Enjoying the Ride: Year end investment planning and new year’s resolutions

By Michael Hilliard EBS COLUMNIST

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As we approach the end of 2024 and look to 2025, it’s a perfect time to perform a year-end review, and strategize to make positive change in the new year.

And it all starts with an honest assessment of your personal financial situation, benchmarked against the six areas of investment planning: financial position, insurance, tax strategies, investment management, retirement planning, and estate planning strategies.

You may ask yourself a barrage of questions as you explore each category. Over the past year, did you stick to a budget, increase retirement plan contributions, supplement your cash reserve, and decrease debt? Have you explored—and do you understand—your employee benefits, such as your Health Savings Account, insurances, and your employer-sponsored retirement plan? Do you have the correct amounts and types of insurance coverage across the various lines of risk management? Are you on track to maximize (with potential catch-up provisions) and take advantage of any employer match in your retirement plans, and do you qualify for deductible traditional IRAs or Roth IRAs? Have you considered Roth Conversions or a Back Door Roth IRA strategy, if your Adjusted Gross Income (AGI) disallows a standard contribution? Did you not only file your taxes but strategize about how to reduce them in the future? Remember, tax preparation takes place once per year, but tax planning should be a continuous process. Do you have non-qualified (non-IRA) assets in your portfolio that can be sold to harvest tax losses? And in assessing your holdings, have you constructed a tiered approach for short, mid, and long-term planning? Is your portfolio properly diversified across the various asset classes and investment styles, and further segmented by product and company? Are you participating in 529s or Coverdell accounts to plan for college? Have you performed a retirement planning review, essentially projecting your assumed retirement expenses, inflation-adjusted, against what future income you expect through social security, annuities, or pensions? And is there a disconnect between what you project to spend versus what you expect to receive? Are your rates of return aligned with your risk posture, or are you being too conservative or too aggressive? And finally, have you checked your beneficiaries across all your accounts, and do you have a current estate plan, including powers of attorney and living wills or advanced healthcare directives?

Turning to end-of year gifting, have you been smart with your charitable donations? Giving cash is easy, but here are a couple additional ideas:

Donating highly appreciated assets to a qualified charity can avoid taxation on the gains but still allow a tax deduction.
If you are of age to take required minimum distributions (RMDs), and do not qualify for itemized deductions, you can make a Qualified Charitable Distribution (QCD) direct to a charity. The maximum contribution in 2024 is $105,000, and although you cannot make a charitable deduction, you don’t include the donated amount in your taxable income.

Switching to 2025, and in building on the previous questions, are you on track to achieve all your financial goals? Collaborating with a financial advisor can help you better strategize and align your financial resources with your future goals, and that’s a fantastic New Year’s resolution!

Michael Hilliard is a Managing Director at Shore to Summit Wealth Management. He currently works and lives in Severna Park, Maryland with his wife and children.

Please consider the investment objectives, risks, charges, and expenses carefully before investing in a 529 savings plan. The official statement, which contains this and other information, can be obtained by calling your financial advisor. Read it carefully before you invest.

Wells Fargo Advisors Financial Network is not a legal or tax advisor. Be sure to consult your own tax advisor and investment professional before taking any action that may involve tax consequences.

Wells Fargo Advisors Financial Network did not assist in the preparation of this report, and its accuracy and completeness are not guaranteed. The opinions expressed in this report are those of the author(s) and are not necessarily those of Wells Fargo Advisors Financial Network or its affiliates. The material has been prepared or is distributed solely for information purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy Wells Fargo Advisors Financial Network and Shore to Summit Wealth Management are not legal or tax advisors. You should consult with your attorney, accountant and/or estate planner before taking any action.

Shore to Summit Wealth Management is located at 105 E. Oak Street, Unit 1A Bozeman, MT 59715 # 406-219-2900.

This advertisement was written by Wells Fargo Advisors Financial Network and provided to you by Michael Hilliard, Managing Director. Investment products and services are offered through Wells Fargo Advisors Financial Network, LLC (WFAFN), Member SIPC. Shore to Summit Wealth Management is a separate entity from WFAFN.