December 10, 2014

7 Super Simple Tasks to Complete Before You Rock in the New Year

36 minutes

Yeah, there are lots of articles this time of year talking about year-end tasks to complete, but mine are Super Simple ones. Okay...maybe it's just my way of trying to sound different. Still, these ARE 7 relatively simple tasks that could make a big difference in your financial life (so indulge me).

Invest Wisely When Should I Rebalance My Portfolio?

Today I read an article on market watch titled "The Hidden Truth About Rebalancing Your Portfolio" on marketwatch. The article discussed a recent study that argues that rebalance can actually increase the risk in your portfolio. In this episode, I discuss my observations on their conclusions and my "best practices" for rebalancing a portfolio during retirement.

Plan Well 7 Super Simple Tasks to Complete Before You Rock in the New Year

Pay your real estate tax bill, before year-end if you want to deduct it on your 2014 taxes.

Get your RMD done. If you are over 70 1/2 or have inherited an IRA you need to do this before year-end to avoid a huge IRS penalty. Click here to learn more.

Identify opportunities to harvest tax losses. If you have realized gains for the year, look for current positions with losses that you can use to offset your gains. I discuss a few strategies for doing this.

Conduct an annual beneficiary review. Even if you know the primary beneficiary is correct, you still need to make sure you have contingent beneficiaries. There is a worksheet to do this in the Retirement Toolbox

Consider year-end giving. You can give $14,000 to any individual without tax consequence. If you have charitable intent, consider making charitable gifts before yearend.

Change your important passwords. Changing your passwords is like locking your door at night. It's just common sense. This is so important and almost no one does it. The holidays are a perfect time to do this. I use a password manager (1Password) to create and track complex passwords.

Consider diversifying your tax liabilities. The pressure to save on taxes each year can cause you to save too much in tax-deferred accounts. It's important that you have assets in taxable, tax-deferred and tax-free account. When you retire, you'll have more flexibility to manage your cash flow and tax bracket. If all you do is save in tax-deferred account (like most people), you could end up staying in a high tax bracket during retirement

...more

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By Roger Whitney, CFP®, CIMA®, RMA, CPWA®

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