How to Recalibrate Your Financial Plan Before the End of the Year

The holidays are a great time to decompress and spend time with family even if the pandemic has greatly shifted what normal looks like in 2020. This means that if you haven’t already done it, now is a good time to think about evaluating your existing financial and estate plans.

As we approach the end of the year it is the perfect time to evaluate your current financial situation and decide how to move forward.

There are several different things you can do to make sure that you are set up for a successful 2021. Chief among them including sitting down with your estate planning lawyer and financial professionals to discuss what 2020 looked like for you and potential planning for 2021.

Some of the most important things you can do before December 31st include:

  • Refocusing on goals to develop a plan that aligns with your unique family needs in your financial and estate plan.
  • Maxing out your retirement contributions.
  • Using any dollars put inside flexible spending accounts.
  • Looking at marginal tax rates for surtaxes on investment income, capital gains taxes and the general marginal tax rate.
  • Looking for opportunities to leverage charitable gifts to accomplish philanthropic goals.
  • Looking at estimated taxes and required minimum distributions that could influence your 2020 and 2021 plans.
  • Adjusting any withholding if you may be subjected to an estimated tax penalty. You can ask your employer to increase your withholding for the rest of the year to help cover these shortfalls.
  • Evaluate your estate planning documents.

Your financial plan isn’t just thinking about the determine future, like a retirement date. It’s also about planning for unexpected costs or concerns, such as a sudden healthcare issue for you or a spouse that requires a nursing home stay. This is where your financial projections bump up against your estate plan. You need to have a general sense of where you want to go and use your estate plan as the roadmap.

Schedule a consultation with a dedicated estate planning lawyer in Pasadena, CA to discover more.

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