End of the Year Financial Review

November 07, 2022

There are less than two more months in 2022.


As the year winds down, it’s a good time to reflect and consider actions that may need to be taken financially before year end.

We all know it’s been a tough year for stocks and bonds. It’s likely that your portfolio is not looking as green as it did the last several years before. This is never enjoyable to experience, but volatility is normal and remains the subscription price of investing.

You and I can’t control financial markets, but here are some things you can act on pre-2023.

RMDs: Have you taken your Required Minimum Distribution yet from your IRA? Those who have reached the age of 72 or those who are younger but who have inherited IRAs may still need to take a distribution. Remember this: you don’t have to put it in your bank account. You can consider charitable distributions or keep your investments by moving them into another non-IRA account. The key is: making sure your total RMD amount comes out of the IRA.

Retirement Contributions: If you are still working, have you been consistently adding to your retirement accounts? Have you maxed out your limit for the year? Are you taking advantage of any employee matching opportunities? Take a look and finish the year strong!

Tax Harvesting: We can’t give tax advice, but it’s not too late to consider selling investments for tax purposes. This should only be done in consultation with a tax professional, but sometimes in a down year like this, taking a loss on your investment portfolio can be beneficial when offsetting capital gains.

Reallocation: You might have too much of one stock market sector and need exposure to another. Even more importantly, you could be facing a life change where your portfolio needs to be invested more for income and yield than for capital appreciation. Does your asset allocation match your personal and financial goals?

Revisit risk: In a year like this, investors--especially newer investors—are reminded that investments don’t always go up. When was the last time you’ve looked at your risk tolerance? How are you handling decline in your portfolio? How is your spouse handling it?

Gifts: Not to get all Christmas-y when we haven’t even hit Thanksgiving yet, but have you considered giving some of your money away? Are there charities or churches or clubs that align with your vision that you could support? What about kids and grandkids? Have you considered larger Christmas gifts, or a surprise check made out to them? Wealth is meant to be shared not hoarded.

Estate planning: Speaking of gifts…One of the best gifts you can give the ones you love is a family meeting regarding your estate. Here are 10 ideas and questions that will help you think through such a meeting.

There is more I could add to this list, but this is a good start. Before the holiday hustle and bustle begins, take some time to review your financial situation.

Sound overwhelming? Or know a friend or loved one who is over their head? Reach out to us.