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The second half of the year is the perfect time to begin your year-end personal financial review while also reevaluating your annual financial plan. Giving yourself enough time can help to provide an accurate picture of your finances, identify areas that need work, and set a strategy for the following year.

Review the following year-end and annual steps below to help plan a holistic financial review with minimal stress.

Year-End To-Dos

  1. Consider Your Charitable Giving Strategy

    As you review your assets and overall financial picture, consider your charitable giving strategy for the current tax year.

    Be sure to update your financial advisor on any donations or in-kind gifts you've made to date. This will help them assess where you might be able to take advantage of tax benefits for additional giving by the end of the year. You can also work with your advisor to ensure that your overall estate plan is on track with your charitable gifts and contributions to any family foundations or trusts you've established.

  2. Review Your Planned Giving Strategy

    An end-of-year review is an ideal time to make sure you're maxing out the annual limits of your planned giving strategy. Be sure to review wealth transfer opportunities, such as 529 plan accounts and annual gifting limits for family members. Remember that contributions to 529s are considered gifts for tax purposes.

    For 2019, the annual gift tax limit is $15,000 per person. Therefore, if you and your spouse have two grandchildren, you can gift a total of $30,000 to each grandchild's 529 plan account as a couple. Keep in mind that the annual gift tax limit includes financial gifts made outside of 529s, so keep your advisor up to date with all of the gifts you've made to family members throughout the year.

  3. Assess Your Retirement Planning

    If you're still working, a year-end review is an ideal time to determine how much you can still contribute to your qualified retirement accounts. Make sure to review all IRAs and employer-sponsored plans, such as Simplified Employee Pension (SEP) IRAs, solo 401(k)s, 401(k)s, and 403(b)s.

    If you're 70 1/2 or older and/or if you're retired, be sure to also check in with your advisor about any required minimum distributions that should be considered for the calendar year. If you're close to 70 1/2, the IRS will require you to start taking annual distributions from your retirement accounts.

  4. Review Your Medical Savings Accounts

    Your flexible spending and health savings accounts (HSAs) have annual contribution limits, and they may also have "use it or lose it" provisions. Check your contributions year to date and make sure you're on track to max them out or use up your benefits by the end of the year. Don't forget that your HSA could potentially be an essential component of your overall retirement planning strategy.

Annual To-Dos

  1. Meet with Your Financial Advisor

    Schedule a meeting with your financial advisor to get your personal financial review moving along. Use this meeting to assess any progress you've made toward your annual financial goals. It's also a time to review your asset allocations, rebalance your investments, and consider the implications of any significant life changes that have occurred and that might affect your financial plans. These changes may include marriage, the addition of a grandchild to the family, the loss of a spouse or partner, a move to a new city or state, or the sale or purchase of a home.

  2. Check in with Your Tax Advisor

    Determine where your tax strategy needs adjusting. If you've sold or acquired new assets, be sure to bring all documentation to your advisor. There may be opportunities in your portfolio for tax-loss harvesting, a strategy that involves selling securities in your portfolio at a loss to offset capital gain liabilities you might encounter with other holdings. Your benefits will depend on your tax and income bracket. Your financial advisor, along with your tax advisor, can offer guidance on whether you have losses that can be harvested.

  3. Review Your Estate Plan

    A personal financial review should always include a review of your estate plan. Even if it seems like you've had no life changes big enough to warrant a reassessment, an annual review of your wills, trusts, advance medical directives, and beneficiaries can't hurt.

    Be sure to inquire about any changes to taxes and how they might impact your current plan. Your estate planning professional can advise about any adjustments that need to be made. They can also work with your advisor to ensure that you're taking maximum advantage of opportunities to transfer your wealth in the most tax-advantageous manner from now until your retirement.

  4. Assess Your Insurance

    Be sure to review your deductibles and beneficiaries, and to determine whether you need more or less insurance based on any life changes that have occurred. Make sure to include all of your insurance policies in your annual personal financial review, including auto, recreational vehicle, homeowners/renters, and life insurance (both term and whole life policies), as well as any annuities.

Use these lists to help guide conversations with your financial advisor and tax advisor, and to keep your savings and wealth transfer strategies on track. Starting your year-end financial review and reevaluating your overall annual plan early on is critical to ensure that you can take advantage of all possible strategies before the IRS deadlines. You'll also give yourself some wiggle room to gather necessary documents for next year's tax returns, not to mention peace of mind across your entire financial portfolio.

This information and recommendations contained herein is compiled from sources deemed reliable, but is not represented to be accurate or complete. In providing this information, neither KeyBank nor its affiliates are acting as your agent or is offering any tax, accounting, or legal advice.

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