It's time to maximize those year-end investment moves

Everyone loves to get a bargain. Remember that feeling when you found money in a drawer or pocket that you forgot about? Or the time when you got a discount and saved a lot of money on a big purchase? You feel like you really scored.

There are bargains and opportunities just waiting to be found in your finances, too. You just need to know where to look. This year-end checklist will help you find savings and take advantage of opportunities while they are still available in 2015.

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Spending and savings

Review your emergency fund. Life happens, and unexpected expenses pop up throughout the year. Review your emergency fund to make sure it doesn't need to be topped off or even increased. As an example, a client mentioned he was starting his own business. Rather than having the traditional six months' worth of expenses, I recommended upping the emergency fund to one year so he could give his new business a fair chance without the added stress of a six-month time limit.

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Use your Flexible Spending Account. Recently, the Internal Revenue Service allowed $500 in a- FSA to be rolled over and spent the following year. However, if you have more than that in your FSA, go get a new pair of glasses or finally get that cavity filled. If not, you'll lose it at the end of the year.

Review your spending habits and make any necessary adjustments to your budget. Websites like are great resources to track how and when you spend your money. It also takes the hassle out of doing it the old-fashioned way, with pen and paper. Take an hour to review Mint's "Trends" tab, where you can see exactly where your money went over the course of a year. From there, make adjustments to how much you spend and save based on your upcoming goals. If you choose to save more, make it automatic.

"If you're over age 70½ and have saved for retirement, make sure you take the appropriate amount out of your IRA, 401(k) or other retirement plan by Dec. 31."

Run your credit report. Visit to run a free credit report through Equifax, Experian and TransUnion. This allows you to make sure no one has stolen your identity and opened up a credit card or other financial account in your name. You can also look for any mistakes that could be hurting your credit score.

I recommend taking it a step further and setting calendar reminders four and eight months out to check your score again. Each of the three consumer credit-reporting companies allow for one free credit report a year. Therefore, in December use Equifax, in April go through Experian and in August finish up with TransUnion.

Make an appointment with all of the important professionals in your life. A lot can happen in a year. Be sure to schedule a meeting with your financial planner, certified public accountant, estate-planning attorney and insurance agent. If you don't, you could wind up missing out on an opportunity to save thousands from tax-planning strategies or be underinsured and not even know it.


Top off your retirement contributions. In 2015, you can contribute $18,000 to a 401(k), TSP, 403(b) or 457 retirement plan. Plus, if you're over age 50, you can contribute an extra $6,000. You have until Dec. 31 to max out your plan and receive the benefit of deferring your income. If you're contributing to a Roth 401(k), you have the same contribution limits, but you'll pay taxes on your contributions now while the growth in the account grows tax-free forever.

Make sure all Required Minimum Distributions (RMDs) have been satisfied. If you're over age 70½ and have saved for retirement, make sure you take the appropriate amount out of your IRA, 401(k) or other retirement plan by Dec. 31. The IRS penalty for not doing so is steep; it's 50 percent of the RMD shortfall.

If you've inherited an IRA, you'll need to take RMDs, too. Just because you're younger doesn't mean RMDs don't apply. A new client showed us an Inherited IRA statement that she'd gotten at her mom's passing. She had no clue she was required to take yearly distributions and, in fact, hadn't done so for three years. She now has to pay penalties for failing to take her RMD.


Consider converting your IRA to a Roth IRA. If you had a year with less income than usual (e.g., you experienced a net operating loss or you left a well-paying job), consider a Roth Conversion. As an example, a client we met with in the first part of the year had just left his company. As a former CEO, he knew it would probably take at least a year to find his next position.

During this time, when he was without any earned income, we recommended he convert part of his IRA to a Roth IRA. In a year where he was going to be in one of the lowest tax brackets, he was able to do a Roth conversion without having to pay much in taxes. This opportunity will be gone when he finds his next job, since his salary and bonuses will push him back into the highest bracket.

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Make a gift to loved ones. If you're looking to give away assets (particularly if you have a taxable estate), consider taking advantage of your annual gift-tax exclusion. For 2015, you can gift up to $14,000 to any number of people. For married couples, that means you can gift up to $28,000 per person without having to file a gift-tax return.

Realize capital losses or capital gains. If your investments have done poorly, talk to your accountant about realizing losses. This can be a great tool to offset future capital gains by reducing your ordinary income by $3,000 a year until the losses are used up. On the flip side, consider realizing capital gains if you have less income than usual. This lets you lock in gains while paying less in taxes.

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Consider the tax implications of trades. Before placing trades near the end of the year, consider what this will do to your taxes come April 15. You may not want to realize a lot of gains this year and have to pay taxes on them next year. Instead, wait to place those trades until January and you will delay having to pay taxes on them for another year.

Adjust your tax withholding. Think back over the past year, and if you've gotten married, divorced or had another child, chances are you'll need to adjust your withholding on your W-4. Talk to your CPA so that you don't end up giving the government an interest-free loan or, worse, owing a penalty for not paying enough tax over the course of the year.

Make your state income tax quarterly payment. If you're writing checks for your estimated tax payments, be sure to get your fourth quarter state tax payment in prior to Dec. 31. This allows you to take the deduction on your 2015 tax return, as opposed to waiting until 2016 if you had paid it in January.

Donate to charity. You have until Dec. 31 to make charitable contributions. This year, instead of giving your favorite church or charity cash, gift appreciated stock. You won't have to pay tax on the capital gains, and neither will the charity when they receive your gift. Plus, you'll receive a charitable deduction on your tax return. It's a win-win for everyone.

Estate planning

Talk about your estate planning and end-of-life wishes with your family. Talking about death and your wishes around end-of-life care is never easy to discuss, especially not during the holidays. However, it may be one of the only times during the year the whole family is together. Carve out some time to share whom you've designated as your power of attorney, whether you want to be buried or cremated, and where your money should go. Your heirs will be glad to know your wishes and how you want to be honored.

Contribute to a 529 plan. The holidays are right around the corner, and if you have a grandchild, niece or child who seems to have everything, consider making a 529 college savings plan contribution on their behalf.

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This is a great way to use the power of compounding interest to help a loved one pay for college, as the growth in the account is tax-free (assuming it's used for qualified education expenses). Plus, if you live in Virginia and are over age 70, the state income tax deduction for contributions is limitless.

Update your estate plan. If you've had any major life changes in the past year—such as a new baby, a divorce or a marriage, or if one of your future heirs passed away—you should update your estate plan with an attorney. We recently met with clients who paid for trusts to be drafted years ago but had never funded the accounts. Not only did they not realize this, but the people they named in their trust to be successor trustees had both passed away.


Shop around your insurance policies. If it's been a while since you shopped around your policies, take five minutes to call an independent insurance agent. He or she can check with multiple companies for the most affordable policies. Also, be sure to let the agent know of any significant changes, such as a remodel, a new baby or a swimming pool addition to your backyard.

I was working with a child of a client who had been in a small car accident in her early 20s. Now, five years later and despite a squeaky clean record, she was still paying more than $1,000 a year for auto insurance. I called an independent agent, and by switching to a new carrier, she reduced her premium to $600 a year and was able to lump in a renter's insurance policy.

—By Barry Glassman, founder and president of Glassman Wealth Services.