Advisors Year-End Checklist – Are You Prepared?

Can you believe Labor Day is behind us? With the end of the year approaching, here is a checklist of items to keep in mind when speaking with your clients this fall:

  • 401(k)/403(b): Check-in with clients to see if they can max-out their company retirement plan contributions before the year ends, while still allowing for extra spending around the holidays. The contribution limits recently increased; for the 2019 tax year, the employee limit is $19,000.
  • Roth IRA: For anyone under the age of 50, the contribution limit for a Roth IRA in 2019 is $6,000. For anyone age 50 and over, the limit is $7,000. If a client’s income exceeds the limit, explore a conversion from a non-deductible traditional IRA.

  • Charitable donations: Giving cash or other assets to a charity the client is passionate about is a great way for them to minimize their tax liability. Having these conversations in September or October will result in less stress leading up to the holidays.

  • Rebalance client portfolios: Take advantage of market volatility rather than waiting for an arbitrary date to rebalance. A good rule of thumb is to rebalance when an allocation becomes +/-5% of the original target weight on an absolute basis, or a 25% change in size, whichever is less. Plan ahead for illiquid asset classes like real estate, interval funds and other types of hedge fund and private equity vehicles.

  • Tax loss harvesting: Losing positions can be sold to offset taxable income, usually up to a $3,000 limit.

  • Review clients’ Required Minimum Distributions (RMD): Clients with accounts such as inherited IRAs may have to take a distribution before year end.

  • Health Savings Accounts & Flexible Spending Accounts: Contributions to HSAs are another great way to limit tax liability. Be sure to ask your clients to check whether their Flex Spending Account allows balance carryovers. If not, they may forfeit their funds.

  • Client Appreciation: The holidays present a great opportunity to show your clients how much you value your relationship with them. Be creative and start planning something special!


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