Year-End Financial Planning Checklist

Year-End Financial Planning Checklist

The end of the year can be busy, but there are a few things you should review every year to make sure you are making the most of your money. Below is a list of items I review with my clients that you may find helpful as this year draws to a close.  


Review Tax Losses

If you have investment positions that have suffered loses, consider selling them to offset gains and reduce taxable income. Remember the IRS only allows $3,000 of losses per year, anymore will carryforward to next year and beyond until used up.

Rebalance Accounts

If you haven’t been regularly reviewing your investment accounts the end of the year is a great time to review your overall investment allocation and make sure it aligns with your goals. 

Consider a Roth Conversion

If you’re unable to contribute to a Roth IRA directly because you don’t qualify, you may benefit from contributing to a Traditional IRA, then converting the funds to a Roth IRA.*

Put Your Investments on Autopilot

If you’re not investing automatically for your goals, year-end is a great time to start. Automatic investing is a simple and powerful tool to build wealth. It saves you time, sets aside money before you can spend it, and reduces the temptation of trying to time the market.

Health & Benefits

Review Your Employee Benefits

Open enrollment is typically in December if you’re employed. Consider taking advantage of all available options, including a flexible spending account, health savings account, life insurance and more.

Check Your FSA

If your employer’s Flexible Savings Account (FSA) plan does not allow rolling money over into the next year, make sure you spend the balance on qualified expenses so you don’t lose out.

Review Your HSA Contributions

If you are eligible to contribute to an HSA, maximize your tax deduction but putting in the maximum amount. The 2021 HSA contribution limit is $3,650 for an individual or $7,300 for a family.

Income Tax Planning

Adjust Your Withholdings

Adjust income tax withholdings and/or estimated payments to avoid a big refund or tax owed.

Reduce Your Income

Reducing your taxable income can save you quite a bit. If you are eligible, consider contributing more to your retirement plan and HSA. 

Prepay Charitable Gifts

Thinking ahead about next year’s charitable gifts may allow for a larger tax deduction this year, if you pay out the money this year of course.

Retirement Planning

Review 401k and IRA Contributions

Maximizing the amount you contribute takes advantage of available tax deductions and employer matching contributions. 2021 Contribution limits:

  • 401(k): $19,500 (additional $6,500 catch up for 50+ years old) 
  • SIMPLE: $13,500
  • IRA: $6,000 ($1,000 catch up for 50+ years old)
  • SEP IRA: 25% of income up to $56,000

Increase Your Savings

If you are not already maximizing your 401(k) contributions, consider increasing the amount you are contribution by 1% a year until you do. 1% won’t make a big difference in your paycheck but can boost your retirement savings in the long run. 

Estate Planning

Review Beneficiaries

Double-check that changes or updates are not needed on your accounts. It’s all too common to leave an ex-spouse, for example, assigned accidentally.

Review Estate Plan

Ensure your overall estate plan, including your will, trust and health care power of attorney, are current.

Review Insurance Policies

Review your home, auto and life insurance policies to determine if you have enough coverage or if deductibles need to be adjusted.

Give Gifts

You can give someone up to $15,000 per year and it won’t impact your lifetime estate tax exemption amount.  Couples can double this amount to $30,000 if they file for joint gifting.

College Planning


Have your adult child sign a Medical Directive in the event a major health issue happens at college.

College Funding

Open and fund a 529 account or make contributions if you have a 529 currently.

Track Expenses

Keep record of all college expenses and reimburse from 529.

Plan strategically

Consider contributing money to 529 plan before paying college directly for state tax deduction.


Review Your Spending

Time flies and so does money. That’s why regularly reviewing your spending is a great habit to develop. The end of a year is a great time to reflect on your spending and create a plan for next year.

Plan for Life Events

A job change, home or car purchase, surgery or other life event requires financially planning ahead, if possible. 

Establish a Financial Plan

It is tough to know if you are making smart financial choices if you are not making them with respect to achieving your specific financial goals.  If you don’t have a financial plan to serve as the basis of your financial decision-making, it is a good idea to get one.

The most important decision you can make as the year comes to a close is to speak with a financial professional to ensure everything is in order with your overall financial situation. There is still time left in the year to take action if needed, but time is running out.

Author:  Daniel P. Lash, CFP®, AIF® is a partner at VLP Financial Advisors and the former President of the National Capital Area Chapter of the Financial Planning Association (FPA). He believes that strategic planning is the key to creating, protecting, and growing wealth. 

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Dan Lash is a Registered Representative of and offers securities and Advisory Services through Cetera Advisor Networks LLC, member FINRA/SIPC a Broker/Dealer and Registered Investment Advisor. Cetera is under separate ownership from any other named entity. 

*Converting from a traditional IRA to a Roth IRA is a taxable event. A Roth IRA offers tax free withdrawals on taxable contributions. To qualify for the tax-free and penalty-free withdrawal or earnings, a Roth IRA must be in place for at least five tax years, and the distribution must take place after age 59 ½ or due to death, disability, or a first time home purchase (up to a $10,000 lifetime maximum). Depending on state law, Roth IRA distributions may be subject to state taxes. 

For a comprehensive review of your personal situation, always consult with a tax or legal advisor.  Neither Cetera Advisor Networks LLC nor any of its representatives may give legal or tax advice.

VLP Financial Advisors

8391 Old Courthouse Rd., Suite 203
Vienna, VA 22182


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