Year End: Last Minute Financial Moves

BOSTON (WBZ-AM) -- There is still time to make some last minute financial moves that will help for this year and next.

The end of the year is a good time to review your investments overall and make sure you have designated a beneficiary for each account. This can be as important as writing a will. It is especially important if there have been changes in your life, such as a birth, a death, or a change in marital status.

One important point to keep in mind is that retirement accounts pass directly to named beneficiaries, rather than becoming part of your estate. This can provide significant tax advantages for your heirs.

If you are married, keep in mind that most employer-sponsored retirement plans automatically designate your spouse as the beneficiary unless you name another beneficiary and your spouse has consented in writing. For more details, read Fidelity’s Viewpoints: “Five ways to protect what’s yours.”

For those of you over 70½, December 31st is not only New Year’s Eve it is the deadline for taking your annual “minimum required distribution” aka MRDs from your retirement plans. 

If you have not set up an automatic withdrawal get into your account and move the money out of the retirement accounts into your personal nonretirement account. Not doing so by the end of the year could cost you a penalty of 50% of whatever the MRD is. 

The IRS doesn’t fool with this. You have had tax deferred growth on those accounts for years. Now it’s time to pay up!

Donating to a Charity is a tried and true method of lowering your tax bill for this year. All bets are off for next year though. You still have time to mail a check or use your credit card to make a donation. Consider using a credit card that will give you cash back or reward points. Then it’s a win/win.

Flex spending plans. Is your plan at work a “use-it-or-lose-it” plan? Well you have the rest of the week to use it. Or hopefully your employer allows participants to carry over up to $500 in unused funds into next year. Check it out!

You can hear Dee Lee’s expert financial advice on WBZ NewsRadio 1030 each weekday at 1:55 p.m. and 3:55 p.m.

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