Critical List: Key Financial Steps to Take Before Year End

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By Brian O'Connell

OK, it's early November, and there's plenty of time left on the calendar until year-end, right?

Maybe, and maybe not -- at least when it comes to tidying up your household money matters. You'll need more time than you think to get your financial house in order by Dec. 31, and the clock is ticking. Time constraints with Thanksgiving and Christmas beckoning will surely swallow up some valuable time, as will end of the year (and quarter) workplace deadlines, leaving less time than you think to make financial decisions that could mean big bucks (and less in taxes) to the financial side of your life.

Financial consumers should take end-of-the-year financial deadlines seriously, as tax, retirement savings and other household financial decisions can spell the difference between sizable individual assets, and missed opportunities that curb the size of those assets.

No worries, though, as help is on the way. In the latest edition of Fidelity Investments Viewpoints report, the Boston-based mutual fund behemoth lists its top 10 end-of-the-year "smart financial moves," including a thorough review of your investment portfolio for asset allocation purposes (that's number one on the Fidelity list.)

Turning investment losses into tax gains, choosing a charity to maximize tax gains, using any money left in a flexible spending account and taking required distributions at age 70½ also make the list.

While the Fidelity year-end "to do" list is well worth a look, other financial experts off their best bets for a year-end household financial checklist:

Start with your budget. Your budget is the best place to start your financial goal evaluation, says Katie Ross, education and development manager at American Consumer Credit Counseling. "Paint a clear picture of your financial situation right now," she said. "This budgeting and daily expense worksheet might be a good resource for you to use. Once you know where your money is going, you can identify areas to cut back. That will also help you find more money to apply towards your debts, or add to your savings and get a good head start for the new year."

Pencil in some 'quality time' with your financial adviser. This tip comes from Taylor Schulte, founder of Define Financial in San Diego. "While you are most likely in touch with your financial planner throughout the year, December and January are good times to get a face-to-face meeting on the books, if possible," Schulte says. "Use the time together to ensure he or she is up to speed on all of your 2015 life updates and start discussing your 2016 goals. Do you need to start thinking about your child's college education? Have your insurance needs changed? Have your career ambitions changed? Do you anticipate a significant change in income or expenses?"

Have a thorough list. That's the advice from Stuart Ritter, a financial planner and vice president of T. Rowe Price Investment Services, who provided the following to-do list to MainStreet.
  1. Check your asset allocation; rebalance if necessary.
  2. Review beneficiary designations.
  3. Make sure you are saving 15 percent of income.
  4. If you are saving enough, contribute to a Roth IRA, you can contribute until April 15, but the sooner the better.
  5. Use a donor-advised fund for charitable contributions to avoid capital gains tax.
  6. Consider a 529 plan for your child's college education.
  7. Gift up to $14,000 without gift tax consequences.
  8. Be aware of capital gains distributions.
Maximize your 401(k) contributions. Margaret J. Smith, director of tax and financial planning at Canal Capital Management in Richmond, Virginia, advises topping out on your retirement plan by year-end. "Employees can defer up to $18,000 each year, $24,000 if over 50, resulting in significant tax savings this year," Smith says. "Also, if you expect 2015 to be a large income year, and 2016 may not be the same, consider accelerating deductions such as charitable contributions, your January mortgage payment/interest expense and medical expenses into 2015 to receive a larger tax benefit this year."

Time is on your side right now, with eight weeks or so left until Dec. 31 -- use the time wisely and get your financial life in order for 2016.
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