Test Your Knowledge of Year-End Financial Planning.

(Updated: 12/09/2019)

As 2019 draws to a close, it’s a good time to review your financial plans and goals to prepare for the year ahead, as well as find ways to maximize your savings.

Which of the following tasks should you perform before year-end?

  1. Review your retirement contributions to determine if you are maximizing any employer match.
  2. Check your flexible spending account (FSA) for remaining funds, which you may lose if they remain unused before year-end.
  3. Reassess your charitable goals, and consider making a donation to help support your favorite cause.
  4. If you are 70½ or older, review your strategy for required minimum distributions (RMDs) to determine what you may need to take from your IRA or 401(k) plan in the coming year.

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Answer: All the above

Unless you have enough deductions to itemize your taxes above the standard deduction threshold, you may not be able to deduct your charitable contributions. The amount of the charitable deduction will be limited based on your income and the type of asset you contribute.

Taking the time to review your financial plans can help you save money in the new year.

  • Employer match. An employer match can help increase your retirement savings. Review your retirement contributions to ensure that you are taking full advantage of any employer match offered.
  • FSA account. An FSA account allows you to set aside funds on a pretax basis to be used for medical expenses. If the funds are not used before year-end, you will likely lose them. Check with your employer to see if your FSA plan has a grace period.
  • Charitable giving. Nearly one-third of all annual giving occurs in December, and charities depend on that giving. Consider making a gift to your favorite causes. If you itemize deductions for taxes above the standard deduction threshold, you may be eligible to deduct a portion of your charitable contributions.
  • RMDs. Except for the year you turn 70½, RMDs generally must be taken out of your IRA or 401(k) plan by December 31 of the current year to avoid a tax penalty.

It is a good idea to keep bank records or written records of your charitable gifts. Deductible charitable gifts of $250 or greater will require a written receipt confirming your contribution to the charity and whether any goods or services were provided to you. Depending on the amount of the gift, additional documentation or a qualified appraisal of the property gifted may be required. Refer to your tax advisor for applicable rules and required supporting documentation for your deductible charitable gifts.


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Fact vs. Fiction

We understand that it can be tricky navigating the world of personal finance. Everyone seems to have an opinion, and it can be hard to know what to believe. We created this series as a way to present and debunk some of the most common financial myths.

Fiction: If I have a properly executed will, my estate won’t need to go through probate.

Fact: Because probate is the legal process for transferring property from a decedent to designated beneficiaries, all property remaining in a decedent’s name at his or her death must go through probate to be accessed—even if it is clearly bequeathed in a will. This can take months or years, depending on state procedures and the estate’s complexity. If a decedent owned property in multiple states, probate would have to be opened in each state in which property is located. There are, however, many ways to avoid probate, including beneficiary designations on accounts, a transfer on death provision, and holding assets in a trust. In addition, assets held jointly will transfer to the surviving owner without going through probate.

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Last Updated: 12/23/2019