The end of year is a good time for investors to think about their portfolios and overall savings and investing approach. In between your holiday parties and family time, you may want to consider a few steps that could help minimize your tax liability for the current tax year, and position your portfolio for the coming year:
1. Rebalance your portfolio: The end of the year is a good time to take a look at your portfolio allocation and make sure it’s aligned to your goals and risk tolerance. This can be especially important for people nearing or in retirement, who might not be able to withstand sudden volatility.
2. Consider tax loss harvesting: Investors generally don’t want to sell anything at a loss, but there can be a significant advantage if you have gains to offset. Consult a tax professional to determine what strategy works best for your situation.
3. Max out retirement savings (if you can): End of year is a good time to evaluate your overall savings and determine if you can bump up what you’re putting away for retirement. It’s a good idea to take full advantage of your employee retirement plan, at least to the point of any employer match.
4. Consider a Health Savings Account (HSA): It’s open enrollment season, and if your employer offers a HSA—and you qualify to contribute to one— it can serve as a stealth retirement savings account in addition to a 401(k) or an Individual Retirement Account (IRA). If you’re able to contribute to a HSA and leave it alone, it can be used to cover healthcare expenses in retirement without tapping into other savings, and after age 65, money in an HSA can be used for any expense without penalty.
5. Charitable giving: As with other aspects of your finances, it’s important for charitable giving to be part of a broader financial plan. If you’re retired, consider donating a portion of your retirement income that you don’t need for living expenses, as you can potentially deduct contributions to qualified organizations if you itemize.
Don Daigle
Branch Leader
2184 North 2nd Street
Millville, NJ 08332
856-506-3412
Get Started at schwab.com/vineland-millville
Don Daigle is an Independent Branch Leader and Financial Consultant at Charles Schwab with over 29 years of experience helping clients achieve their financial goals. Some content provided here has been compiled from previously published articles authored by various parties at Schwab.
Information presented is for general informational purposes only and is not intended as personalized advice. Employees of Charles Schwab & Co., Inc. are not estate planning attorneys and cannot offer tax or legal advice, or create and prepare legal documents associated with such plans. Where such advice is necessary or appropriate, please consult a qualified legal or tax advisor.
