It’s hard to believe, but the year is winding down. Before you know it, the holidays will be over and everyone may be making – and hopefully sticking to – New Year’s resolutions.
“In between wrapping presents and attending holiday parties, there are financial strategies to employ to help you start off next year on the best foot financially,” said James C. Kelly, wealth strategist at PNC Wealth Management®.
Kelly outlined year-end planning strategies that everyone can benefit from – regardless of age or financial status.
Regardless of your age or how much you have in your bank account, it’s important to create and regularly review your estate plan with your legal advisors. Your estate plan dictates what will happen to your possessions, finances and dependents after you pass away.
Things may have changed over the past year, and you should ensure your plan reflects your current lifestyle and family situation.
“When reviewing your estate plan, you want to review who is included and whether the plan reflects recent life changes,” Kelly explained. “If you have children, it’s important to designate who will care for them if you aren’t around.”
Your estate plan may also include things like standby guardianship and power holders (for example, financial and medical power of attorney). You should review these considerations with your legal advisors.
Even though you won’t file your taxes until next year, if you wait until then to make adjustments, it’ll be too late to impact your 2018 taxes. Be sure to direct any tax questions to a tax advisor.
“One of the country’s most comprehensive tax reform packages went into effect at the beginning of this year,” Kelly said. “You want to make sure that you’re aware of your tax obligations and current withholdings before Dec. 31, so you don’t have any surprises come filing season.”
The IRS offers an online withholding calculator.
Many employers’ health insurance plans include benefits such as flex spending accounts (FSAs) or health savings accounts (HSAs).
If your employer offers an FSA, you may need to spend that money before the end of the year – or lose it forever. Qualifying households can allocate up to $5,000 per year for dependent-care services and $2,650 per year for medical expenses.
If you have an HSA, you have until year-end to max out your contributions: $6,900 per year for those under 55 per household, and $7,900 per year for Americans 55 and older per household.
Everyone gets one free credit report every 12 months from each of the three major credit bureaus at www.annualcreditreport.com. Consider checking one report every four months to help you catch any fraud sooner rather than later.
“Take advantage of your free credit report so you’re aware of your financial status and also to make sure nothing unusual or fraudulent occurred over the past 12 months,” Kelly said. “Once you get your free credit report, I recommend saving it and keeping a hard copy. You never know when you’re going to need it.”
If you notice any suspicious activity, contact the reporting bureau.
Hopefully you’ve been contributing enough to your 401(k) plan to at least receive a company match if your employer offers one, but are you taking full advantage of the tax-advantaged retirement savings vehicle?
Individuals under age 50 can max out their 401(k) plan by contributing $18,500 per year, and those age 50 and older can put an extra $6,000 into their 401(k) plan per year.
“A 401(k) is a great tool to help save for retirement,” Kelly noted. “If you’re able to contribute more – or even better, max out your contributions – you have until the end of the year to do so.”
Certainly the end of the year can be a busy time, but your future self will thank you for taking advantage of these year-end planning strategies!
See how PNC Wealth Management can create customized solutions to help you meet your financial goals year-round »
Kelly also advised that if you’re 70 ½ or older you should make sure to take your required minimum distribution from your IRA before the end of the year.
PNC Point of View
Real People. Real Perspective. Real Insights.
Read more POV Stories »
These articles are for general information purposes only and are not intended to provide legal, tax, accounting or financial advice. PNC urges its customers to do independent research and to consult with financial and legal professionals before making any financial decisions.
This site may provide reference to Internet sites as a convenience to our readers. While PNC endeavors to provide resources that are reputable and safe, we cannot be held responsible for the information, products or services obtained on such sites and will not be liable for any damages arising from your access to such sites. The content, accuracy, opinions expressed and links provided by these resources are not investigated, verified, monitored or endorsed by PNC.
The material presented herein is of a general nature and does not constitute the provision by PNC of investment, legal, tax, or accounting advice to any person, or a recommendation to buy or sell any security or adopt any investment strategy. Opinions expressed herein are subject to change without notice. The information was obtained from sources deemed reliable. Such information is not guaranteed as to its accuracy.
The PNC Financial Services Group, Inc. (“PNC”) uses the marketing names PNC Wealth Management® and Hawthorn, PNC Family Wealth® to provide investment consulting and wealth management, fiduciary services, FDIC-insured banking products and services, and lending of funds to individual clients through PNC Bank, National Association (“PNC Bank”), which is a Member FDIC, and to provide specific fiduciary and agency services through its subsidiary, PNC Delaware Trust Company or PNC Ohio Trust Company. PNC uses the marketing name PNC Institutional Asset Management® for the various discretionary and non-discretionary institutional investment, trustee, custody and related services provided by PNC Bank, and investment management activities conducted by PNC Capital Advisors, LLC, an SEC-registered investment adviser and wholly-owned subsidiary of PNC Bank (“PNC Capital Advisors”). PNC uses the marketing name PNC Institutional Advisory Solutions® for discretionary investment management, trustee, and related services conducted by PNC Bank. PNC uses the marketing name PNC Retirement Solutions® for investment, consulting, trustee, and custody services for employer-sponsored retirement plans provided by PNC Bank. PNC does not provide legal, tax, or accounting advice unless, with respect to tax advice, PNC Bank has entered into a written tax services agreement. PNC Bank is not registered as a municipal advisor under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Act”). Investment management and related products and services provided to a “municipal entity” or “obligated person” regarding “proceeds of municipal securities” (as such terms are defined in the Act) will be provided by PNC Capital Advisors.
Investments: Not FDIC Insured. No Bank Guarantee. May Lose Value.
“PNC Wealth Management,” “Hawthorn, PNC Family Wealth,” “PNC Institutional Asset Management,” “PNC Institutional Advisory Solutions,” and “PNC Retirement Solutions” are registered marks of The PNC Financial Services Group, Inc.
Read a summary of privacy rights for California residents which outlines the types of information we collect, and how and why we use that information.