Monday Morning Minute

I hope you had a great weekend! It’s the week before Christmas. Do you have all your holiday shopping done?

LRPC’s Monday Morning Minute for this week, “12 Year-End Financial Planning Tips” (presented below) comes to you courtesy of Andrew Rosen. As an independent, objective Registered Investment Advisory (RIA) firm, Lawton Retirement Plan Consultants, LLC (LRPC) has access to research from many sources. Be assured that I will share enlightening, useful information with you each week.

There isn’t much time left to complete items related to 2017. Check the list below to make sure you haven’t forgotten anything!

Have a wonderful week!


12 Year-End Financial Planning Tips

By Andrew Rosen

With year-end quickly approaching there are only a few more weeks to get those last minute planning items taken care of. Hopefully, these tips will motivate you to get off Santa’s naughty list and also help better position your finances.

So here goes my holiday inspired 12 days of planning tips.

1. Max your retirement plan 401(k)/IRA/Roth

Whether you contribute to a work 401(k) or Roth/Traditional IRA make sure to contribute the maximum you can. That includes the catch-up if you are over 50 (which many people miss). Log in to your online account and make sure you have already or are on pace to hit the allowable maximum for 2017.

2. Increase your 401(k) by 1%

I recognize not everyone is in a position to max out their 401(k). That said most of us can afford to increase one more percentage point and not miss a beat. If you fall into that category just do it! You won’t miss the money and you’ll be inching closer to maxing out.

3. Max your HSA contributions and spend those FSA dollars

Make sure you squirrel every dollar you can into your work Healthcare Savings Account (HSA). This is an often-missed tax deferral that has great benefits. Additionally, if you contributed to a Flexible Spending Account (FSA) in 2017 you MUST use these dollars before year end or else you will lose them.

4. Give to Charity

It is the season of giving and what better way to help out others and feel good doing it than giving to charity. There are many great ways to go about this and even some that don’t require you make a payment until 2018 (such as using those credit cards to charge your gift) if crunched with holiday spending.

5. Have a strategy for those bonus dollars

Before you know it you’ll be receiving that big year-end bonus. Without a plan, those dollars will be spent in a nanosecond. Don’t be that person! Have a plan for where those dollars are going and make sure some of the plan includes bettering your financial situation.

6. Tax loss harvest

One great way to save a few shekels with the tax man is to sell some stock losers before year-end and realize some losses. You can always buy back in 30 days if you’d like to avoid any wash sale rules. This way you get the benefit of lowering your taxes and offsetting any realized gains you may have.

7. Start a 529 college savings plan

Kids grow up fast and college will be here before you know it. If you haven’t already, start a 529 plan and save what you can for your kids. Even if it isn’t much every little bit helps and might as well take advantage of saving tax efficiently. Plus, you can’t forget the benefits of compound interest.

8. Review estate plan

Assuming you have an estate plan dust it off and give it a once-over. Things are always changing and these documents usually go untouched for years. Maybe you want to adjust those trusts or do a little something special for your grandkids. Whatever it may be it is a smart move to give this a review every so often. Naturally, if you don’t have an estate plan than move this to the top of your list.

9. Check beneficiaries

We simply don’t check our beneficiaries enough. Maybe it’s because of the tedious nature, but whatever the excuse this is a good year-end practice. Dust off those old insurance policies that your parents bought for you when you were a kid and give a look to make sure you are comfortable with who gets these funds if you pass. Check everything with a beneficiary including work benefits, property, and investment accounts to be in line with your estate and financial goals.

10. Roth IRA conversion

Now here is a great opportunity if you are in a low tax year to convert some of your IRA dollars into a Roth. If on the edge remember you have until October 15th to recharacterize the conversion and reverse it.

11. Take your Required Minimum Distributions

If you are 70 1/2 years old in 2017 or the owner of an inherited IRA you will likely have to take an RMD this year. Make sure if you haven’t already you get that scheduled before the New Year or be subject to a penalty on these dollars. I recommend setting this up automatically in most instances if you haven’t already.

12. Exercise options

If you have unexercised stock options it may make good sense to exercise a portion to stay under a certain tax threshold. I’d review your incomes and deductions to see if there is an optimal amount to exercise as to manage these options most tax efficiently.

Where did 2017 go?

I can’t believe 2017 is almost over already. Hopefully, you can take some time off and spend it with those that matter most this holiday season. I plan to do just that and reflect on all the good and bad of the year that was. Oh and of course make sure I’m dealing with my year-end planning list!


About LRPC’s Monday Morning Minute

Lawton Retirement Plan Consultants, LLC (LRPC) Monday Morning Minute is crafted to provide decision-makers with important information about the economy, investments and corporate retirement plans in a format that allows a reader to consume the information in less than 60 seconds. As an independent, objective investment adviser, LRPC has access to many sources of research and shares the best and most relevant information with its readers each week.

About Lawton Retirement Plan Consultants, LLC  

Lawton Retirement Plan Consultants, LLC is a Milwaukee, Wisconsin-based independent, objective Registered Investment Adviser (RIA) providing investment advisory, fiduciary compliance, employee education, provider management and plan design services to retirement plan sponsors. The firm currently has contracts in place to provide consulting services on more than $400 million in plan assets. For more information, please contact Robert C. Lawton at (414) 828-4015 or or visit the firm’s website at Lawton Retirement Plan Consultants, LLC is a Wisconsin Registered Investment Adviser.

Important Disclosures

This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance, tax, legal or investment advice. Each plan has unique requirements and you should consult your attorney or tax adviser for guidance on your specific situation. In no way does Lawton Retirement Plan Consultants, LLC assure that, by using the information provided, plan sponsor will be in compliance with ERISA regulations. Investors should carefully consider investment objectives, risks, charges and expenses. The statements in this publication are the opinions and beliefs of the commentator expressed when the commentary was made and are not intended to represent that person’s opinions and beliefs at any other time. The commentary does not necessarily reflect the opinion of Lawton Retirement Plan Consultants, LLC and should not be construed as recommendations or investment advice. Lawton Retirement Plan Consultants, LLC offers no tax, legal or accounting advice and any advice contained herein is not specific to any individual, entity or retirement plan, but rather general in nature and, therefore, should not be relied upon for specific investment situations. Lawton Retirement Plan Consultants, LLC is a Wisconsin Registered Investment Adviser and accepts clients outside of Wisconsin based upon applicable state registration regulations and the “de minimus” exception.