Year-End Financial Planning: 2024

Written by Canty Financial - Published on October 24, 2024

As the year winds down, it's the perfect time to reflect on your financial progress and take advantage of key opportunities that can help you optimize your financial health. Year-end planning is not just about organizing your finances; it's about setting yourself up for success in the coming year. In this edition, we’ll guide you through the essential components of year-end financial planning.

Income Tax Planning

Income tax planning is a crucial part of your financial strategy as we approach the end of 2024. It’s time to assess your tax situation and make strategic moves to minimize your tax burden.

Consider the following strategies:

  • Review Tax Withholdings: It’s a good time to check whether your tax withholdings are in line with your income and deductions. If necessary, adjust your withholdings before year-end to avoid underpayment penalties. Additionally, Q4 estimated tax payments are due by January 15th.
  • Maximize Retirement Contributions: Be sure to contribute the maximum to your retirement accounts (401(k), IRA, Roth IRA) to take full advantage of any tax benefits.
  • Tax Loss Harvesting: If your portfolio includes investments with unrealized losses, selling those investments can offset any capital gains you may have incurred, reducing your overall tax liability. For our clients, we utilize 55IP to automate tax-smart rebalancing and harvesting opportunities, ensuring tax efficiency while aligning with your investment goals.
  • Charitable Giving: Consider strategies like Qualified Charitable Distributions (QCDs) or donating appreciated securities to maximize tax efficiency on charitable contributions.

Understanding current tax laws and any upcoming changes is critical to ensuring you make informed decisions to maximize your financial health.

Investment Portfolio Review

Your investment portfolio is a key element of your long-term financial success. The end of the year provides an excellent opportunity to assess its performance and make necessary adjustments.

  • Rebalance Your Portfolio: Market fluctuations can cause your portfolio to drift from its intended asset allocation. We regularly rebalance client portfolios, typically on a quarterly basis, to ensure that your asset allocation remains aligned with your risk tolerance and financial objectives. This disciplined approach helps manage risk and maintain your long-term strategy, even in volatile markets. Read our most recent market commentary and portfolio positioning here.
  • Ensure Diversification: Propper diversification is crucial to protect your portfolio from unnecessary risks. This means considering a mix of asset classes (stocks, bonds, real estate, and alternatives) and ensuring global diversification across regions and sectors.
  • Align Investments with Financial Goals: As your portfolio grows, it's essential to revisit your goals. Are you prioritizing capital preservation, legacy planning, or continued growth? Your portfolio should be adjusted to match these objectives, whether it's through strategic tax planning, income generation, or risk management.

Click below to view our current fact sheet on Canty Financial Model Portfolios

Retirement Planning

Whether you are retired or still working, year-end is a great time to evaluate your retirement plan and ensure you’re on track to meet your goals.

Key strategies include:

  • Review Your Retirement Plan Investments: Assess how your retirement funds are invested and evaluate the level of risk in your portfolio.
  • Reassess Retirement Goals: Whether you're nearing retirement or still have years to go, it's essential to continually reassess your retirement plans and adjust your strategies if necessary.
  • Optimize Withdrawal Strategies: If you’re already drawing from your retirement accounts, review your withdrawal strategy to minimize taxes.
  • Maximize Employer Matches: If you're still working, make sure you’re contributing enough to your 401(k) to take full advantage of any employer matches.

Wealth Transfer and Legacy Planning

Effective wealth transfer planning can ensure your assets are distributed according to your wishes while minimizing taxes and avoiding probate.

Consider these key steps:

  • Update Estate Plans: Review your estate plan and ensure all documents are up to date, including your will, beneficiaries, and trusts.
  • Avoid Probate: Use account titling, beneficiary designations, transfer-on-death provisions, or trusts to streamline the transfer of assets and avoid probate.
  • Consider a Trust: Trusts can be a powerful tool for simplifying wealth transfer, managing long-term care, or minimizing estate taxes.

Our team is here to help you navigate these year-end financial planning strategies and make informed decisions for 2025 and beyond. Please don't hesitate to reach out for personalized advice on your tax planning, investments, retirement, and estate planning strategies.

We’re always open to new clients who could benefit from our comprehensive financial planning. If you know someone seeking personalized financial guidance, we’d be honored by your referral—it's the highest compliment we can receive.

We wish you a prosperous year ahead and look forward to continuing to support your financial success!

Bill Canty, CFP®, CPA, Financial Planner

Ed Canty, CFP®, Financial Planner

Joe Canty, CFP®, Financial Planner

Tina Alteri, CPA, Tax Advisor

Maureen Walsh, EA, Tax Advisor

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