Your Guide to Year-end Planning

Peter Pabich |

Between social events, holidays, and work commitments, year-end can be a busy time. However, to end the year in good financial shape and start the new year on the right foot, it’s crucial to reflect on the year that is ending and plan for the next one.  

To help you wrap up your financial year, our Entrust Wealth Partners team have shared their advice and steps to follow below. These steps will help you put together a solid year-end financial checklist. 

How To Conduct Your Year-end Planning 

Together with the guidance of our team, the following 4 steps will help you through your year-end planning and into the new year. 

1. Reflect on the year that is ending 

2. Take inventory of your entire wealth management plan 

3. Plan for the year ahead 

4. Take both a detailed and a holistic approach


We’ll now go through each of these points in more depth. 

1. Reflect on the Year That Is Ending

Year-end presents a great opportunity to look back on the year you’ve had and think about the good things that have happened, as well as everything you’re grateful for. 

It’s also the perfect time to congratulate yourself on your achievements. When you take time to note down what went right for you in 2022 and what you were happy with, you’ll be better positioned to replicate those successes in 2023. 

This reflection time can also help you to identify what you felt didn’t work well with regards to your business or financial decisions, and where you’d like to make changes or improvements going forward. 

2. Take Inventory of Your Entire Wealth Management Plan

There’s no better time than year-end to review and analyze your wealth management plan as a whole, leaving you ready to implement any necessary changes for the following year. 

A good starting point is to build a financial checklist of sorts to see what needs to be done by year-end to qualify for benefits, maximize contributions, minimize taxes, and more. 

This is something that our Entrust Wealth Partners team can help you with, but here is an initial checklist for your consideration: 

  • Tax planning: In order to access certain benefits and minimize tax liability in different areas, there are certain actions you may want to take as year-end approaches. These might include: 

    • Tax-loss harvesting: This is a smart option if you have stocks that are not performing and are losing you money. Tax loss harvesting allows you to sell off stocks that are underperforming and in doing so reduce your capital gains and therefore your taxable income.  

    • Roth IRA Conversion: If you have some room in your current tax bracket before reaching a higher federal income tax rate, a Roth conversion may be suitable for you. This is essentially moving some of your pre-tax retirement savings or investment positions that are sitting in a traditional IRA deferring taxes, into a post-tax account, like a Roth IRA. In a Roth IRA you pay tax upfront, but the funds are then able to grow tax free overtime.

  • Investment planning: How you choose to invest is a personal choice. However, your investments should still be working for you and meeting your objectives. Year-end is a good time to check if your goals have changed and work with our team to assess if any adjustments to your portfolio are needed. 

    • You should also consider maximizing your retirement account contributions, as this money comes from pre-tax earnings and will lower your taxable income. 

    • If you’re over 72, an essential aspect of your investment planning needs to be making sure you’ve taken your minimum required distribution from your retirement account. If you haven’t done this by the 31st of December you will face a penalty.  

  • Insurance planningInsurance policies can vary significantly from company to company so taking the time to review your home, auto, and life insurance is essential. Your insurance needs may have also changed and that can impact whether your current coverage is suitable. You should also make sure that your beneficiaries of your life insurance are still accurate. 

  • Estate planningIt’s crucial that your overall estate plan, including your will, financial assets, trust and health care as well as any financial powers of attorney, are up to date. 

    • You’ll also need to account for estate taxes. This planning will involve taking steps to minimize these taxes where possible. Building in a routine review at the end of every year gives you security that no matter what comes up, your estate affairs are in order.

  • Business succession planningWhile you’re thinking about your estate, you should also look at, or create, the necessary succession plans for the future of your business. Business succession plans can change over time due to different events, so by conducting a yearly review, you’re in full control over who manages your business in the case of your retirement, death, or any other unforeseen circumstance that takes you out of action. Alternatively, if you plan to sell your business in the future, year-end is an opportune time to assess your progress towards that goal and make shifts, as needed.

  • Charitable giving planningIf you’re planning on making any charitable gifts, it’s important that you do so before the 31st of December. This way you can make the most of the tax benefits around these acts. You might also want to explore options for “bunching” a couple of years worth of charitable donations in one year to receive tax benefits. 

  • OtherThere are also a number of miscellaneous items you’ll want to include in your year-end plan. These include: 

    • Reviewing your Flexible Spending Account balance and spending down any balances you can’t rollover. 

    • Contributing any excess cash to your Health Savings Account (HSA). This can help to maximize tax savings for the calendar year. 

    • If you are planning on gifting to any family members, and have not yet done so, consider doing that now to make the most of your tax free gifting allowance for the year. 

3. Plan for the Year Ahead

Once you’ve reviewed the key points outlined above, you’ll be ready to sit down and think about what the new year is likely to bring up for you. Alongside this you can set priorities and goals. 

This could mean taking a look at, and adjusting, your spending habits for cost of living. It could also mean making decisions regarding the causes you donate too.  

If you know you are going to be making some kind of significant change in the next few years, like selling a business, changing roles, or retiring, you’ll also need to account for how this will impact your finances. 

Some questions to ask yourself might include: 

  • Do I have any life events that are likely to make a big impact to my finances in 2023? 
  • How will changes to cost of living impact my retirement planning?
  • What about Social security? Am I eligible for social security benefits? Is it the right time to claim them?
  • How does all of this impact my ability to give and donate to the causes I care about? 

4. Take Both a Detailed and Holistic Approach

Working through the above steps in detail and making necessary transactions before year-end is essential. While each of these individual decisions is important, it’s also crucial to take a holistic view of what these changes mean together. There are many different elements of your year-end planning that overlap and can impact one another. For instance, in any kind of investment or business decision there will be tax implications. 

Final Thoughts 

We understand the end of year can get busy, but there is no better time to sit down with your advisor and make sure you’re positioned to get the most out of the new year. Our Entrust Wealth Partners team will help you maximize opportunities by bringing together the various components of your wealth management plan and providing you with a holistic view to inform your future. Contact your advisor or reach out to us at (860) 838-3730 to get started.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for individualized tax/legal advice. Please consult your tax/legal advisor regarding your specific situation. Entrust Wealth Partners and LPL Financial do not provide tax/legal advice or services. 

Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA.

This material was prepared by Courtney Henry Consulting