Year-end Financial Moves to Consider + What I’m Thankful for
As we approach a rather interesting environment for the Thanksgiving 🦃 holiday, I wanted to share a few personal 💌reflections and some actionable ideas for year-end regarding your financial wellness 💪🏽 and year-end financial moves to consider.
This year has been difficult 😷 for everyone. Obviously, health 🏥care professionals, first responders, teachers👨🏫 and essential workers deserve our extreme gratitude – but they also deserve more of our listening skills. I hope the pandemic leads to an overhaul in the US as well as globally, to do a better job of acknowledging and addressing the need to offer improved, quicker access to mental health services, throughout our communities and age-groups.
Moving beyond gratitude for our society’s superstars, what else am I thankful for?
Professionally, I’m thankful 🙏🏼 for my clients, including values-based investors, women professionals and executives, women business owners and entrepreneurs, and women in transition, of course, as well as my friends, and colleagues at the various organizations where I volunteer or spend time. One of my favorite causes that I’ve spent a lot of time engaged with this year is the ImpactHUB Boston. The ImpactHUB is a global community for mission driven businesses and non-profit organizations.
In Boston, I’ve met so many great people who are passionate ❤️ about their organizations. I enjoy working with them to help expand their reach to impact more of our communities 🌍 and needs. In fact, I’d love to invite you all to our virtual Holiday Gifts that Do Good Market! The vendors are all passionate about their causes, and offer great gift-giving 🎁 ideas that will help you fulfill your wish list while supporting small businesses. Contact me if you’d like more info, or simply RSVP to attend (it is free to attend).
Personally, my husband and I are thankful for our lives with four 👩👩👧👧 daughters – four TEENAGE daughters at that (ages 14 – 19). Our lives are full of drama and music 🎶 and laughter, AND . . . bickering, crankiness, and the comments such as, “Do you have to breathe like that?” So while I’m a social person – and this period has been challenging for me, I am thankful that I do get a LOT of interactions (many fun and some not so fun) at home – but I wouldn’t change it for anything.
We try hard in our family to encourage empathy and philanthropy throughout the year. This Thanksgiving, we will ask our daughters to decide, individually, or together, which cause they would like to support this year on Giving Tuesday. We will gift match their own personal 💵 support. They can decide separately to support something meaningful for them, or they can unite their passions ❤️and financial support and decide to make a larger gift to one charity. I’m looking forward to hearing what they come up with!
I’m also thankful for nature 🐝. I like to be outside as much as possible, and am lucky to live near a forest 🌲, which allows me to ‘forest bathe’ daily. It also provides great entertainment – our recently installed night-vision cam has shot some great pics of turkeys 🦃, raccoons 🦝, coyotes, AND even a fisher cat – see pic below! Don’t worry – we don’t let the dog out unleashed at night – they are scary animals.
So that is just a few of the things I’m thankful for. I’m sure you have yours, and I would encourage you to really stop, breathe, and feel grateful for what you DO have in your life. We like to go around the table during Thanksgiving – and either share verbally or DRAW what we are all thankful for – sometimes the drawings are better than the words! And do keep those drawings - those are fun memories to look back on.
Now let’s turn to some year-end thoughts for your financial wellness, including some potential quick-tips for money savings ideas.
Health Savings Accounts (HSA) and Flexible Savings Accounts (FSA)
If you have one, the CAREs ACT added a provision allowing you to use HSA funds to purchase feminine menstruation supplies. It is crazy that this is a NEW provision, but nonetheless, it is something to be aware of if you do, indeed, have an HSA or FSA plan. (Go here to learn more). PLEASE NOTE – we are not sure if this will continue POST-COVID 19 – so you may want to consider this option now.
Fitness Fee Reimbursement
Another benefit to explore is fitness 💪🏽 🚴🏼♀️ fee (health club/virtual memberships) reimbursement via your insurance company. In my case, I have not visited my cross-fit gym for months, and don’t plan to for a while. I do, however, subscribe to a monthly in-home fitness offering. I was told by my insurance company that those monthly fees are now eligible for the fitness reimbursement benefit. So ask your insurance company if you are eligible for your Fitness Reimbursement on your monthly virtual fitness subscriptions! It is in their interest as well as your own – the healthier/fitter you stay, the fewer doctor visits you may need – so Win-Win all around.
