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10 Financial Planning Tips for Year-end


As we approach the final months of 2014, it's once again time to consider year-end tax, estate, and financial planning issues.

As we approach the final months of 2014, it’s once again time to consider year-end tax, estate, and financial planning issues.

Here are 10 financial planning tips for year-end:

1. Review / adjust your 401(k), 403(b), TSA, or other retirement account contributions. For 2014, individual participants in defined contribution plans like 401(k)s can defer up to $17,500. The catch-up contribution provision allows those over the age of 50 to contribute an additional $5,500 for the year.

2. Review your employer benefits package and consider the options for 2015. Review your current asset allocation and future contribution allocation within employer-sponsored retirement accounts with your personal financial advisor.

3. Spend the balance from Flex Spending Accounts (both healthcare and child care) by the deadline, which is often year-end. Check with your employer to confirm your deadline date and/or if some of your account can carry over into 2015.

4. Make sure your financial advisor is strategically managing capital losses in your investment portfolio to potentially reduce taxable gains by year-end. This is an important aspect of employing a tax smart investment strategy.

5. Consider adding to or opening a tax advantaged 529 education plan for future education expenses. One advantage of gifting to a 529 plan is that 5 years’ worth of gifts can be made in one year. With the annual gift exclusion of $14,000 for 2014, you can gift up to $70,000 at one time, and double that if the gift comes from a couple.

6. Make last-minute charitable donations. Maximize your itemized deduction by donating property, or appreciated stock. Contributions are deductible if you itemize deductions.

7. Consider your estate gifting strategy. For 2014, you can give up to $14,000 (per person) to as many people as you’d like without incurring any federal gift tax liability. If you’re married you and your spouse can give up to $28,000 per recipient.

8. For those over 70 1/2 be sure you’ve taken your required minimum distribution. Please note that all of your IRA’s need to be considered in this calculation.

9. Review life insurance policies. The low interest rate environment and poor performance in general has caused problems with many of these policies. Confirm with your financial advisor that your life policy isn’t at risk of lapsing in the later years of life.

10. Review beneficiary designations within your IRA’s, 401(k)s, and insurance policies to confirm the information is correct. Make sure you’re not making the common mistake of naming your estate as a beneficiary. Also, please note that your beneficiary designation on these accounts supersedes your Will, so it’s very important to make sure your beneficiaries are listed correctly.

Robert Leahy, is CEO of Leahy Wealth Management Group, with 25 years of financial experience. He is a Certified Financial Planner™ (CFP), Accredited Estate Planner (AEP), and Chartered Financial Consultant (ChFC), and specializes in retirement planning and investment management. He can be reached through http://www.leahywealthmanagement.com.

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