Your Year-End Financial Checklist for 2024

By now, most of us have either wound up our holiday shopping lists or, at the very least, developed a panic-driven plan for the final dash toward the holiday finish line. In fact, this is the time of year when you may have several different important lists you’re reviewing, making sure that everything you wanted to accomplish by the end of year is checked off.

Naturally, your finances are an area where lists are important, too. We’ve written previously about some important end-of-year cash management tasks, but in this article, we’d like to suggest some other general financial and investment tasks that deserve your attention as we quickly close the books on 2024.

1. Take another look at your budget. Like blocking and tackling in football, budgeting is one of those personal finance basics that requires systematic re-visiting. How did your spending for the year match up with your targets? Were there any areas that required major adjustment, either up or down, and do those areas indicate a need for recalibration of your plans, going forward?
2. What about your retirement account contributions? Focusing on the “saving and investing” part of your budget, how did you do this year with putting away funds in your retirement accounts? Remember, the elective contribution limit for 2024 for 401(k) and 403(b) accounts is $23,000, with an additional $7,500 in catch-up contributions for those 50 and older. If you haven’t yet but you are able to do so, consider maxing out your contribution before year-end. And even if you can’t contribute the maximum, make sure you’ve at least put in enough to qualify for your company’s matching contribution, if one is offered. And don’t forget about your traditional and Roth IRA accounts; you can put away up to $7,000 in 2024.
3. Risk management. Review your insurance coverage: life, health, and casualty. Has the value of your home exceeded the limits of your homeowner policy? What about replacement value? Does your life insurance coverage still provide an adequate cushion for your family when compared to your current income and access to liquid assets in the event of untimely passing? If you own a business, whether as a single owner or a partner, is the key person coverage appropriate for ensuring the continuation of the business in a worst-case scenario? Is your medical insurance covering the bases, or could you benefit from switching to a high-deductible plan combined with a tax-favored health savings account (HSA)? And speaking of risks, what’s the status of your liquid emergency fund? Keeping it topped up with a balance equal to three to six months of current income is your best protection against a sudden change in employment status or health.
4. Charitable interests. There’s still time to make a major impact with your preferred charitable or philanthropic organizations. You can utilize a donor-advised fund (DAF) to bundle two or more years’ worth of contributions into a single gift, then direct payments from the fund to your charities over the next several years. You’ll get a charitable deduction for the full amount this year, and your favorite charities with benefit from your generosity. Or, if you’re already taking required minimum distributions from your traditional IRA and you don’t need the income, you may wish to make a qualified charitable distribution (QCD) from your account directly to a qualified charity, avoiding taxation on the distribution and providing a boost to the charity.
5. Is it time for a Roth conversion? Speaking of traditional IRAs, have you analyzed the potential benefits of converting some or all of your traditional IRA balances to a Roth account? You’ll pay taxes on any pre-tax amounts contributed to your traditional account, but Roth IRAs don’t require RMDs, so you can allow the funds to accumulate without taxation for as long as you wish. Also, distributions from a Roth account in retirement are not taxed, unlike those from a traditional account. If you think you could be in a higher tax bracket in retirement than presently, a Roth conversion could be a good idea. Consult with your financial and tax advisors before you make your decision.
6. Gather the harvest. If you have any investments currently in a loss position, it might be time to consider tax-loss harvesting. By selling at a loss, you may be able to use these negative returns to offset taxable capital gains in other areas. Consult with your financial advisor to see if you have investments that offer this possibility.
7. Review the big picture. As we near year-end, most of us spend some amount of time reflecting on our goals—financial, personal, and otherwise. As you think it over, be sure to notice not only the places where you came up short, but also the wins. Give yourself credit for the accomplishments, and make a constructive plan to work on the deficits. Ask yourself:
   • What can I do before year-end to make progress on this year’s goals?
   • What do I need to adjust or amend, going forward?
   • Are there areas where I need to re-direct resources or acquire new ones?
8. Talk to your advisor. Your professional financial advisor can be your greatest resource as you re-assess where things stand with your financial journey and priorities. They can help you look for ways to improve the efficiency of your plan, help you find “holes” in your budget, and work with you to make sure your investments are performing in line with your goals. This is a great time to set aside some time to have a detailed conversation about any of the matters above, or anything else you need information about.

At Aspen Wealth Management, we want to help you make this your most successful year yet. To learn more, please visit our website and read our article, “Gratitude and Retirement: How the ‘Practice’ of Being Thankful Can Improve Your ‘Second Act.’”