Adam Gentry, CFP®
With the end of the year in sight, this checklist can help you prepare for a productive annual year-end conversation with your private wealth management team.
Share life changes Inform your wealth management team of life changes such as a marriage, divorce, birth or adoption, job promotion, or retirement. These events may have financial, tax, and legal implications. Also, notify your wealth management team of any major purchases you have made, expenses you have incurred, or any large transactions you are planning for. This might include costs associated with a new business, a second home, or renovations on an existing property.
Evaluate investment performance The end of the year is a logical time to evaluate the performance of the assets in your investment portfolio with your wealth management team. If changing market conditions caused the asset allocation of your investment portfolio to deviate from your goals, consider working with your wealth management team to ensure your investments still support your long-term financial plan.
Maximize and manage your retirement plan contributions Review your retirement plan contributions and consider maximizing them before the end of the year. If you are age 50 or older and your plan allows, you might take advantage of catch-up contributions to your IRA or employer-sponsored accounts. In 2024, the limit for catch-up contributions is $1,000 for IRAs and $7,500 for many employer-sponsored accounts.
Take your required minimum distribution (RMD) if applicable The SECURE 2.0 Act of 2022 changed the age RMDs must begin to age 73 for taxpayers that reach age 72 after December 31, 2022. Roth IRAs are not subject to RMDs until after the original account owner’s death. For 2024 and later years, RMDs from designated Roth accounts in a 401(k) or 403(b) plan are no longer required.1
Make charitable contributions Make desired charitable contributions by year end if you plan to itemize deductions on your tax return. Be sure you have appropriate documentation for your tax records. Review the source of your charitable donations, whether cash, securities, or gifts-in-kind to maximize your tax benefits.1 Consult with your wealth management team regarding how charitable contributions may support your estate and tax planning goals.
Conduct a year-end tax review Consider consulting your tax advisor regarding:
- The potential advantages of Roth conversions.
- Changes to your estimated taxes and withholding to avoid underpayment penalties.
- Bunching itemized deductions such as charitable contributions or medical expenses into specific years.
- Realizing any portfolio losses to offset gains and potentially reduce your tax liability.
- Reviewing your portfolio for potential capital gains distributions.
- Understanding potential impacts of tax legislation.
Review your estate plan Your wealth management team, in coordination with your estate planning attorney, can review your estate plan to ensure your plan is aligned with your current personal and financial goals. If it has been some time since you have reviewed your estate plan, life changes may necessitate adjustments to your plan. It is particularly important to review your estate plan if you have relocated to another state, as your new domicile’s estate and tax laws may have an impact on your plan.
Review your insurance policies As family circumstances change, such as kids graduating from college, an unexpected health challenge, or assuming responsibility for an aging parent, so might your financial responsibilities. An insurance review to understand if you are underinsured, overinsured, or paying too much for insurance can ensure you are adequately prepared for the financial impact of unforeseen changes to your family’s health or an unexpected loss.
Update your beneficiaries and contact information Ensure the beneficiaries on your investment and retirement accounts, insurance policies, and all legal documents are current. Update your email addresses, phone numbers, and mailing address.
Prepare for your financial future with Commerce Trust
At Commerce Trust, we can assist with your year-end planning efforts by addressing your unique personal and family financial situation and retirement plan. Our wealth specialists across multiple disciplines such as financial planning, retirement planning, and tax management* collaborate as a team to deliver a comprehensive financial plan that is tailored to your goals.
Contact Commerce Trust today if you have any outstanding questions related to your year-end financial plan review.
1 Contact your tax advisor.
*Commerce does not provide tax advice to customers unless engaged to do so.
Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the certification marks CFP® and CERTIFIED FINANCIAL PLANNER™ in the United States, which is authorizes use of by individuals who successfully complete CFP Board's initial and ongoing certification requirements.
The opinions and other information in the commentary are provided as of November 19, 2024. This summary is intended to provide general information only, and may be of value to the reader and audience
This material is not a recommendation of any particular investment or insurance strategy, is not based on any particular financial situation or need, and is not intended to replace the advice of a qualified tax advisor or investment professional. While Commerce may provide information or express opinions from time to time, such information or opinions are subject to change, are not offered as professional tax, insurance or legal advice, and may not be relied on as such.
Diversification does not guarantee a profit or protect against all risk.
Commerce Trust does not provide advice related to rolling over retirement accounts.
Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.
Commerce Trust is a division of Commerce Bank.
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