5 Financial Decisions to Review Before Year-End
By the fourth quarter, most of the year's financial picture has come into focus. You have a better sense of your income, any gains you've realized, and what you plan to give. That makes this a good time to review a few decisions while there's still time to act: required minimum distributions, harvesting tax losses, Roth conversions, charitable gifts, and 401(k) contributions.
The last one may be the easiest to act on, and the one most people overlook. If you're still working, check what you're on track to contribute this year. Here's a hypothetical example: adding $5,000 to a traditional 401(k) while you're in the 24% federal tax bracket could reduce this year's federal income tax by about $1,200. You'll pay tax when you take the money out later, so whether it makes sense depends on your situation. But it's especially worth reviewing in a high-income year or as retirement gets closer.
You don't need to act on all five. Look at which ones apply to you, and make your decision before December 31. If giving is part of your plans, how you give can matter as much as how much. Explore our free Charitable Giving Strategy Finder to see which approaches may fit your circumstances.
