Year End Financial Planning Strategies

November 1, 2023

Many set health and fitness goals for the new year, but how about financial goals? Now is a great time to review where your finances stand for this year and begin thinking about your financial goals for next year.

Here are a few steps to help with wrapping up the year and preparing for a successful 2024:

Review Your Automatic Deposits

Do you have automatic deposits going into your 401k or your savings account?

If so, now is a good time to make sure those deposits are still set up correctly. You want to make sure the amounts are still correct but maybe you want to consider increasing the amounts. At this point in the year, you might have received a bonus or bump in pay, adjusting those direct deposits is a great way to take advantage of saving more without even noticing.

If you already maxed out your 401k for the year, make sure your contributions are set to reset in the new year. You can confirm this with your plan administrator.
Be sure to reassess and adjust your contributions along the way.

Pay Down your Debt

Have you spent some time checking on your budget?
It is important to review your spending and where your expenses stand for the year. Being aware of your fixed and optional expenses and taking the time to review them annually will help you improve future financial decisions. Identify areas where you can cut spending and consider allocating those funds towards savings goals.
With interest rates continuing to increase, now is a great time to use some extra savings to pay down your debt. Consider making an extra payment and benefit from less interest accumulating. We recommend you pay down your debt with the highest interest rate first.
Being intentional and going through the steps of reviewing and maintaining your budget can make all the difference in keeping you on track.

Max Out Your 401k

Are you contributing the max to your 401k?
By maximizing your contributions to retirement, you are saving for the future and may also be reducing your taxable income today or in the future. If you have a qualified retirement plan at work (like a 401k, 403b, or others), employers will often match part of your contributions. You want to make sure you’re at least contributing enough to receive the employer match. You do not want to lose out on the opportunity of receiving those additional contributions.

If you’re contributing to a traditional 401k, your contributions go in pre-tax and reduce your income and your taxes paid for the current year. If you’re contributing to a Roth 401k, your contributions go in after-tax, but distributions are considered tax-free– within certain regulations– in the long run. There are no income limitations when contributing to a Roth 401k.

Now is a great time to check that you’re on track to contribute the maximum amount to your 401k. You can contribute up to $22,500. Note: some employer matches are only paid if you contribute each paycheck, so if you hit your annual 401K maximum before year-end, you will miss the employee match in your remaining paychecks. Maxing out your 401k each year is a great way to ensure you stay on track for saving for your future goals.

Before the year wraps up, spend some time checking in on these few items and consider what changes you need to make to prepare for a successful 2024. Your future self will appreciate you making your goals a priority.

Susie McLane
Managing Director, Senior Wealth Advisor

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