Spend a Little Turkey Day Time on Year-End Planning

by Marc Bastow | November 19, 2012 1:07 pm

I know, I know. Turkey Day is on your mind. No matter if you’re one of the expected 43 million travelers hitting the road[1], or if you’re just staying at home with family and friends — the bird and fixin’s are just days away.

But while you pick at the leftovers this weekend, try to think (and talk) about something coming up pretty quick itself: end-of-year tax, investment and retirement planning.

It’s a buzzkill, but it’s important — and since you’re probably about to load up on Christmas holiday stress, this weekend might be a good time to get it out of the way.

U.S. News & World Report‘s Scott Holsopple provides a useful checklist for end-of-year planning[2], helping people tie up loose ends in 2012 with forward thinking for 2013, all in nice, small bites.

A few to take to heart:

2012

• Contribute as much as you can and the IRS allows ($17,000) into your 401k.
• If you’re age 50 or older, make “catch-up” contributions — you can contribute an extra $5,500.
• The same goes for IRA contributions. Max out if you can, and catch up if you can.
• When it comes to flexible spending accounts, you use it or you lose it — so use it.
• Donate to your charity(ies) of choice for additional deductions.

2013

• Reassess your IRS withholding amount based on your most recent tax returns.
• Set 2013 spending and savings goals based on 2012, but with an eye toward a possible differences in tax rates[3] on investment income for the coming year.

All great ideas, and all worth discussion in the near future. And I’ll add a few more suggestions of my own.

• Take a long, hard look at your portfolio, keeping an eye out for any glaring, unintentionial overweights[4] in a particular sector, asset class or individual stock — then adjust or plan accordingly.
• Most businesses are holding medical enrollment. Don’t guess — do your homework, talk to your spouse, and find out the best available plan to fit your needs.

Whether you are gaining quickly on retirement, or whether you are just starting out, these kinds of exercises go a long way toward fiscal sanity. So relax, take that turkey-induced nap, then take a little time to plan for the future.

Source URL: https://investorplace.com/2012/11/spend-a-little-turkey-day-time-on-year-end-planning/

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