Year-End Checklist

Happy Holidays!

I hope you are well and getting ready for a pleasant holiday season.  As we wrap up 2023, here are five year-end financial planning action items that might put you in a better position for 2024:

  • Take your Required Minimum Distributions (RMDs) from Qualified Retirement Accounts

RMDs must be taken from qualified retirement plans/accounts which include profit sharing plans, 401(k) plans, 403(b) plans, 457(b) plans, IRAs, SEP IRAs, SARSEPS, and SIMPLE IRAs prior to 12/31/23.  If this is your first year taking an RMD, the deadline is 04/01/24.  Under the SECURE ACT 2.0, the penalty for missing the deadline is 25%, which may be reduced to 10% if corrected within two years.

  • Maximize Contributions to Retirement Accounts

If possible, max out contributions to retirement accounts.  For 2023, the maximum contribution for 401(k) and 403(b) plans is $22,500 (plus an additional $7,500 for participants age 50 or older), for traditional IRAs and Roth IRAs it is $6,500 (plus an additional $1,000 for account holders age 50 or older).  All pretax/deductible contributions will reduce gross income figures and assist in saving money on taxes.  If you have questions regarding your specific retirement account, please reach out to us.

  • Identify a Tax-Loss Harvesting Strategy

For non-qualified investment accounts, identify a strategy to potentially reduce capital gain taxes by selling positions which are down in value while also selling positions which have appreciated in value.  This will offset capital gains and may lessen capital gain tax liability.  For example, a position that was purchased for $5,000 and is now worth $2,000 (a loss of $3,000) can be sold in tandem with a position that was purchased for $5,000 and is now worth $8,000 (a gain of $3,000) to offset any capital gain tax liability.  Any of these trades must be completed before 12/31/23.  It is important to work closely with a financial advisor and CPA to ensure the accuracy of these strategies.

  • Review Annual Expenses

With most of 2023 in the rearview mirror, it’s a great time to look at annual lifestyle expenses, both basic and discretionary.  Reviewing one’s burn rate for accuracy is an essential part of any cash flow analysis, especially with recent inflation pressures.  Identifying precise expense figures may provide peace of mind as these expenditures can be projected with an inflation factor into retirement.

  • Review/Update Estate Planning

Make sure estate planning documents are up to date and accessible to those who need them; this includes powers of attorney (both financial and medical), trust documents, and wills, etc.  As life changes, your objectives for these documents may change as well.  Reviewing and updating your estate planning documents as needed, will keep them current with your wishes.

This list is not meant to be exhaustive, but rather a starting point to help focus on year-end planning initiatives.  If any questions arise, please reach out to the office.  The Normandy team is here to be of service.  Our CERTIFIED FINANCIAL PLANNER™ professionals are dedicated to being part of your team.  From all of us here at The Normandy Group, thank you for your continued confidence and trust.

Best regards,

Charley Partheymuller, CFP®



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Charles Partheymuller