The new year is right around the corner, which means it is time once again to focus on year-end retirement planning before time runs out. As 2024 approaches, amidst never-ending busy schedules and the bustle of the Christmas season, there are several financial moves you should consider making before the year comes to a close. Follow our year-end retirement planning checklist to help make sure you’re remaining on-track to achieve your retirement goals.
Year-End Retirement Planning Checklist
Take Financial Inventory
Review your various sources of retirement income.
- Assess your investment performance – It’s important to take stock of where your investments are as it relates to your future financial security – especially when the market fluctuates. Figure out which investments are doing the best job of meeting your asset allocation goals – and whether your current investments still fit that profile. You’ll also need to evaluate your major life events – the birth of a grandchild, the death of a child – to make sure your beneficiaries are up to date.
- Rebalance your portfolio – By the end of the year, you may find that the allocation of each investment in your portfolio no longer meets your time frame, risk tolerance, need, or preferences. A financial advisor that operates under a fiduciary standard of care can help rebalance your portfolio to help align your investments with your goals and objectives. Plus, you’ll need to ensure that you’ve taken your required minimum distributions (RMD) if applicable, and note that the age for RMDs is now 73, following the SECURE Act 2.0 changes.
- Evaluate if you’ve maximized your contributions – Employee 401(k) contributions for 2024 will top off at $23,000 with an additional $7,500 catch-up contribution allowed for those age 50 or older.1 For both traditional and Roth IRAs, the maximum contribution is $7,000 with a catch-up contribution of $1,000 for people age 50 or older. Increasing your contributions to tax-deferred retirement accounts or health savings accounts, if you’re able, helps reduce taxable income.
Set Financial Goals
Identify priorities and visualize exactly the future you want.
- Evaluate your long-term retirement goals – While we all have a goal of a financially secure retirement; our goals often reach far beyond ourselves. As your needs for retirement evolve – with new family additions or passions you discover – you may need to re-evaluate how you allocate your money. Whatever your goals may be, taking the time to review and assess the moves you’re making to accomplish your goals is critical for planning.
- Determine how much of a nest egg you’ll need – To many people, determining how much of a nest egg you will need means understanding your current/future expenses, setting a budget and planning for retirement based on the lifestyle you plan to enjoy. Consider updating your retirement calculations if inflation or major market changes have impacted your financial projections this year. Even if you’ve done your homework and calculated your retirement savings goal – and you have an investment plan to help get you there – it’s important to understand that there isn’t a one-size-fits-all formula and retirement expenses may evolve.
- Prepare charitable donations – The holiday season offers plenty of opportunities for you to give to charity. Taking some of what you have and giving to those less fortunate is a great way to pay it forward and give back your community – while also supporting your long-term financial goals. Whether you donate to one cause, or many, you receive an added benefit by deducting those donations on your taxes. If you haven’t already, consider setting up Qualified Charitable Distributions (QCDs) from your IRA if you’re over 70½ to maximize your tax benefits. Your advisor can help you learn about a smarter approach to year-end charitable giving.
Set Yourself Up for Success
Start thinking about the year ahead
- Assess and set retirement goals for 2025 – Setting short-term goals helps you guide your life’s direction and measure your progress. Decide what you want to achieve during the next 365 days – specifically from a financial standpoint. The new year is a perfect time to develop or modify your holistic investment plan that can help set you up for a secure retirement.
- Manage tax planning – Now is the time to take advantage of tax-deferred growth opportunities, and tax-advantaged investments, among other strategies. Considerations include deferring your income, boosting your 401(k) contributions and harvesting tax losses. Not all actions recommended will apply to your situation, so it is suggested you see a financial advisor or accountant for your specific tax needs.
- Schedule a one-on-one with a retirement advisor – Whether you’re a financial pro, or not, retirement planning may be confusing or even daunting to undertake. That’s where you can leverage the expertise of a retirement investment advisor. With market uncertainty and potential legislative changes, it’s a good idea to consult an expert who can help navigate the current financial landscape. An advisor will review your investments in light of your goals and tailor a strategy specific to your financial needs.
Don’t Do It Alone
With the hustle and bustle of the holiday season, it may be challenging to take the time to review your retirement plans. However, taking the time to review your retirement plans at the end of the year can help increase your ability to reach your retirement goals and objectives. If there’s one resolution you keep going into the new year, let it be a thorough review of your retirement plan.
With our Year-End Retirement Checklist, you’ll be ready to wrap up 2024 while preparing for the year ahead. However, you don’t have to do it alone. At Kowal Investment Group, we’re determined to help you start the new year off right, setting you on a path to the retirement of your dreams. Get your complimentary retirement review scheduled today!.
1IRS, 2018
Raymond James does not provide Tax or Legal advice.
The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation.
