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What Financial Considerations Should be Made Before the End of 2020?

What financial considerations should you make before the end of 2020? Here are six items you need to pay attention to and take care of for a better financial future in the upcoming year.

Full Transcript:

Hello, welcome to Arista Advice. 

Question the week is: "Paul, what financial considerations should be made before the end of 2020?"

A lot of things have happened in 2020. We'll all remember 2020, but let's look at six different things that we should be looking at inside our financial plan as we approach the end of 2020. I saw a shirt last week and it said "Cancel 2020." No, let's not cancel it. Let's learn from it, and go implement some key things that we took away. 

Number one: tax loss harvesting. That is when you take your capital losses and your capital gains and you leverage, and you manage them to sell some, both the loss and the gain, to offset and to neutralize your holdings.
Number two: do you want to take itemized deductions? It's really important to understand the deductions that you can and can't deduct. 
Number three: ramp up your retirement plan contributions if you're able to. Get the money in. For 2020 the limit on a deferral 401(k) is $19,500, the catch-up is $6,500 to get to $26,000. And also IRAs, Roth IRAs, Backdoor Roths, all of those are key important strategies and vehicles to use before 2020 is over.
Number four: are you thinking of gifting? If you wish to be philanthropic and charitable, it's a great time to be doing it.
Number five, very, very important. Please, please, please take notice! Review your beneficiaries. Your trust and your will do not dictate qualified retirement plan distributions. Only the qualified plan documents govern where the money goes if something unfortunately happens.
Number six: check on the amount you have withheld. If you discover that you've withheld too little on your W-4 form so far, you may need to adjust your withholdings before the year end.

The takeaway - little year-end moves might help you improve your short-term and long-term financial situation.

Please go to AristaWealth.com to get additional tools, tips, and videos, and give us a call to discuss this and other topics. Have a great day.