Robert Toomey, CFA/CFP, is Vice President of Research for S. R. Schill & Associates on Mercer Island.

Robert Toomey, CFA/CFP, is Vice President of Research for S. R. Schill & Associates on Mercer Island.

The ‘year end’ elements of financial planning | Guest column

  • Tuesday, December 28, 2021 12:17pm
  • Business

With the end of the year fast approaching, we remind clients that now is a good time to review key aspects of their finances.

As financial planners, there are a few things we consider highly important for most people. Tax planning is always at the top of the list. We encourage clients to review realized gains and losses in taxable investment accounts and, if necessary, take advantage of loss harvesting strategies to reduce net taxable gains.

Estate planning can also be important for many clients. Appropriate gifting strategies or transfers should be considered with regard to managing estate taxes. Utilization of the $15,000 annual gift tax exclusion, available to everyone, can be helpful for many people seeking to make non-taxable gifts or transfers for estate reduction purposes.

Making year-end charitable donations can also be helpful in reducing estates as well as reducing income taxes, even with the higher standard deduction amounts. We also encourage clients to assess and maximize contributions to all available qualified retirement plans, such as 401Ks and IRAs, in order to maximize tax deductions arising from their contributions. Also, for some individuals, converting all or portion of qualified retirement accounts (e.g. IRAs, 401Ks, etc.) to a Roth IRA is worth assessing if it makes sense from a tax and/or estate planning standpoint.

Another important element of one’s year-end financial checklist is a review of one’s financial plan. We strongly encourage all of our clients to evaluate their plan at least once a year. There are many reasons why an annual plan review is important. Revisiting the plan annually can be beneficial as tax and estate issues usually come up during the review. In addition, an annual plan review will address changes and updates in spending, income sources, assets, and asset management. Disciplined monitoring of these elements can make or break a financial plan.

The “year-end” element around planning brings up another important aspect of the numerous benefits a financial plan can provide over time. One of the most important benefits includes strengthening the clarity or assessment of financial resource adequacy. In other words, is one on track vis-a-vis their financial resources and spending to achieve the goals of their plan? A financial plan, including an annual review, should impart greatly improved discipline around one’s investments and can help optimize the positioning of one’s financial assets to provide the highest probability of success. Adhering to the investment and spending disciplines within one’s plan has shown to greatly improve the probability of achieving one’s financial goals.

We do a lot of client plan reviews towards year end. It is a great way for most people to enter the new year with confidence. It is never too late to start a financial plan and actually never too early. Waiting is the worst decision particularly if one has concerns, apprehensions, or specific financial problems that could be addressed through a comprehensive financial plan.

Robert Toomey, CFA/CFP, is Vice President of Research for S. R. Schill & Associates on Mercer Island.


Talk to us

Please share your story tips by emailing editor@kentreporter.com.

To share your opinion for publication, submit a letter through our website https://www.kentreporter.com/submit-letter/. Include your name, address and daytime phone number. (We’ll only publish your name and hometown.) Please keep letters to 300 words or less.

More in Business

t
Sysco employees show off job skills at Kent warehouse

Company holds competitions in warehouse work and truck driving

Summer Passports can be found at all 12 participating women-owned businesses. Courtesy photo.
12 local women-owned businesses launch summer passport program

In an initiative to boost small businesses in Maple Valley, Covington and Black Diamond, shoppers and patrons of each women-owned business will be eligible to receive weekly raffle prizes.

t
Kent Chamber of Commerce CEO Harris to participate in leadership program

U.S. Chamber of Commerce Foundation selects her for national business course

Courtesy Photo, Safeway
Two Kent grocery stores on Kroger-Albertsons sale list

Safeway on SE Kent-Kangley and QFC on SE 240th Street

t
Kent-based Blue Origin completes seventh human spaceflight

Six-member crew included Ed Dwight, the nation’s first Black astronaut candidate in the 1960s

t
Christie Nelson new leader of John L. Scott office that serves Kent

Office also handles Covington and Maple Valley with 60 brokers

t
Kent-based Blue Origin’s seventh human flight set for May 19

New Shepard-25 will launch from West Texas

t
Kent’s copper-colored building near Highway 167 to become banquet hall

Facility on Washington Avenue South previously housed LA Fitness; newspaper printing plant

t
Kent-based Stoke Space names retired US Space Force leader to board

Lt. Gen. John E Shaw appointed to Board of Directors

t
City of Kent again looking for new tenant at Riverbend restaurant

City terminates lease with Half Lion Public House, which had hoped to reopen at golf complex

t
Kent-based Blue Origin announces crew for next space flight

6 members to include former Air Force captain selected in 1961 as first Black astronaut candidate

t
Kent man among 40 Under 40 honorees by Puget Sound Business Journal

Andy Song, 33, works as chief operating officer at Kids and Family Counseling