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Blending Life, Wealth, Work & What's Next
December 12, 2019

Young Professionals: Items to Review before December 31

By Davis Gardner

Many people wait until the new year to address their finances, simply adding it to their list of resolutions for the year.  However,  December 31st is a critical deadline for many key actions related to your financial life, and by waiting until January to evaluate where you stand, you could miss out on some huge benefits.  By reviewing the items in this list, you ensure that you meet those deadlines and set yourself up for success in 2020.

Here are the main items to review before December 31st, 2019:

  1. Employer-sponsored retirement plan contributions. Employer-sponsored retirement plans like 401(k)s are funded straight from your paycheck, so the money you contribute avoids income taxation.  By contributing up to the maximum amount to your 401(k) ($19,000) by the end of the year, you both lower your tax liability for 2019 and boost your retirement savings. 

 

  1. Traditional and Roth IRA contributions.  The maximum total contribution for all of your IRAs is $6,000 for 2019.  If you have an IRA invested with us and aren’t sure how much you’ve contributed this year, please let us know. We find it best to complete your contributions in accordance with the calendar year in order to remain proactive.  This allows you to focus on 2020 contributions in 2020, without having to worry about the prior year when the time comes to file taxes.  Those who qualify will receive a tax deduction for their contributions to traditional IRAs. 

  

  1. Estate documents, account titling, and beneficiary designations. When life changes, it’s time to review your estate planning documents, account titling, and beneficiary designations.  In doing so, you ensure that your assets are set up in the best interest of you and your loved ones.  For those who’ve had major life updates, we are prepared to discuss as part of our goal-setting in 2020.

 

  1. HSA contributions and FSA balances. The maximum allowable contribution to an HSA for 2019 is $3,000 for individuals and $7,000 for families.  HSA contributions are tax-deductible and allow for funds to grow tax-free when used for qualifying medical expenses.  Additionally, those with an FSA should inquire with their employer and determine if they have a carryover provision.  If there is no carryover provision, any unused funds will be forfeited at year-end. So, you may want to look at ways to spend any remaining funds.  

Once you’ve reviewed where you stand, take some time to reflect on 2019.  Personally, did you accomplish your goals?  Is there room for further improvement?  Financially, what were some things that worked well? What didn’t work well?  Are there any pieces of your financial life that need updating in 2020?

We look forward to diving into your goals for 2020 at our next meeting.  Please do not hesitate to reach out with any questions you have before year-end.

From all of us at Omega, have a wonderful holiday season and a happy new year!

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