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  • Writer's pictureJiayi (Kristy) Xu, MBA, CFP®

Year-End Financial Planning Checklist

The new year starts as quickly as the last one ends. You’re now on your way to moving forward with your future so make sure your financial plan is moving forward with you. Below is a year-end financial planning checklist that may inspire some thoughts for your financial plan.

  • Review your financial plan

As you are accumulating wealth, your financial goals may change. Major life changing events such as marriage, child birth, job changes, divorce, retirement, death of family member, etc. may lead to changes in your financial goals or a different prioritization of your goals. Are your financial goals still realistic and up to date?

  • Review your emergency savings

We do not live in an ideal world and unexpected emergencies can happen, whether it is a big medical expense or a sudden lay off. It is recommended that you have an emergency savings account that worth at least 3-6 months of your living expenses. If you have not built up your savings maybe it is time to consider depositing some money to your emergency savings account.

  • Review your portfolio allocation

Over the year, your portfolio mix may have shifted from what you intended it to be. Holding more than 10% of your portfolio in a single company is called a “concentrated holding”, this most frequently occurs when you vest your employer stock compensation. Over time due to market fluctuations, some sectors in your portfolio can become significantly overweighted or underweighted without rebalancing. Or maybe your financial circumstances changed over the past year, and the existing portfolio no longer fits your updated objectives, risk tolerance, or tax status. Whatever the reasons may be, it is always beneficial to review your investment portfolio at least once per year (of course, if you are our clients, we monitor your investments and review them with you at least once per quarter).

  • Review your taxes

Though Tax Day might not come until April 15, it is always a good idea to review your taxes at the end of the year to start preparing and avoid any surprises right before Tax Day. Life transitions in the last year such as marriage, divorce, child birth, death, etc. are all reasons for adjusting your withholding status. If you have investments that lost money, you should explore the opportunity of tax loss harvesting to help you reduce your tax liability. This is also the time to sum up your itemized deductions and compare the total to the standard deduction available for your filing status to determine if you can lower your tax bill by itemizing deductions. Also, don’t forget to check the tax credits you may qualify for. If there are any charitable donations you want to make for the year, this is the time as well.

  • Review your retirement saving accounts

Sometimes, people stop paying attention to their retirement accounts after setting them up, but reviewing them at least yearly can make a big difference. For the tax year of 2022, have you maxed out your contribution? If you have not, consider making a plan to increase your contribution on an annual basis. As the old adage says, “it's not about timing the market, but about time in the market.” Also, don’t forget to take a look at the allocation of your retirement accounts – have those allocations deviated from your objectives over the years and need to be rebalanced? For those whose income exceeds the limits for making contributions to a Roth IRA, this is the time to consider whether you would want to do a "backdoor Roth IRA" - you will owe taxes on the money you convert, but you'll be able to take tax-free withdrawals from the Roth IRA in the future. If you found your significant other or had a new born in the family in the past year, don’t forget to bring your account beneficiaries up to date to include your loved ones.

  • Review your employee benefits

Flexible spending accounts (FSAs) and health savings account (HSA) are the types of employee benefits many people tend to overlook. With an FSA, most of your funds expire at the end of the calendar year. If you have not used up the amount that cannot be rolled over, look for some qualified products to spend the funds on – from contact lens solution to skin care, there are many qualified products you may have never thought of. On the other hand, your HSA, being able to roll over from year to year, is a great resource for you to use untaxed dollars to pay for deductibles, copayments, coinsurance, and some other expenses, enabling you to lower your overall health care costs. If you do not have large health costs now, or expect them in the near future, remember that you can invest the funds in your HAS to grow tax-free for future medical expenses. If you haven’t already, you should consider maxing out your contribution.

  • Review your insurance

It’s important to reevaluate your insurance policies regularly to make sure you’re properly insured and are not paying too much for them. For instance, is your insurance coverage for your primary home at least 80% of your home’s replacement cost? Can you bundle your homeowners and auto coverage to lower your premium? The end of the year may be a good time to identify any weaknesses in your insurance coverage and update and modify your insurance policies.

  • Review your gift to family and estate plan

After a year of hard work, you want to make sure the assets you accumulated can be eventually received by your loved ones, and planning can help minimize income, gift and estate taxes, too. For instance, if you have kids, you may want to review whether you have saved enough each year for their education or if you want to take advantage of the 5-year gift tax averaging for their 529 plans. You may also want to check if your properties are properly titled, have beneficiary designation, or if you should put them in a trust - estates can be subject to excessive probates fees and expenses if you leave them to go through the traditional probate process.


Of course, this checklist simply suggests a list of financial planning subjects for you to review at the end of year and by far not a full list of financial planning topics you need to consider. If you would like to discuss more financial planning topics with me, but are new to my firm, let’s set up a free introductory call to get started!


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