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Your year-end financial planning checklist


The year’s end provides the perfect opportunity to review your financial life and make sure you are on track towards your goals.

financial checklist

Before the year comes to a close, it is always a smart idea to run through a checklist of financial planning items. As 2020 has certainly proven, a lot can happen in a year, and it is important nothing slips through the cracks. You should update your accounts and check in on where you stand with many of the goals you set at the beginning of the year.

Check on the status of your emergency fund

An emergency fund should, in general, have 3 months of necessary expenses saved in cash if you are a dual income household. That number increases to 6 months, to even a year, if you are a single income household or one person’s income is relied upon to provide for your family’s standard of living. It is always a good idea to review your budget to see if any changes to your necessary expenses occurred. If your expenses increased or if you had to dip into your emergency fund for the year, now is a good time to focus on replenishing it.

Max out your retirement accounts

The 2020 maximum contribution amount for 401(k)s and 403(b)s is $19,500 if you are under age 50 and $25,500 if over age 50. Check your contribution history for the year to ensure you are on track to max out by year-end. If you are not on track, you may want to consider increasing your withholding percentage in the final month to ensure you are maximizing this tax-advantaged account. 401(k) & 403(b) contributions need to be made by year-end. IRAs on the other hand can be funded up until the tax filing deadline. The maximum IRA contribution in 2020 if you are under age 50 is $6,000 and $7,000 if over age 50.

Use the remaining money in your Flexible Spending Accounts (FSAs)

Most health care and dependent care FSAs have a use-it-or-lose-it feature to them where any remaining balance in the account at year-end is forfeited back to the plan. Some employers offer a grace period into the spring of the following year or a $500 carry-over from one year to the next, but most do not. If you have unused funds in your healthcare FSA, consider scheduling an end-of- year checkup to try and empty the account. Leftover funds in a dependent care FSA could be used for after-school programs and camps.

Make contributions in your children’s 529 accounts

Many physicians want to save for their kids’ college educations. These accounts have great tax benefits if the funds are used for qualified educational purposes. Make sure you continue to fund these accounts. The cost of college continues to rise and you need to keep pace. Additionally, some states offer a state income tax deduction if you are a resident of that state and contribute to their 529 plan.

Designate those individuals to whom you wish to gift assets

Whether for estate planning purposes or out of generosity, remember to make those gifts you planned this year. The annual gift tax exclusion is $15,000 for 2020 ($30,000 for married couples) and you can gift this amount to as many individuals as you would like without having to pay gift tax or have it count against your lifetime gift and estate tax exemption.

Make charitable donations

Giving to charity is not only generous but may also provide some tax benefits. While any gift is surely appreciated, consider giving appreciated investment assets instead of cash. Gifting appreciated assets like investments helps you avoid paying capital gains tax, and you get to claim a deduction for the full value of the donated asset. Due to their charitable status, the charity can sell the appreciated asset and not pay tax on it. Be aware— under the current tax law, you may need to donate a substantial amount of assets to be eligible to claim a charitable deduction on your tax return.

Harvest investment losses

The markets in 2020 have been on a bit of a roller coaster. If you have investments in a taxable account such as an individual or joint account, and those investments are currently at a loss, consider selling them to capture the loss. Captured losses can be used to cancel out taxable gains elsewhere. You can also deduct up to $3,000 of net capital loss (or $1,500 if you are married and file separately) against ordinary income if your losses exceed your investment gains. The IRS allows you to carry unused excess loss forward to future years to cancel out future gains or deduct from future income.

Update Beneficiaries

Changes in your personal life are a reason to review your beneficiaries on your life insurance and retirement accounts. If you recently got married or divorced, had a child, or had a death in the family, you may need to revise your beneficiaries. You may also need to update your Will and Power of Attorney documents.

The year’s end provides the perfect opportunity to review your financial life and make sure you are on track towards your goals. The above checklist is just a few of the financial items you may need to address. Your financial and legal advisors can run through a more comprehensive checklist of planning options based on your personal circumstances.


Effective June 21, 2005, newly issued Internal Revenue Service regulations require that certain types of written advice include a disclaimer. To the extent the preceding message contains written advice relating to a Federal tax issue, the written advice is not intended or written to be used, and it cannot be used by the recipient or any other taxpayer, for the purposes of avoiding Federal tax penalties, and was not written to support the promotion or marketing of the transaction or matters discussed herein.

The information contained in this report is for informational purposes only. Any calculations have been made using techniques we consider reliable but are not guaranteed. Please contact your tax advisor to review this information and to consult with them regarding any questions you may have with respect to this communication.

MEDIQUS Asset Advisors, Inc. does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

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