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Year-End Wealth Management Opportunities

| December 09, 2021

It's the time of year when everybody has their mind on the holidays, making plans with family and enjoying the final month of the year. It’s also a good time to think about wealth management and some things to review as this year comes to a close. Here are some areas you may want to consider before you welcome in 2022:

Charitable Gifts

If there is a cause that is close to your heart, it’s a great time to consider how your donations can impact your wealth management strategy.

Do you know the benefits when you donate appreciated securities from taxable investment accounts? Not only do you avoid paying tax on an embedded capital gain, but you’re also going to put yourself in the position to possibly receive a current-year tax deduction.

Talk to our team about other strategies that can give you the chance to help other people while preserving your investments, such as bunching charitable gifts, utilizing Qualified Advised Distributions, Donor Advised Funds, and lifetime charitable gifts rather than traditional bequests.

Senior Investor Tips

Once you hit the age of 72, you are required to take distributions from your 401(k) and IRA accounts. Also, you can’t forget about the income tax you must pay on those distributions. When you work with an advisor who follows fiduciary guidelines to plan your wealth management strategy, all of these requirements should be considered well in advance of what’s required of you.

Forgetting about taking a distribution comes with some penalties. For example, you have to pay 50% in taxes on the amounts that should have been withdrawn. Fortunately, there is still time left to avoid that tax, as you have until Dec. 31 to make your required minimum distribution.

Individual Considerations

For those of you who are individuals with an employer-sponsored 401(k) account, you should consider last-minute contributions. Those 49 and younger are able to contribute a maximum of $19,500 in their 401(k) plans for the current year. If you’re like most investors, you haven’t come close to maxing out, but it’s time to think about making a last minute adjustment. For example, did you know you can take your year-end bonus and either put all or some of it in your 401(k)?

For those who are 50 and older, you can contribute a maximum of $26,000 a year into your 401(k), which means you have even more opportunities to get more out of your investment and make up for lost time.

At Heritage Investments, we know you’ve got your mind on many year-end activities, but we’re always working to help you establish a more robust wealth management strategy. Our firm is built on family values and being an honest, trusted resource for our clients, so if you’ve got some questions about what you should be doing with your hard-earned investments, let us give you a hand. Contact us today and let’s discuss your financial goals.