Tag Archives: retirement planning

Financial Advisor: Seven Year-end Retirement Planning Strategies

This is the time of the year when most people are thinking of the holidays and what presents they may be buying for their friends and family. Few people are thinking about retirement planning and that is understandable. Amidst all the turkey, football and naps, you are tempted to take time off from all the work hubbub. 

Yet, the Thanksgiving and Christmas holidays are the perfect times to begin retirement planning. The business year is ending. The tax year is ending. If there was a time to start a retirement investment portfolio, it’s now!

So, here a few retirement planning strategies your financial advisor may tell you:

  1. Charitable contributions: At this time of year, donations to non-profits are at a yearly high. People feel driven to donate to causes such as homeless shelters, food banks, disease research, and other charitable organizations. So, they can do a QCD or Qualified Charitable Distribution. It is complicated but basically works like this: People with IRAs subject to a required minimum distribution have not yet taken it for the year, they can then use the qualified charitable distribution (QCD) provision. Thus, they can make their contributions directly from their IRA. It is then counted toward the RMD and be excluded from income. Thus it creates a tax deduction in addition to the standard deduction. It applies only to IRAs, not to plans, and only IRA owners or beneficiaries who are at least 701/2 qualify. Donor-advised funds and private foundations are not eligible. No gifts can be accepted, either. This must be done by December 31, 2019. 
  2. Roth IRA Conversions: Since 2018, conversions cannot be reversed. Now, they are permanent and the tax is due after funds are converted. Roth conversions qualify for this year if the funds are converted from the IRA or plan by year’s end. There are a lot of things to keep in mind here such as Social Security taxability, Medicare Part B/D premium increases, financial aid and other considerations. Please consult with your financial advisor on this strategy. 
  3. Split inherited IRAs by December 31: If the owner of the IRA died last year and had a number of named beneficiaries, those beneficiaries can use their life expectancy for calculating required minimum distributions. The IRAs are split into separate shares before the year is over following the IRA owner’s death. 
  4. Pay off debt: If you can pay more on your mortgage payments and pay it off early, you can then pay more money into your IRA. Pay off credit cards, car loans, and balloon loans. 
  5. Plan where you will live when you retire: Every state is ranked on which is best or worst to retire in. You choose where you want to live and then calculate how much you will need to retire and begin investing now to do that. There are a number of websites such as www.moneywise.com which rank the states as to which is most retirement-friendly and how much income you need to make to live “comfortably.” 

There are a number of other financial moves you can make before the end of the year. So, the best step to take? Consult your financial advisor. They can help you to make the smart moves NOW, before the holidays and the year-end. 

Enjoy time with your family and friends. Those memories are priceless. But, retirement isn’t. So, call your financial advisor today and take those first or additional steps that will make your retirement better and smarter. 

A.K. Burton, PC, has experienced financial advisors who can advise you on retirement planning, no matter what your occupation or age. Call us at (301) 365-1974 for a consultation. Our accounting firm serves the Bethesda, Rockville, and Montgomery County, Maryland areas.