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Are You Ready For A New Year? 5 Financial Steps To Take Before You Say Hello To 2020

Are You Ready For A New Year? 5 Financial Steps To Take Before You Say Hello To 2020

| December 27, 2019
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By David Barol, MPP, CFP®, CLU®, ChFC®, BFA™

As we approach the year’s end, amidst all the holiday hustle and bustle, the last thing you want to think about is taking care of your finances. I get it. But since finance-related resolutions tend to be a popular choice for the new year1,why don’t you give yourself a head start on your 2020 financial goals? Here are 5 critical financial actions you’ll be glad you tackled when the ball drops on New Year’s Eve!

1. Celebrate Victories And Set New Goals

What financial goals did you set when you rung in 2019? Did you stay on top of those goals or did they get swept under the rug? Take this time to reflect on the past year and mark how far you’ve come, celebrating your progress, no matter how small! Then evaluate your saving and spending from the past year, set some new goals, and adjust your financial plan, taking into account any life changes such as marriage, relocation, or a job change. 

2. Give Your Savings A Boost

If this is your plan, max out your contributions to your 401(k) by the end of the year. For 2019, you can contribute as much as $19,000 (or $25,000 if you are age 50 or older). Remember, these are your contribution limits -- any employer match would be in addition to this. You might also consider contributing to a Roth IRA. For 2019, you can stash away $6,000 (or $7,000 if you are age 50 or older). Finish the year strong by investing in your future!

3. Use Up Your Employee Benefits

While every employer has different rules that apply to the benefits they offer their employees, many benefits expire or reset at the end of the year. You work hard for these perks, so be sure to use them!

Medical and Dental Benefits

At the beginning of 2019, did you have good intentions of taking care of some dental work, blood tests, or other medical procedures lingering on your to-do list? Now’s the time to take advantage of all your healthcare needs before your deductible resets. Dental plans, in particular often have a maximum coverage amount. If you haven’t used the full amount and anticipate any treatments, make it a priority to set an appointment before December 31st.

Flexible Spending Account

Like your health insurance benefits, you’ll want to use up as much of your FSA (flexible spending account) dollars as possible by the end of the year. Rules only allow you to carry over $500 to the next plan year. Check the restrictions to see what you can use the money for, and take care of any needs your plan allows.

Sick and Vacation Time

Depending on your company, your sick or vacation time might expire at the end of the year. Check with your HR department to learn about any expiration dates. If it does expire, fit in a last-minute vacation or even a staycation. If you need to make any trips to the doctor, schedule those appointments now to make use of this paid time off benefits before you lose them.

4. Be Sure To Update

Your estate plan and your insurance coverage. If you took the time and energy to create an estate plan, check it periodically to ensure all the documents are up to date, and no major details have changed. Use significant life events to spur updating your estate plan. If you change a beneficiary in one place, such as a life insurance policy, make sure you are consistent with your other documents to avoid confusion. 

Your insurance needs may change as the year goes by, so periodically review your coverages and designated beneficiaries to bring them up to date to reflect your current financial situation. For example, if you paid off debt, you may not need as much life insurance coverage since your family’s liabilities have decreased. You might also want to evaluate your need for other types of insurance, such as long-term care insurance.

5. End The Year On A Generous Note

If gifting is one of your long-term financial goals, it’s never too early to start planning for the legacy you want to leave your loved ones without sharing a good portion of it with Uncle Sam.

Each year you can gift up to $15,000 to as many people as you wish without those gifts counting against your lifetime exemption of $11.4 million. If you’ve yet to gift this year or haven’t reached the $15,000 limit for a particular recipient, make sure you do this by December 31st.

If you’re planning to itemize deductions on your 2019 tax return, be sure to make your charitable contributions before the end of the year. This includes donating appreciated securities, which may help you avoid paying taxes on the gains. Along with your other tax documents, find and organize receipts you have from donations to charities, whether made in cash, securities, or even old shoes.

Need Help Getting Started? 

Which of these steps do you need to take before the ball drops on New Year’s Eve? Our team at Keystone Asset Management Strategies would love to help you finish the year strong and set you up for a successful 2020. Find out whether our KeyAMS Strategic Process will help you achieve your goals by contacting us at 267-421-8272 or to schedule a free, no-obligation consultation.

About David

David Barol is a wealth advisor at Keystone Asset Management Strategies. He specializes in helping clients create a values-based financial strategy that focuses on turning their dreams into achievable goals. David earned his bachelor’s degree in Political and Social Thought from the University of Virginia and became a Master in Public Policy at the John F. Kennedy School at Harvard. He spent many years working in economics consulting and then public finance, making significant contributions to our society, including writing the war risk insurance policy used by the federal government during the Gulf War and creating economic models to measure the impact of infrastructure projects, most notably the project that led to the building of the airport in Hong Kong. David ran for public office and has always been involved in his local and regional community. After his political career, David became a financial advisor, since earning his Chartered Life Underwriter (CLU®), Chartered Financial Consultant (ChFC®), Certified Financial Planner™ (CFP®), and Behavioral Finance Advisor (BFA®) designations. To learn more about David, connect with him on LinkedIn.


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