Foran Financial Group’s Year-End Financial Checklist

There are a lot of distractions this time of year, as we focus on the holidays and time with family. But remember to carve out a little time to review your finances and tie up any loose ends before the new year rolls around.

The team at Foran Financial Group has created a year-end financial checklist of 10 action steps to take before 2021. Going through this list can help you maximize your tax savings and head into the new year with a boost of financial confidence.

1. Maximize Retirement Account Contributions

There’s still time to max out your retirement contributions for 2020. If you have the means and haven’t hit these limits yet, talk with your financial advisor about adjusting your withholdings now to maximize your savings and reduce your tax bill:

2. Review Required Minimum Distributions (RMDs)

The Coronavirus Aid, Relief and Economic Security (CARES) Act suspended RMDs for 2020. That said, you may still want to take yours if:

  • You believe you’re in a lower tax bracket than you will be in the future
  • You’d like to decrease the amount of future RMDs you must take
  • You don’t need the money and would like to donate it to charity

Annual RMDs should resume in 2021. When that happens, you’ll be required to take your full RMD amount by December 31 to avoid penalties and fees.

3. Consider a Roth IRA Conversion

Depending on your financial situation, it may make sense to invest in a Roth IRA even if you already have a Traditional IRA. While not everyone qualifies for a Roth IRA, because their income is too high, you may still be able to contribute through a Roth Conversion at year-end. Talk with your financial advisor to see if this is a good tax-saving strategy for you – and your beneficiaries.


Have questions about your finances as we approach 2021? Contact the team at Foran Financial Group to see how we can help.


4. Max Out Your Health Savings Account (HSA)

HSAs are 100 percent tax-free – a benefit not found in other investments. Unlike Flexible Savings Accounts (FSAs), your funds roll over from year-to-year. If you have a high-deductible healthcare plan, you may qualify for an HSA and therefore, want to prioritize maxing it out every year.

For 2020, the maximum contribution limits for HSAs are $3,550 for individual healthcare plans and $7,100 for family plans. If you’re at least 55, you can contribute $1,000 more on top of these limits.

At Foran Financial Group, we can help you analyze your insurance needs so you select the coverage that’s right for you. For more on what this looks like, schedule a no-obligation meeting with the team at Foran Financial Group, and get the conversation started.

5. Use Up FSA Funds

In most cases, funds in your FSA expire at the end of the year – if you don’t use ’em, you lose ’em. Take note of how much money you have in your account and plan now for how you’ll use the balance.

Under the CARES Act, you can now use FSA funds for over-the-counter medication and other needs – something you weren’t able to do before.

Now is also a good time to adjust your FSA contributions for 2021 if you find you have too much or too little money left in your account at the end of the year. The maximum contribution limit for 2021 is $2,750 per employee.

6. Rebalance Your Portfolio and Offset Any Capital Gains

Reviewing investments can help you lower your taxable income and ensure you’re not carrying too much risk as you head into the new year. For example, if you’ve had capital gains, you may be able to offset them by harvesting investments in a “money-losing” position. Talk with a financial advisor to fully understand your options.

7. Review Your Estate Plan

If 2020 has taught us anything, it’s just how fragile life can be. Make sure your estate plan is up-to-date by reviewing these 4 items:

  • Will
  • Trust
  • Powers of attorney
  • Beneficiaries

Now is also a good time to decide if you’d like to gift up to $15,000 to any friends or family members to take advantage of the annual gift-tax exclusion. For more on what an estate plan should have, read our recent blog post: Foran Financial Group Reviews POAs, Health Directives and Insurance.

8. Review Your Insurance Policies

Make some time to review your insurance policies to ensure you not only have enough coverage but that your deductibles aren’t too high. Some common policies you’ll want to review include:

  • Life insurance
  • Health insurance
  • Disability insurance
  • Auto insurance

Again, Foran Financial Group can help you review your insurance needs.

9. Explore Your Charitable Giving Opportunities

The CARES Act created several tax incentives for charitable giving in 2020. Here are 2 you’ll want to consider:

  1. If you itemize, you can now deduct 100 percent of your donations from your Adjusted Gross Income (AGI) instead of 60 percent.
  2. If you take the standard deduction, you can take an “above the line” deduction for up to $300 in charitable gifts.

If you’re required to take RMDs but don’t need the money, you can donate it to charity through a Qualified Charitable Distribution (QCD). These donations decrease your AGI for the year, which can lower Medicare premiums and decrease your amount of taxable Social Security. The maximum limit you can donate is your full RMD amount or up to $100,000, whichever is less.

Discuss your options with a financial advisor to see what works best for you.

10. Review Your Progress and Set Goals for Next Year

The end of the year is a great time to take stock of all you’ve accomplished this year. Did you pay off debt? Hit a new savings goal? Set your retirement date?

While you’re reflecting, plan out any goals you want to accomplish over the next year. Maybe you want to pay off your mortgage or start a college savings plan for your grandchildren. Whatever it is, taking a moment to pause and reflect can help you stay energized as you head into the new year.

The Bottom Line

The new year is right around the corner. At Foran Financial Group, we want you to be as prepared as possible for the new year. If you’d like help going through this checklist and getting your finances in order, contact us. We can help you prepare for the new year and put together a comprehensive financial plan that helps you reach your future goals. Schedule a no-obligation conversation with the Foran Financial team and start 2021 off on the right foot!


Foran Retirement Ready

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. 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.