Best of…

37 days until Christmas. Holiday decorations are starting to creep through our neighborhood—the stores are decked out with full Christmas regalia and sale signage—and our calendar is starting to fill with kids Christmas concerts and parties.

Although I will allow a little Christmas creep, I do maintain one hard line in our household…no Christmas music until December 1. Period.

But, once we cross December 1, it’s nothing but Christmas music for us. One of my all time favorite Christmas albums from my childhood is the Time Life Treasury of Christmas collection:

My parents had elected to get the records, not the cassettes. So, “Do You Hear What I Hear?” by Andy Williams still makes me anxious as the record would skip really badly on that song.

Now, we have that compilation on our Christmas play list, and it is in heavy rotation in December (that and TranSiberian Orchestra…)

Speaking of compilations, when thinking of today’s blog topic, I planned to write on the year end planning strategies we are working through with each of our clients. And then I realized that we’ve already written about each of them before. So, in honor of one of the greatest Time Life compilation albums of all time, here is the Meridian Year End Planning Blog Compilation Playlist:

Things we recommend that you review/consider before year end:

1. Make an IRA contribution. In Nathan’s post “Can you Dodge the Tax Act?” He discusses the contribution limits as well as whether you can make a deductible contribution or not.

2. Along those same lines, small business owners should consider setting up a retirement plan or funding a plan to reduce their taxable income for 2019. We touch on some common small business plans in this blog post.

2. Take any Required Minimum Distributions from your IRA: Failure to do so by December 31st triggers a 50% penalty. Yikes! In our post “Don’t Fear the Reaper”, Nathan discusses some productive ideas for your RMD.

3. Kill two birds with one stone—take your RMD and make a charitable donation by doing a Qualified Charitable Donation from your IRA. We covered the mechanics of completing a QCD in our post “Doing Well by Doing Good”.

4. Consider ‘harvesting’ investment losses to offset taxable capital gains for the year. Nathan hits all the high points in his post “Know When to Hold ‘Em”.

5. With bigger bracket bans with lower tax rates, consider accelerating income into 2019 to “top off” a lower bracket. We’ve been doing this a lot recently. Many of our retirees find themselves in a substantially lower bracket this year (i.e. 0%-12%). So, we have been taking premature IRA withdrawals and either converting them to Roth IRAs or adding them to the spending pot to fund 2020 needs. We worked through this last year when the Tax Act was still a glimmer in Congress’s eye, and wrote about it here.

At Meridian, we’ve been working through these ideas plus checking up on portfolio allocation, financial plan progress, account information like beneficiaries, and more. Just part of our duty to act in our client’s best interest. And soon, we can do our year end reviews to the official soundtrack of Christmas…

Categories : Financial Planning

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