over.  I divided the list into 6 main categories:

1)      Investments

2)      Retirement Accounts

3)      Tax

4)      Insurance

5)      Estate Planning

6)      Financial Planning

Keep in mind, not all of these to-do items will apply to your particular situation.  You should always talk to a financial advisor, CPA/tax professional, attorney, or other financial professional before acting on anything on this list.



Review Asset Allocation

Check your mix of stocks vs. bonds.  Perhaps your allocation has drifted from its target over time.  Is it still aligned with your goals?

Review Asset Location

Are you holding your various investments in the most appropriate accounts?  Can you make changes regarding which investments you hold in different types of accounts to save on taxes?

Rebalance Portfolio

If the various investments in your portfolio have drifted materially from their target weights, you may want to buy or sell to bring that portfolio back towards its target allocation.

Consolidate Accounts

Have you collected redundant accounts over the years?  Now may be a good time to consolidate them and make your life much simpler.

Sell at a loss to offset gains

If you have sold investments this year for a higher value than you purchased them for and will have a tax liability because of it, you may want to sell investments that have experienced losses in order to offset those gains for tax purposes.  If you plan to do this, make sure to sell those investments in time for the trades to settle before the end of the year.

Watch out for capital gains distributions

Mutual funds typically pay out capital gains in the month of December, so investors need to be careful they are not buying into a tax liability when purchasing mutual fund shares this month.  If you buy shares of a mutual fund on or before what's known as the ex-dividend date, you are entitled to your share of the capital gains distributions that are paid out and will have to pay taxes on them.  If you plan to buy shares of mutual funds in December, you may want to make sure it is on the ex-dividend date or later.


Retirement Accounts

Contribute to a Traditional IRA

If you do not have a 401k or retirement plan at work, you can still reduce your taxable income by contributing to a Traditional IRA.  You can contribute a maximum of $5,500 per year, and if you are 50 or older can contribute an additional $1,000 catch up amount for a total of $6,500.

Contribute to a Roth IRA

Contributing to a Roth won’t lower your tax bill, but it will allow any funds you invest to grow tax-deferred and ultimately be withdrawn tax-free if you follow all the rules and withdraw funds when you are old enough to retire.

Contribute to a SEP-IRA if you are self-employed

Self-employed individuals can contribute the lesser of 25% of eligible income or $54,000 to a SEP-IRA in 2017.

Review savings rate in retirement accounts

Can you boost your 401k contribution without materially impacting your lifestyle?  Some employers' plans even do this automatically so make sure to stay up to date on how much you are actually saving.

Increase contributions to retirement accounts

You can reduce your adjusted gross income by contributing up to $18,000 to a 401k for 2017.  If you’re 50 or older, you can also take advantage of catch up contributions and contribute an extra $6,000 for a total of $24,000.

Contribute to a taxable brokerage account if you plan to retire early

If you plan to retire early you may have trouble accessing the money in your tax-advantaged accounts before certain ages without paying taxes and penalties.  For this reason, you may want to think about opening and contributing to a regular taxable brokerage account.

Take out your required minimum distributions if necessary

The deadline to take out required minimum distributions (RMD’s) for the year is December 30.  The one exception to this is if you turned 70 1/2 this year, in which case you have until April 1 of next year to take it.  The penalty for forgetting to take RMD’s is steep – 50% of the amount you were supposed to take out.



Gather all tax-related documents

I realize there are limitations to this since a lot of employers don’t give their employees their tax documents until early next year, but it never hurts to be as organized as possible to make your life easier when it comes time to pay taxes.

Sell appreciated assets to take advantage of low tax rates

If you are temporarily in a low tax bracket and eligible for the 0% or 5% tax rate on capital gains, you may want to sell appreciated assets to take advantage of the lower capital gains rates.

Gift appreciated assets to those in lower tax brackets

Giving appreciated assets to people in lower tax brackets can allow you to reduce or eliminate taxes on the gains and remove the asset from your estate.

