Year-End portfolio checkup
2Consider tax loss harvesting : Tax loss harvesting is an underappreciated investing strategy that investors should consider while rebalancing their portfolios . Investors generally don ’ t want to sell anything at a loss , but there can be a significant advantage if you have gains to offset . Tax loss harvesting can also serve as a motivation to sell underperforming investments or re-diversify overlyconcentrated stock positions . Consult a tax professional to determine what strategy works best for your situation .
3Max out retirement savings ( if you can ): End of year is a good time to evaluate your overall savings and determine if you can bump up what you ’ re putting away for retirement . For 2019 , the maximum 401 ( k ) contribution is 19,000 . It ’ s a good idea to take full advantage of your employee retirement plan , at least to the point of any employer match . You can also use lump sums , like an annual bonus , to give your savings a boost .
4Consider a Health Savings Account ( HSA ): It ’ s open enrollment season , and if your employer offers a HSA — and you qualify to contribute to one — it can serve as a stealth retirement savings account in addition to a 401 ( k ) or an Individual Retirement Account ( IRA ). If you ’ re able to contribute to a HSA and leave it alone , it can be used to cover healthcare expenses in retirement without tapping into other savings , and after age 65 , money in an HSA can be used for any expense without penalty .
5Charitable giving : End of year is a time when many people think about charitable giving . As with other aspects of your finances , it ’ s important for charitable giving to be part of a broader financial plan . If you ’ re retired , consider donating a portion of your retirement income that you don ’ t need for living expenses , as you can potentially deduct contributions to qualified organizations if you itemize .
If you ’ re 70½ or older , you could also consider donating directly to a charity from your IRA , using a qualified charitable distribution ( QCD ). A QCD allows you to meet the required minimum distribution and has the added benefit of not being included in your taxable income . The sooner you start working on a QCD the better because , depending on where your IRA is and how long it takes to process , you may need two to three weeks to get it done and December 31 is the deadline . You ’ ll want to check with your IRA custodian on the proper process since it will be different than a typical distribution .
I hope your holiday season is filled with many blessings – maybe a few of these tips will enable you to bless others in the process !
Joseph Killgore , CFP ® is an Independent Branch Leader and Financial Consultant at the Charles Schwab Greenville Independent Branch with over 10 years of experience helping clients achieve their financial goals . Joseph also has his Masters of Science in Personal Financial Planning from the College for Financial Planning . Some content provided here has been compiled from previously published articles authored by various parties at Schwab . Charles Schwab & Co ., Inc ., Member SIPC . ( 1019- 9Y2F )
Information presented is for general informational purposes only and is not intended as personalized investment advice as individual situations vary . Where specific advice is necessary or appropriate , Schwab recommends consultation with a qualified professional . Investing involves risk including the potential loss of principal .