Year-end financial planning tips so you can be a financial badass!

by | Nov 23, 2022

As the end of the year approaches, it is time to finish up your last-minute financial to-do’s. Here is a list of things that you should consider as you wrap up the year so that you can leave 2022 feeling like a financial badass. Review this list now as many deadlines are approaching quickly and you don’t want to miss out on some key opportunities. If you are already a client of Empowering Finance, make sure you reach out about any opportunities you see here that we haven’t talked about in our meetings yet. 


Do you have unrealized investment losses in your taxable accounts? An unrealized loss means that the stock price is lower than the price that you purchased, but you haven’t sold the stock yet. If you choose to sell the stock at a loss, you will then recognize the loss on your taxes and can help reduce the gains that you have in the account or write off up to $3,000 against your ordinary income. 

This isn’t always the best thing to do depending on your investment portfolio and goals so if you think you might have some opportunities in your brokerage account when it comes to tax savings, you should speak with your financial planner first to evaluate. 


Have you saved enough money this year? Consider making additional retirement account contributions if you are able. There are limits to how much you can contribute to various retirement plans so be sure to check those limits and max them out if you can! For example, you can contribute up to $20,500 to your 401(k) plan ($27,000 if you are age 50 or older) of pre-tax dollars (this means you pay fewer taxes on your income this year and defer that tax liability for the future). You can also contribute up to a total of $6,000 ($7,000 for ages 50+) between all of your Traditional IRAs and Roth IRAs. 

If you have an HSA plan, make sure you have completed your contributions. An HSA is a tax-efficient savings account for health-related expenses that you can contribute $3,650 ($7,300 for a family) and an additional $1,000 if you are 55+ every year. 

If you are wanting to begin saving for a child or family member’s college education, you can also consider beginning a 529 savings account. You can get a state tax benefit for your contribution to these accounts. 

Are your emergency funds account and sinking funds accounts at their targeted goal levels? Are they in a high-interest savings account?

Not sure if you are saving enough or what this even means? Let’s chat! That is what we help our clients figure out.


Have you saved too much money this year? Roth IRA accounts have contribution limits of $6,000 ($7,000 for ages 50+) and they also have income restrictions. For a single filer, if your MAGI (modified adjusted gross income) is less than $129,000 you can contribute the full contribution allowed. If your MAGI is between $129,000 -$144,000 you can contribute a decreased amount to the Roth, and if your income is above $144,000 then you cannot contribute to a Roth (see below for the income limits for married filing jointly). If you are not sure what your income is yet, then you can use this Turbotax Taxcaster to estimate your refund and gather information about your taxable income. If you are filing as married filing separately and your MAGI is over $10,000, you can’t make a Roth contribution.

2022 Roth IRA Contribution limits and phaseouts


If you are above the income limits and have contributed to your Roth IRA this year, no need to stress, but you do need to pull out your contributions ASAP. You must do this before 12/31/22 or you will face a 6% penalty for every year the excess contribution remains in your account. 

Make sure that you haven’t contributed over the maximum amounts to your HSA, 401k, and other retirement accounts as they all have limitations, and sometimes your employer does not catch this. 


Do you have charities that you want to donate to and reduce your taxes? If you are already planning to donate to your favorite charities, consider benefiting from some tax savings as well! If you have highly appreciated securities (stocks or assets that would trigger you to pay taxes if sold) you can gift those securities and reduce your tax liability. You get the tax benefit for donating to your charity of choice (must be a 501c(3)), you reduce the gains in your investment portfolio, and your charity can sell your assets tax-free! A total win for all :).


Do you need to take Required Minimum Distributions from your IRAs or Inherited IRA accounts? An RMD is a Required Minimum Distribution from IRA accounts. For most, an RMD is triggered at age 72 and a set amount is required to be withdrawn (thus paying taxes) from your IRA and tax-deferred retirement accounts. This distribution must occur before December 31st or the amount not withdrawn will be taxed at 50%!!! 

If you inherited an IRA, there are different RMD requirements depending on your relationship with the person you inherited the account from and when they died.  You can review guidance for taking your RMD here for those where the IRA account holder died after 2019, and therefore, the rules under the SECURE Act apply. 

If the IRA owner died before 2020 and therefore is not subject to the changes in the SECURE Act, you can learn about distribution options here. You should ultimately discuss the best strategy for you with a financial planner who knows your specific situation. 


Have you met your health insurance plan’s deductible and been reimbursed from your FSA? If you have met your deductible or you are very close, consider incurring any additional medical expenses that you could need before the end of the year so you have less coming out of pocket next year.  If you have an FSA account, make sure you use the remainder of your benefits before the end of the year (or check your employer’s deadlines) so that you don’t lose any benefits when the balance resets. If you don’t have any medical expenses to use for your FSA balance, consider checking out online FSA stores (I have personally used  to use your dollars so you don’t lose them.


Have you shopped around for health insurance? If your premiums are going up or you just want to make sure you have the best policy for your family, be sure to shop around during Open Enrollment for 2023 health insurance. You have until December 15th to enroll or change plans for coverage to start January 1st!!! It costs nothing to get a quote from your insurance agents so don’t be afraid to shop around for a plan that best fits your needs.


A few other things to double-check before the year ends:

  • Have you had enough taxes withheld from your paycheck?
  • Are your beneficiaries up to date on all accounts, including your checking and savings accounts?
  • Have you evaluated your open enrollment options to determine the best choices for 2023?
  • If you are working with a tax professional, have you confirmed with them that you want them to file your 2022 taxes?
  • Are you tracking your spending and savings? If not, download Mint or Monarch to start tracking today!