Give gifts up to $14,000 to take advantage of your yearly exemption

You can give someone up to $14,000 per year and it won’t impact your lifetime estate tax exemption amount.  Couples can double this amount to $28,000 if they file for joint gifting.

Make charitable donations

Only the amount you contribute to charity this year is deductible on this year’s tax return.  A pledge to give in the future does not count, only actual contributions.  If you plan to itemize deductions and want to lower your tax bill this year by giving to charity, make sure you do so before the end of the year.

Set up a Donor-Advised Fund

Donor-advised funds enable you to contribute money now and receive the tax benefits of doing so this year, but allow you to wait to donate the proceeds to charity at a later date.

Prepay 2018 expenses 

You may want to consider prepaying mortgage (pay January’s payment in December) or property tax payments if you want to take advantage of deductions this year instead of next.



Review your insurance policies

Check your various policies.  Is your amount of coverage still adequate?  Maybe you need increased coverage, or on the other hand could be comfortable with less coverage.

Review beneficiaries

Has anything in your personal situation changed that would create a need to update the beneficiaries on your various insurance policies?

Contribute to a Health Savings Account (HSA)

If you have a high-deductible health insurance plan, you may be able to take advantage of the tax benefits of HSA’s.  Contributions to HSA’s reduce your taxable income, and withdrawals are tax-free if they are used to pay for qualifying medical expenses.

Use up your Flexible Spending Account (FSA) balance

Like HSA’s, FSA’s allow you to contribute pre-tax dollars and spend the proceeds tax-free on health care expenses.  However, with FSA’s you must “use or lose” most or all of your contributions each year.  Remember to schedule any last minute appointments for this year to make sure you use up any FSA balance you will otherwise lose.


Estate Planning

Review Will

The end of the year may be a good time to review your will to make sure your will still accurately represents your wishes.  If you don’t have a will, make sure you get one as soon as possible.

Consider establishing a trust

Trusts can make sure assets are managed and distributed according to your wishes without going through probate.

Check beneficiaries and ownership

Check your beneficiaries on your life insurance policy, retirement accounts, trusts, and anything else that will ultimately pass on to your heirs.  You may also want to check the ownership type of different accounts and assets to make sure they transfer to who you want them to.

Review or establish Health Care Directives

Formally establishing your wishes for how you would like to be taken care of in the event of your incapacity can save your family from a lot of very difficult decisions and guessing what your wishes would have been.  Health care directives come in the form of a living will and power of attorney for health care, and allow you to establish your wishes for health care and designate a person to make any necessary decisions for you.

Review life insurance coverage

Do you have enough coverage to provide for the lifestyle of those people who depend on you?  Has anything changed that would cause you to need more coverage?  Could you do with less?

Review business continuity agreements

Review or establish Buy/Sell agreements and everything that needs to take place to transition ownership without disrupting business.


Financial Planning

Establish a financial plan

It is tough to know if you are making smart financial choices if you are not making them with respect to achieving your specific financial goals.  If you don’t have a financial plan to serve as the basis of your financial decision-making, it is a good idea to get one. 

Evaluate progress towards financial goals

If you have financial goals you plan to achieve in the future, how far have you come towards achieving those goals?  Have you taken the right steps to achieve everything you want?

Contribute to a 529 plan

529 plans are a great way to save for college.  Read our blog about using 529 plans to save for college to learn more.

Establish or update your budget

Has anything changed in your life that required a change in spending?  If you have no idea of how much you are currently spending, there are a ton of useful tools like that make tracking your spending incredibly easy and can also help you with establishing a budget.

Establish or replenish an emergency fund

If you depleted your emergency fund this year or never had one in the first place, you may want to think about setting some money aside in case of emergency.  How much you should set aside depends on your particular situation, but you should have enough set aside to feel comfortable you can deal with a financial emergency or several months without income.  Not sure where to start?  Read our blog about emergency funds.

Hire a financial advisor

Does taking on the huge responsibility of managing your finances appropriately sound like a lot to handle?  Fortunately, you can outsource all that responsibility to a financial advisor who will take care of all the details to make sure you are able to spend your time living the life you want to live.


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