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7 Things to Consider Before Year-End

It’s almost here… 2019! Following are a few of the things that you should be considering before year end.

For those of you who are 70.5 or older in 2018, Required Minimum Distributions from your IRA (and in some cases from your 401(k)) have to be completed by 12/31/18 to avoid a 50% penalty! Yikes!

Maximizing 401(k)’s:
The maximum you can contribute to a 401(k) in 2018 is $18,500 for those under 50 and $24,500 for those over 50. You have until year end to make up any shortfall!

Roth Conversions:
Maybe you find yourself in a low tax bracket this year and it makes sense to covert some IRA money into a Roth IRA. If so, then it needs to be done by 12/31/18. Check with your CERTIFIED FINANCIAL PLANNER™ professional and your CPA to see if this move is right for you.

The annual gifting limit for 2018 is $15,000. This is the amount that you can gift to each individual without having to complete a “gift” tax return. It has typically been used as a way to transfer wealth to others during life to reduce estate tax upon death and not have to do the paperwork. Although, at present, your estate would have to exceed $11,200,000 for a single person and $22,400,000 for a couple for estate tax to be applied. In any case…the gift needs to be made before year end.

Tax-Loss Harvesting:
Speak to your CFP® professional and your CPA regarding any opportunities for capital-loss-harvesting or in some cases, capital-gain-harvesting, that can be taken advantage of before year end.

Flexible Spending Accounts:
If you don’t have an H.S.A., but rather a Flexible Spending Account, then be sure to use up the balances before year end.

Adjusting Your 401(k) for the First Payroll in January:
Salary deferral limits are increasing by $500 in 2019, so you will be allowed to put in as much as $19,000 for individuals under 50 and $25,000 for those over 50. Be sure to let your HR department know if you need to make an adjustment.




Portia L. White is a CERTIFIED FINANCIAL PLANNER™ Practitioner, Vice President and a Senior Advisor at Whelan Financial. With over a decade of experience, Portia continues to push the envelope in her field, extensively studying Social Security and Medicare planning.

Follow her on LinkedIn @PortiaWhite


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