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Financial Goals

Is Your Year-End Financial Plan Missing Something?

Q4 is the carpe diem quarter. You’ve got nine months of the year behind you, the blank slate of 2016 around the corner.

Articles by MP Dunleavey

By MP Dunleavey
  |  Published: October 28, 2014

The lull before the holidays (and during open enrollment) is the perfect time to adjust your savings, make a tax plan, and more.

To get yourself in shape for 2016 with a smart year-end plan, tackle these seven crucial areas now.

No question: Q4 is the carpe diem quarter. You’ve got nine months of the year behind you, the blank slate of 2016 around the corner—and a small window of time to tackle financial chores before the holidays hit. Bonus: Now that it’s open enrollment season, you can consider maxing out (or adjusting) your employee benefits.

Yep, there’s a lot to do, and you may not nail every item on your To Do list (who does?). But this primer will make sure you don’t miss anything crucial, so that you’re in great shape when the New Year comes dancing in.


Obviously, it’s better if you’ve been maxing out your 401(k) contributions throughout the year because you stand to gain quite a bit more. But it’s not too late to contribute what you can for 2015. Even bumping up your savings rate by 1% can add up in years to come. But if you are already saving to the max, note that the 401(k) limit for contributions for 2016 remained unchanged at $18,000, or $24,000 if you’re over 50.

Hint: If you’re earning $100,000, a 1% savings increase comes to an extra $1,000 per year, i.e., about $80 a month or $40 per bi-weekly paycheck—and that’s pre-tax, remember. If you were saving only post-tax dollars, you’d need about $66 in income to net that $40 in savings, assuming a 39.6% income tax rate.

If you have an IRA, you can make your 2015 contributions until April of next year, but again an early IRA contribution is more profitable in the long term.

Expecting a crisis soon? Of course not. That’s why you need to set up a safety net fund now, so you’re ready for the inevitable curveballs.

IRAs and rollover

If you left a job and your old 401(k) behind (or if you have an orphan IRA somewhere), take the time now to think about consolidating accounts. Consider rolling over your old 401(k) to an IRA; and/or combine IRAs.1 You’ll have more control over your asset allocation, total contributions, paperwork, fees—and (by reducing your hassle factor) your stress levels.

Review beneficiaries

While you’re digging into your benefits, be sure to take your former spouse off your life insurance. No joke: having the wrong beneficiary is a common mistake people make on insurance policies and even retirement or bank accounts.

Pre-tax savings for health care

A quick reminder about tax-advantaged healthcare accounts, like flexible spending accounts (FSAs) and health savings accounts (HSAs): Under the Affordable Care Act, your FSA contributions are capped at $2,550 currently. But the funds, which you save pre-tax, are still considered use-it-or-lose-it by the end of the calendar year.

HSA funds have different caps for individuals and families ($3,350 and $6,750, respectively), but you can roll over HSA funds from one year to the next. The catch-up contribution for those over age 55 is $1,000.

If you have an FSA, find out whether your company offers a grace period into the new year (typically through mid-March) to spend down your account.

Before you waste your tax-free savings on eyeglasses you don’t need, check out what you can buy with FSA money—with and without a prescription. If you decide to get Lasik surgery or the dental work you’ve been putting off, schedule those procedures now. You’re not the only one trying to make the most of your FSA—and doctors get busy this time of year.

Given that most people put about $1,400 into their health care savings—and forfeit 3% on average, according to the Mercer National Survey of Employee-Sponsored Healthcare Plans, you might want to adjust how much you save for next year.


Using these final three months to maximize tax deductions across the board—and plan your investing tax strategy—is a Q4 must.

  • Consult with your accountant on how to structure tax losses to offset gains for this year.
  • If you own a rental property, it might make sense to complete any deductible repairs or upgrades to reduce taxable income.
  • If you’re self-employed, there are a number of legitimate business expenses that can be deducted or amortized to lower your taxable income (equipment, advertising, travel, research, etc.)

Charitable contributions

If you typically find yourself scrambling to make good on your vow to do good when December rolls around, plan your charitable contributions now. This gives you time to select recipients, and decide whether you want to give cash or assets.

It’s worth it to invest the time: Studies show that giving money to causes that mean more to you—not just rote donations—make you happier.


Speaking of happiness…take full advantage of the pre-holiday lull to contemplate next year. What do you want fiscal year 2016 to look like for you? We strongly advise:

  • Optimized and automated savings
  • Spending on experiences, not things
  • Peace of mind

Check in and let us know how you’re doing.

When deciding whether to roll over a retirement account, you should carefully consider your personal situation and preferences. The information on this page is being provided for general informational purposes and is not intended to be an individualized recommendation that you take any particular action.

Factors that you should consider in evaluating a potential rollover include: available investment options, fees and expenses, services, withdrawal penalties, protections from creditors and legal judgments, required minimum distributions, and treatment of employer stock. Before deciding to roll over, you should research the details of your current retirement account and consult tax and other advisors with any questions about your personal situation.

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