Inside The Plan

Your Year-End Financial Checklist

In this episode of "Inside the Plan with the 401(k) Brothers", hosted by Bill and Andy Bush, the hosts discuss a year-end financial checklist to help listeners maximise benefits for the current year and prepare for the next. The discussion includes insights on upcoming changes in contribution limits for 2024 and highlights key considerations for individuals to review in their financial lives before the year concludes.

Episode Highlights:

• 01:52: The hosts start discussing the first category: taxes. They emphasize the consideration of deductions to maximize benefits for the year, mentioning options like contributing more to retirement plans or utilizing IRAs and Roths.

• 04:36: The hosts touch on the uncertainty of future tax rates and mention that the current rates are set to sunset in 2025. They highlight the potential for changes in tax brackets and advise listeners to consult with their CPA or accountant for accurate information.

• 05:30: Moving to the investment category, the hosts discuss the importance of reviewing asset allocation during the year-end. They briefly mention the concept of gifting to family members, including the annual limit of $17,000 and the need to file gift tax paperwork for amounts exceeding this limit.

• 06:19: The hosts begin discussing the investment side of the checklist, focusing on asset allocation and the potential need for rebalancing due to volatility in the past year.

• 07:05: Further details on the investment side include reviewing outstanding loans and mortgages, revisiting income and savings needs, and considering dividend distributions, emphasizing the tax implications of such distributions.

• 09:13: The hosts suggest self-employed individuals consider opening a retirement plan and highlight the potential tax advantages. They also mention tax breaks for businesses with under 100 employees, especially under 50, regarding retirement plans.

• 10:19: Moving on to the insurance category, the hosts recommend reviewing insurance plans, including property and casualty, and life insurance. They emphasize the need to adapt coverage to changing life circumstances.

• 13:40: The hosts discuss milestones, focusing on specific ages and corresponding financial considerations, such as catch-up contributions, Social Security decisions, and required minimum distributions (RMDs).

• 16:18: Health-related considerations, including open enrolment, reviewing health plans, and understanding flexible spending accounts (FSAs), are covered in the health category.

• 19:41: In the family category, the hosts recommend contributing to education accounts, considering 529 plans, and making charitable contributions, including qualified charitable distributions (QCDs) for RMDs.

• 21:54: The hosts conclude by encouraging a holistic approach to financial planning, considering both short-term and long-term opportunities. They stress the importance of clear thinking and planning beyond immediate concerns.

Key Points:

1. The hosts discuss a comprehensive checklist covering taxes, retirement, investments, insurance, milestones, health changes, family, and life changes.

2. Emphasis on maximizing deductions, contributing to retirement plans, tax loss harvesting, and considering potential changes in tax rates. Consultation with a CPA is recommended.

3. Retirement actions key points include maximizing 401(k) contributions, exploring Social Security filing strategies, and considering additional retirement plans for the self-employed.

Tweetable Quotes:

• "Year-end financial planning is like a short-term roadmap, but don't forget to zoom out and plan for the next three years—think holistically about your life and financial goals."

• "Consider tax strategies like maximizing deductions, retirement actions such as optimizing 401(k) contributions, and thoughtful gifting to family members within the annual limit for a well-rounded year-end financial plan."

• "Reviewing insurance, milestones, health changes, and family matters in your year-end checklist can ensure you're financially prepared and protected. Consult with professionals for accurate advice tailored to your situation."

Resources Mentioned

Horizon Financial Group

Last Chance Financial Checklist

2023 Key Financial Data