Weekly Wrap: Annual Planning Calendar

Dear Friends,

Whether you make a New Year’s resolution or simply make a ‘to-do’ list each January, we thought we could help you stay organized with important financial planning considerations in the new year. Taking on all aspects of financial planning at one time may seem daunting. Spreading out your list over the year can make it easier to incrementally achieve your goals while balancing the requirements of everyday life. Of course, The Legacy Foundations is here to help keep you on track and provide guidance along the way! 

January – March 

• Goals: Establish your financial goals for the year!
  • Do you have specific savings goals for the year? If so, how are you planning to achieve them?
  • If you have debt, how will you manage it? What debt should you prioritize paying off first? Consider if you should prioritize savings over paying off the debt.

• Employer Plans: Confirm the amount that you will be contributing to your employer-sponsored retirement plans.
  • If your employer offers a match, then strive to take full advantage of it.
  • The University of Virginia offers unique tax shelter opportunities. Ensure you are familiar with each of them.
  • Annual contributions limits are adjusted from time to time so ensure you are keeping up to date if you plan to max out.
  • If you are over 50, you have the ability to make additional catch-up contributions.

• Required Minimum Distributions (RMD): If you are of RMD age or will reach RMD age in 2025 (73), it is important that you plan out your distributions for the year.
  • If you have charitable goals, consider donating a portion of your annual RMD via a Qualified Charitable Distribution (QCD). This is a great way to give to charity and reduce your taxable income especially if you are unable to itemize due to the standard deduction

April – June

• Taxes: The second quarter starts off with tax season!
  • Ensure you file your tax return by April 15^th.
  • Don’t forget that even if you are requesting an extension, you still need to pay any taxes due by April 15^th.

• IRA/HSA Contributions: April 15^th is also the deadline for contributions to an IRA or HSA for the prior year.

• Beneficiaries: After the dust has settled from taxes, take some time to revisit the beneficiaries you have listed directly on your investment accounts and life insurance policies.
  • Naming beneficiaries directly offers a simple way to transfer assets to heirs.
  • We recommend that you have a contingent beneficiary in addition to primary. Ensure that you fully understand the meaning of your designations. We’re always here to help provide guidance with these important decisions.

• Power of Attorney:  Do you need to update your Power of Attorney to include a successor Power of Attorney?
  • Many people name their spouse and at some point, as we age, having another successor appointed makes sense as you or your spouse may not be able to serve due to an illness or passing. Having a successor helps create continuity for those who would advocate for you when you are unable.

• Wills and Trusts: Do I Need a trust if I already have a will?
  • We are asked this question frequently. The short answer is it depends. Trusts have a specific time and place, and they are not for everyone.
  • Ensure you have an understanding of the spectrum of possible strategies when looking at your estate plan.
  • What is included in an estate for tax purposes?
  • Are you considering minor children? Many people don’t think about their minor children when naming beneficiaries. It’s important to have a solid plan for their well-being.
  • As things currently stand, taxpayers are scheduled to see tax hikes when temporary tax cuts from the 2017 Tax Cuts and Jobs Act (TCJA) sunset after 2025. This will affect things from federal tax brackets and rates to estate and gift tax exemption amounts.
  • If you have questions regarding strategies that may provide relief from estate taxes, we are here to assist.

July – September

• Retirement Savings: Are you taking full advantage of your employer benefits?
  • I can’t think of a better way to build capital for retirement than maximizing contributions through your employer-sponsored 403(b), 401(k) either with tax deductible or ROTH contributions. Which one is best for you? We can help you make those determinations.
    • Keep in mind that you can make both pre-tax and ROTH contributions to your 403(b) or 401(k) plan. These are great savings programs because they are payroll deducted – out of sight, out of mind.
  • Learn more about the investment options you have available to you within your employer plan.

• Retirement Planning: If you are within seven years of retirement, it’s time to take retirement seriously and understand what this transition could look like.
  • Some people spend more time retired than they did working. Have you saved enough to live off for the next 30+ years?
  • Seven years gives you time to work towards a solid plan and we can help get you prepared for this transition.
  • Don’t forget to plan for the fun part of retirement. It is so important that you develop routines to replace those you have been used to while working. Do something new each month whether it’s learning a new game, joining a book club, taking up a new sport – you name it. Keep in mind these activities may affect your retirement plan!

• 529 College Savings Plan: As the kids or grandkids get ready for school, think about establishing or contributing to a 529 College Savings Plan on their behalf.

October – December

• Open Enrollment: As open enrollment season rolls around at work, take the time to review your health insurance coverage and other employer benefits.
• Tax Loss Harvesting: If you have investments that have lost value during the year, consider tax-loss harvesting to potentially lower your tax liability and better position your portfolio going forward.
• RMD Deadline: If you’re 73 or older in 2024, don’t forget to take your annual required minimum distribution (RMD) from your IRA or 401(k) by December 31^st.
• Charitable Giving: Take time to give thanks for another year of financial success. Review your charitable giving program and consider making tax-deductible gifts to charity before the end of the year.

If everything has gone according to plan, then you won’t be sweating that end-of-year bonus to cover the new swimming pool you committed to.¹  Go ahead and pat yourself on the back for a job well done, Griswold.

1 “National Lampoon’s Christmas Vacation”, 1989

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. Economic forecasts set forth may not develop as predicted.

All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

Bonds are subject to market and interest rate risk if sold prior to maturity. Bond and bond mutual fund values and yields will decline as interest rates rise, and bonds are subject to availability and change in price.

Investing in stock includes numerous specific risks, including the fluctuation of dividends, loss of principal, and potential illiquidity of the investment in a falling market.

Investing in foreign and emerging market securities involves special additional risks. These risks include but are not limited to currency risk, geopolitical risk, and risk associated with varying accounting standards. Investing in emerging markets may accentuate these risks.

Investment advice offered through Private Advisor Group, a registered investment advisor and separate entity from The Legacy Foundation.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

The Legacy Foundation and LPL Financial do not offer tax advice.