Financial Fitness

Your New Year Financial Checklist

7 money moves to consider as the year begins.

by Michelle Crouch - December 04, 2017


1. Plan efficiently to help minimize taxes. While it’s easy to think about taxes only in April, you can save more by practicing thoughtful tax planning all year long. Tax loss harvesting, where you sell shares of a stock that’s seen a downturn in value, may be more effective if done earlier in the year, for example.

Ask your CPA and Financial Advisor to work together to craft a year-end tax projection and suggest strategies to minimize your tax burden, whether it’s by deferring income or investment tax planning.

2. Update your investment plan. Set up a meeting with your Financial Advisor to look at how your investment portfolio performed last year and determine whether you need to rebalance or make adjustments.

Are you on track to achieve your goals? Have you become overweight in one asset class? Do you need to increase contributions to your retirement or college savings accounts? Are your beneficiary designations up-to-date? If you have investment accounts in a variety of places, consider consolidating with one custodian to make it easier to manage your portfolio as a whole.

3. Max out your 2018 IRA contribution early in the year. Most investors wait until the last minute to fund their IRAs, but the sooner you get your money in there, the more time it has to potentially grow. By making your contribution earlier in the year rather than next April, the money benefits from additional months of tax-advantaged, compounded potential growth — and that can make a big difference over the long term. If you haven’t already fully funded your IRA for 2017, or haven’t established one, do that first. You can open and contribute until the April 17 tax deadline.

4. Check your credit reports. With so many data breaches in recent years, it’s essential to check your credit report annually for identity theft and errors. Get one free report per year from each of the credit bureaus — Equifax, TransUnion, and Experian — at

To help prevent future identity theft, take the time to sign up for two-factor authentication and free transaction alerts, if offered by your financial institutions and credit card issuers.

5. Review your insurance coverage. Life changes, and so do insurance needs. Yet many families fail to adjust their insurance coverage as their wealth growths. To prevent gaps in coverage, review your insurance holdings and needs with a qualified agent at least annually.

Are your policies and beneficiaries up-to-date? Do you need to add or increase your liability coverage? Ask about other ways insurance — particularly life insurance — can help you meet your financial goals.

6. Craft a strategic plan for charitable giving. Having a thoughtful giving strategy may help you make more of an impact with your gifts. After you decide which types of causes you want to support, work with your Financial Advisor to determine the philanthropic vehicle that is the best fit, whether it’s a charitable lead trust or a family foundation.

Donor-advised funds may be a great option, as they allow you to take a tax deduction in the year you establish the fund, but then you can take your time considering how to disseminate your gift. Qualified charitable distributions from your IRA are another way tax efficient way to meet your philanthropic goals.

QCDs allow individuals who are at least age 70½ and have Traditional and/or Inherited IRAs to distribute up to $100,000 per year directly from their IRA to a 501(c)(3) nonproft with no federal income tax consequences. Gifts made to grant-making foundations, donor advised funds, or charitable gift annuities are excluded from these rules.

7. Engage in legacy planning. It’s never too early to start thinking about the long-term legacy you’re leaving for your loved ones. Review an estate planning checklist, then set up a meeting with your tax and legal advisors to create or update your estate plan to ensure it reflects your wealth transfer goals.

Are you doing everything you can to help minimize taxes? Should you consider a professional fiduciary for your trust rather than a family member? Do you have individuals named on your IRAs and qualified employer sponsored plans like 401(k)s? That is because those tax-advantaged accounts are best left outright to individuals and not to trusts or estates. If you have a potentially taxable estate, you may want to consider making lifetime gifts to those heirs now.

Michelle Crouch writes about consumer finance, parenting, and more from her home in Charlotte, North Carolina. Her work has appeared in Reader's Digest, Parents magazine, and The New York Times.

Additional Resources

It’s not too late: View our graphic covering key year-end planning tips.

Wells Fargo Advisors does not offer tax or legal advice.