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While it may seem the end of the year is still in the distant future, it’s actually just a couple months down the road. With the holidays fast approaching, we all know those weeks will fly by and the New Year will creep up before we know it. With that in mind, take some to review the health of your finances and use the following checklist as a guide to help you get in good shape for the close of 2015:

Assess your age

Did you reach an age milestone this year in the financial world? Check below to see, and make an appointment with a financial professional if you have questions.

If you turned 50, you may make “catch-up” contributions to IRAs and other qualified retirement plans.

If you turned 55, you are now eligible to access funds from your 401(k) account without any penalties.

If you turned 59 ½, you may take IRA distributions without a 10% penalty.

If you turned 62, you’re qualified to apply for Social Security benefits.

If you turned 65, you’re eligible to apply for Medicare.

If you turned 70 ½, you must take Required Minimum Distributions (RMDs) from your IRA(s).

Evaluate major life events

Perhaps you recently received a large inheritance or gift, or you helped a family member enter an assisted living facility. Or maybe you helped a loved endure a serious illness. Other major life events include purchasing a new home, starting a business, changing jobs, or getting married or divorced. If you experienced one or more of these events in the last year, evaluate how it affected you financially. Any of these circumstances can make a financial impact and affect the way you plan for retirement and allocate your investments.

Major life events can also alter your life insurance coverage needs, so review your premium costs, beneficiaries and and policies to ensure they’re still up-to-date. Again, if you have questions, don’t hesitate to meet with and financial and/or tax profession to discuss your options or ask advice.

Revisit your charitable giving goals.

This is a good time of year to ensure you’re on the right track with planned contributions to charities, as well as cash gifts to family members.

There is a special benefit to giving appreciated securities to a charity. If you have owned them for more than a year, then you can deduct all of their fair market value and therefore bypass the capital gains tax you would normally incur from selling them.

Also, it’s important to note the annual federal gift tax exclusion is $14,000 per individual for 2015, so you can gift up to $14,000 to as many individuals as you desire until the end of the year with no tax penalties. A married couple can gift up to $28,000 tax-free to as many individuals as they wish. The gifts do count against the lifetime estate tax exemption amount ($5.43 million per individual, $10.86 per married couple in 2015).

Trusts are other ways to financially protect your family. Read this previous blog for details about how and why to set one up. If you already have a trust in place, the end of a year is a good time to review and evaluate it.

Evaluate your retirement planning objectives.

Think about your retirement timeline and whether you’re on track to meet your financial goals. If not–especially if you’re nearing retirement–don’t delay meeting with a financial professional about some strategies that can help you play catch up.

If you’ve already reached age 70 ½, remember to take Required Minimum Distributions (RMDs) from your traditional IRA by Dec. 31. If you fail to meet that deadline, the IRS will hit you with a hefty 50% penalty of the RMD amount, plus the taxes you’ll already have to pay on that income.

It’s also a good idea to reevaluate your overall investment portfolio before the end of the year to ensure it’s still in line with your goals. Make sure your assets are properly diversified and carry the right level of risk for your situation.


Author Ron L. Brown, CFP®

Ron is a CERTIFIED FINANCIAL PLANNER™ and President of R.L. Brown Wealth Management. He specializes in retirement, estate, and business planning for professionals and entrepreneurs. Ron assists his clients with creating a financial plan to ensure they are able to live their ideal lifestyle during retirement and leave a strong legacy for their family. Ron has been featured in The Wall Street Journal, US News, Yahoo Finance, Investopedia, and numerous other high profile financial publications.

More posts by Ron L. Brown, CFP®
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