In my house, we do our grocery shopping once a week. My wife and I will sit down on Sunday, explore recipe options, and decide what to buy at the store to make it through the week.
The problem with the grocery store is that there are so many options. Organic or regular? Fresh or frozen? American or Swiss? Not to mention the items in the store that look so attractive when we’re walking up and down the aisles. If I go to the grocery store hungry, my bill seems to double somehow!
So how do we avoid the lure of the cookies, frozen pizza or candy at the check out counter? We make a list and stick to it. By narrowing our focus, we’re able to block out the distractions and get in and out efficiently. While we may not be able to find everything on the list (why would the baking nuts and canned nuts not be in the same aisle?!), we’ll at least know our plan of attack when we walk through the doors.
To narrow our focus as we near the end of 2021, we have developed a “grocery list” of items you need to take care of before December 31st. An “End of Year Checklist”, if you will, that will help guide you up and down the aisles of year-end financial planning. While some will be financially “gluten-free” and need alterations or addendums to this list, it’s a great place to start.
So, grab a pencil and start crossing stuff off.
Insurance
- Make sure your home, auto, health, umbrella, life, and any other insurance policies reflect the coverage you need. With salaries and home prices on the rise, you may need to make slight adjustments. Insurance needs to protect you in the event of a loss.
Taxes
- Contribute to retirement plans (401k, IRA, Roth IRA, Simple IRA, etc.)
- Take advantage of any available tax deductions
- Harvest losses in your portfolio where it makes sense
- Meet with your CPA before Thanksgiving to maximize tax strategy
- If you are over 72, make sure you take your Required Minimum Distribution (RMD) before January 1st
Health Savings Accounts
- Check with your FSA provider to see if you can roll over the balance into 2022. If you can’t, use it. Don’t lose it.
- If possible, max out your HSA for 2021 if you are covered by an eligible health plan. The contribution limit is $3,600 for an individual and $7,200 for a family. Contributions are tax-deductible, grow tax-free, and are distributed tax-free for qualified medical expenses. After age 65, distributions can be taken for any reason, but are subject to ordinary income tax.
Gifts
- If you are gifting to an individual, complete the gift by the end of 2021 to take advantage of the annual exclusion ($15,000 per giver, per recipient). If you wish to give more, consider giving at the end of 2021 and beginning of 2022.
- Contribute to College Savings accounts
- If you are philanthropic, make sure you gift to 501(c)(3) organizations before the end of the year to reap the tax benefits.
Spend Time with Family
This last topic isn’t as much of a check off item as it is a call to action. A lot of families have spent less time together than ever before due to the pandemic. Be intentional about spending time with those you love. Take the vacation. Invest in your family. Love and cherish those around you.
Here at McCall & Associates, we have the unique privilege to help families walk through this checklist and so much more. If you have a need, feel free to reach out to us here, or give us a call at 615.370.4040.