COVID 🦠 Testing Fees
COVID testing – if you have paid out of pocket for COVID 🦠 testing, be sure to call your insurance company. Many times they should and will pay for those tests – you may have to figure out how to work it through the system. But given that sometimes tests cost a LOT, it may be worth your time to inquire about coverage.
Roth IRA conversions – is this the year?
Should YOU consider a Roth IRA conversion this year?
With a Biden Presidency , and given the government deficit, we very well may see increased tax rates in the future. If so, you may want to evaluate whether a ROTH IRA conversion makes sense. In a nutshell, you ‘convert’ tax-deferred IRA funds now, and pay the taxes on those funds now. But the funds then continue to grow tax-free forever. In most of the cases I’ve reviewed, the break-even period for this strategy tends to be at least 8-10 years – but if you have that time, it could make sense. Also, this is not an ‘all or nothing’ strategy – but rather, you can consider converting just a portion of your tax-deferred IRA at a time. Obviously, this is not a personal recommendation to YOU, but it is a suggestion to discuss this strategy with me today.
Review your Estate 🏘 Plan 🗂
I typically recommend that clients review their estate plan every few years or more often if they change 🏘 residence state. This year, more than ever, you should be checking in with your estate planning attorney (I have recs if you need them), to be sure that you, your spouse, AND your adult children, have the necessary docs (Will, Power of Attorney, Health Care Proxy, HIPPAA Release, and any Trusts).
And if you’re single 👩🏻💻, and have not yet completed your estate planning documents, please consider doing so now! Oh my gosh – I cannot stress enough how important this is.
If you are over age 70.5, the CARES Act removed the mandatory RMD (required minimum distribution) for this year. Please check 🕵️♀️ with your provider and let them know if you do still want it, or ask if they need something from you to SKIP the RMD (if you have not already taken it).
Charitable Gifting Year-End Strategies
If you are charitably inclined 🐕🌱🤝, and have never heard of the QCD, or Qualified Charitable Distribution, this may be something for you to consider. You must be over age 70.5, and it is best to have your provider make the payment directly to the charity of your choice. But when you do so, those funds do not show up in your taxable income. Even if you feel you are too late to the game for this year, it is a great strategy moving forward. Instead of writing checks out of your cash, send your causes funds from your IRA – and save the income taxes while doing good!
The SECURE Act modified ‘STRETCH’ IRAs – PAY ATTENTION!
The SECURE Act modified our ability to STRETCH IRA assets over beneficiary lifetimes. If you plan to leave retirement (IRA) assets to children, they will no longer be able to take their RMDs stretched over their lifetimes – and will have to withdraw 100% of the account value within 10 years. (there are some exceptions to this rule – for example, spouses and disabled beneficiaries). This change may potentially result in the necessity for you to review your financial and estate plans.
So what do you do now?
One idea is to use a portion of your RMDs to fund a life insurance policy that will pay out a tax-free benefit to the policy beneficiaries. It may be worth your time to discuss this scenario with me. We can take a look at insurance illustrations and see if this strategy makes sense for you and your long-term financial goals.
Sustainable (ESG = Environmental 🌱, Social 🤝, and Governance) Investing Considerations
Do you know what that means? Have you heard of ESG investing – which is proactive regarding Environmental, Social and Governance issues? Some examples of the types of issues ESG and Sustainable Investing cover:
· Which grocery chains offer paid leave for their employees to recover and get back to work?
· Which companies proactively manage the impact of their supply-chain on natural resources?
· Which companies support diversity 🧕🏾👨🏽🤝👨🏾 on their Boards?
· Which companies promote societal ❤️ health and well-being?
· Which companies may be at the forefront of a green ☀️revolution?
· Which companies are focused on water 🚰 resources?
If these are questions that engage you, we would love to talk. We have so many options available for investors interested in aligning their financial resources and investments with their values.
Wow. In spite of our current pandemic challenges, I do believe we have a lot to be thankful 🙏🏼 for. There is also a lot to consider in terms of year-end planning. While I only offered a few ideas, there are many more year-end strategies I could discuss.
If any of these ideas intrigue you, or you would like to learn about others, please SCHEDULE TIME WITH ME TODAY SO I CAN ANSWER YOUR QUESTIONS AND HELP YOU!
Let me help you proactively close out your financial plan for 2020 and move proactively into 2021.
Wishing you and yours a HAPPY 😃, HEALTHY 💪🏽, PROSPEROUS 🌱 holiday season.
Peace ☮️ and gratitude 🙏🏼,
Catherine