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A Handy Checklist for Year-End Planning

A Handy Checklist for Year-End Planning

| December 14, 2022

Sometimes it feels like a year can go by in a flash. When you look back over the past 12 months, you might be surprised at how things have changed for you: individual finances, personal circumstances, or the economy in general. 

The end of the year is a good time to take stock of the past year, to review your accounts and investments and make smart adjustments for the new year. We encourage you to make time in a busy season for some year-end financial planning, so that you’ll be better positioned for a successful 2023.

Here are 6 smart planning moves to consider, here at year-end:

  1. Review your financial plan. Keep your financial goals on track by following a well-diversified, holistic financial plan. Any plan we build must reflect your specific goals and adapt to any changes in your life.

Your plan should also be seen as a safeguard against your emotions, which might waver in light of this year’s market volatility. It’s natural to want to change up your portfolio when stocks are down or up, but we caution you against moves that are based on the actions of the market. 

Changes to your financial plan may be triggered by changes in your personal circumstances. Are you experiencing milestones such as retirement, job change, job loss, marriage or divorce?  Any and all of these transitions should encourage you to review your plan. 


  1. It’s time to take your RMD. If you are 72 years or older, you must take an annual required minimum distribution (RMD) from most retirement accounts.

If you turned 72 this year, you have until April 1, 2023, to take your first RMD. That will reduce your taxable income in 2022, but keep in mind that you will be required to take two RMDs in 2023, potentially pushing you into a higher tax bracket next year. For all subsequent years, including the year in which you took your first RMD by April 1, you must take your RMD by December 31. If you miss the deadline, you could be subject to a 50% penalty on the portion of your RMD you failed to withdraw.

The RMD rules apply to traditional IRAs and IRA-based plans such as SEPs and SIMPLE IRAs. The RMD rules apply to all employer-sponsored retirement plans, including profit-sharing plans, 401(k) plans, 403(b) plans and 457(b) plans. The RMD is also required from a Roth 401(k) account; however, the RMD rules do not apply to Roth IRAs while the owner is alive.

Generally, an RMD is calculated for each account by dividing the prior December 31 balance of that IRA or retirement plan account by a life expectancy factor published by the IRS.  

  1. Maximize retirement contributions. By adding to your 401(k) plan or IRA, you can reduce income taxes during the current year.

In 2022, the maximum contribution for 401(k)s and similar plans is $20,500 ($27,000 if age 50 or older, if permitted by the plan). For 2022, the maximum you can contribute to an IRA is $6,000 ($7,000 if you are 50 or older). Contributions may be fully or partially deductible.

FYI: You can make 2022 IRA contributions until April 18, 2023, and these limits will increase for 2023.  Call us if you have questions.

A note on Roth IRAs: with Roths, you aren’t allowed take a tax deduction in the year of the contribution, but you have the potential to earn tax-free growth (not just deferred tax-free growth) and are allowed federal-tax free withdrawals if certain requirements are met. 

  1. Convert your traditional IRA to a Roth IRA. Speaking of Roth IRAs, this may be the time to partially or fully convert the reduced value of the account into a Roth IRA. The deadline to convert is December 31, 2022.

The decline in the stock and bond markets has affected most retirement accounts. A Roth may make sense if:

  • you won’t need the money for several years
  • you believe you’ll be in the same or higher tax bracket at retirement
  • you won’t need to use retirement funds to pay the taxes.

You’ll pay ordinary income taxes on the converted portion of the IRA. But going forward, you won’t have an RMD requirement (based on current law), growth is tax-deferred, and if you meet certain requirements, you’ll avoid federal income taxes when you withdraw the funds.


  1. Charitable giving. ‘Tis the season for giving: you can donate to your favorite charity by December 31, potentially offsetting any income.

Did you know that you may qualify for what’s called a “qualified charitable distribution” (QCD) if you are 70½ or older? A QCD is an otherwise taxable distribution from an IRA or inherited IRA that is paid directly from the IRA to a qualified charity. It may be especially advantageous if you do not itemize deductions. It may be counted toward your RMD, up to $100,000. If you file jointly, you and your spouse can make a $100,000 QCD from your IRA accounts.


  1. Think about estate planning. Estate planning may look at events years in the future, but events in the here and now can affect your strategy.

If you or your family experienced life events this year (marriage, divorce, health changes, death), you’ll want to review your current will or trust, paying particular attention to your beneficiaries and trustee designations. Even if there aren’t significant changes, you should review your estate planning documents every five years or so.

 And if you don’t have an estate plan set up, starting that process can bring some peace of mind to you and your family. 


We hope you’ve found these planning tips to be useful; feel free to share them with friends and family! If you or anyone you know would like to carve out time to talk through your strategies or financial plan, before the end of the year or as a fresh start in January, we encourage you to set up an appointment with us. There are calendar links in each of our profiles on our team page.

 We wish you and your family a safe and happy holiday season.

Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss. There is no guarantee that a diversified portfolio will outperform a non-diversified portfolio; it is a method used to help manage portfolio volatility.

Estate planning may require legal assistance, which neither LPL Financial, nor its registered representatives, provide.  If converting a Traditional IRA to a Roth IRA, you will owe ordinary income taxes on any previously deducted Traditional IRA contributions and on all earnings.  A conversion may place you in a higher tax bracket than you are in now. 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. Because Roth IRA conversions may not be appropriate for all investors and individual situations vary we suggest that you discuss tax issues with a qualified tax advisor.

While the tax or legal information provided is based on our understanding of current laws, and has been gathered from sources believed to be reliable, it cannot be guaranteed. Federal tax laws are complex and subject to change. This information is not intended to be a substitute for specific individualized tax or legal advice and should only be relied upon when coordinated with individual professional advice. Neither LPL Financial, nor its registered representatives, provide tax or legal advice. As with all matters of a tax or legal nature, you should consult with your own tax or legal counsel for advice.