Six Money Moves to Make Before Year’s End

BusinessSet yourself up for financial success in 2016.

By Stephanie Yates

Before you know it, 2016 will be here. Now is a great time to take some time to tend to a few money matters in preparation for the New Year. Some of the items on this list have tax implications if you don’t get them done before Dec. 31.  Others are simply once-a-year items, so why not get them out of the way now?

Donate to Charity

Charitable contributions made to qualified charitable organizations must be paid in cash or other property by Dec. 31 in order to be deductible on your itemized tax return. Be sure to hold on to your receipts! If you give property worth more than $250, you will need donation receipts that include the name of the organization, the date, and the location of the charitable contribution and a reasonably detailed description of the property. If you give property with a fair market value of more than $500, you will need to file an additional form.

Max Out Retirement Contributions

For 2015, your total contributions to all of your traditional and Roth IRAs cannot be more than $5,500 or your taxable compensation for the year. If you are 50 or older, you can contribute up to $6,500. If you are over 70 ½, you can’t make regular contributions to a traditional IRA. If you file a joint return, you may be able to contribute to an IRA even if you did not have taxable compensation as long as your spouse did and the amount of your combined contributions is less than the taxable compensation reported on your joint return. The bottom line: if you have a little extra cash lying around, why not top off your retirement account?

Use Flexible Spending Account (FSA) Money

If you have an FSA through your employer, you can have up to $2,550 per year deducted from your pay before taxes to pay for copayments, deductibles, some drugs, and some other health care costs. Generally, you have to use any money that you have set aside in your FSA by the end of the year. However, your employer may offer you a grace period or carry-over. You may want to schedule that routine checkup that you’ve been putting off. Make sure you know your plan’s provisions so that you don’t lose any of your hard-earned cash!

Adjust for Life Changes

Did you get married or divorced recently? Did you add a new dependent? Did you move? Consider how any recent life changes may affect your financial picture. You may want to update your beneficiaries on your life insurance policies. You may want to adjust the tax withholdings from your pay. Is it time to start making contributions to a college fund? There may be a benefit to tweaking some of these items before year-end.

Check Your Credit

There is no hard and fast rule that you should check your credit before the start of each new year, but maybe there should be! It is wise to check your credit each year in order to be aware of your credit profile and check for any evidence of fraud or identity theft. In fact, you are entitled to one free copy of your credit report each year from each of the three major credit reporting agencies; Equifax, Experian, and TransUnion. If you really want to be vigilant about what goes into your credit file, consider checking one agency every four months since each agency could provide a slightly different report. Go to to get started!

Rebalance Your Portfolio

This one isn’t required either but is certainly a good idea. Periodically, it makes sense to review your investment portfolio and determine if your current investments still meet your needs.  Generally speaking, it is wise to take on less and less financial risk as we get closer to retirement. Rebalancing your investment portfolio periodically gives you an opportunity to assess the riskiness of your portfolio and determine if that is the right amount of risk for you. You may want to enlist the help of a trusted investment advisor and make sure your portfolio is ready for the New Year!

As this year comes to a close, my most important move is to thank you for reading this column! I’ve enjoyed our adventures together thus far and wish you a safe and prosperous 2016.

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