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Financial Planning October 2019 | Taking Inventory of your Financial Situation

Taking Inventory of your Financial Situation

With Fall upon us, it is a smart time to take inventory of your financial situation. The following strategies can make a difference financially and provide peace of mind.

Tax Planning

The last quarter of the year is a great time to review your 2019 tax picture and determine if any action should be taken. While the IRS deadline is December 31st, the custodian broker’s deadline is often in early December. We recommend reviewing your tax situation during the Fall to determine if any actions need to be taken.

Roth Conversions can be a great planning tool. A Roth Conversion is simply moving funds from your Traditional IRA account into a Roth IRA account. The Roth IRA grows tax free and has no required minimum distributions (under current law).
Since the conversion transaction is usually taxable, it is best done in a lower tax year (between jobs or after retirement).

Today’s federal income tax rates are lower for many taxpayers thanks to the Tax Cuts and Jobs Act. Doing a Roth Conversion now can reduce future income, which could be taxed at higher rates.

Charitable Giving has become a bit more complicated under the tax law, which went into effect last year. Since more people are using the Standard Deduction, these individuals don’t always get the tax benefit from their charitable gifts. There are some strategies that may help with this, such as “gift bunching.”


Charitable Giving can also come from your IRA. If you are over 70 ½ and taking a required minimum distribution, a QCD (qualified charitable distribution) could be just the thing. The donation comes out of your IRA to a qualified charity, counts as part of your required minimum distributions, and is not included in your taxable income.

Required Minimum Distributions (RMD) for Traditional IRAs must be completed by 12/31/19. The one exception to this deadline is for the first year RMD. You have the option for the first year only to wait until the following year and complete it by 4/1/20. This can be a benefit if you expect your taxes to be lower in 2020, but you will be doubling up your 2019 & 2020 RMDs and increasing your taxable income for 2020. It is usually better to take it in 2019.


IRAs and 401ks A more successful retirement can be achieved by planning ahead and maximizing the contributions to your IRAs and your company retirement plans.

For 2019:

  • IRA limits are $6,000 under age 50 and $7,000 for age 50+ (you must have earned income)
  • Employer plan (401k, etc.) limits are $19,000 under age 50 and $25,000 for age 50+. You can look at your paycheck stub to see if you are on track for 2019.

529 Accounts can be a great way to save for college for your children and grandchildren. The growth of the investments in these accounts is tax free if used for qualified expenses. The contribution counts as a personal gift with a 12/31 deadline for the current tax year. Start no later than November.

Other Financial Planning

Personal gifts must be completed by the end of the year. The limit for 2019 is $15,000 per person (before needing to file with the IRS).

Beneficiary Review of Investment Accounts, Life Insurance, etc.: Review the beneficiaries to ensure they still reflect your wishes and are in concert with your full estate plan.

Mortgage Review:  Mortgage rates are lower than they have been in a while. This is a good time to review your current mortgage for the rate, the terms of your loan, how long you plan to stay in your home, etc. to see if a refinance would be to your advantage.

Insurance Review: It is important to review your insurance policies annually to be sure you are fully insured under your homeowner’s/auto insurance, umbrella insurance, life insurance, business insurance or others.

  • For Homeowner’s Insurance, be sure to adjust the coverage if the home value has changed or you have made major home improvements. You can also check to see if there are any new discounts available.
  • For Life Insurance, if there has been a life changing event such as a death, marriage, or divorce, it is important to make updates to beneficiaries and possibly coverage limits.

Life Changing Event: If you have had a major change in your life or financial situation, or anticipate this will happen soon, a review of your finances and estate documents can help smooth the path forward.

A Few Little Things To Do:

Check your credit history with the official free site Check for Unclaimed Property in any state where you have lived. For California, check out: or call 800-992-4647. Other states have similar, official resources. Check on your Social Security. If you are not yet receiving benefits, you can verify that your earnings are accurately recorded and get a benefit estimate by going to the Social Security web site

A little knowledge can go a long way when it comes to successfully managing your finances. When you are confidently in control of your money, you can start enjoying your life instead of just saving for it.

Make sure your money is working as hard as you are.