As we approach the end of 2015, here’s a check list of some of the things we need to make sure we’ve taken care of before it’s too late.
Max out contributions to your retirement plans
- 401k
- 403b
- 457
- Traditional IRA
- Roth IRA
Rebalance
If the market movements have altered your asset allocation, you should rebalance back to your desired asset allocation. Remember, rebalancing is about resetting portfolio risk to the level you initially decided was right for you.
Tax-Loss Harvest
If you have losses in our taxable account, you might want to harvest them to help offset any gains that your funds distribute or that you’ve realized by selling. In addition to offsetting gains, any unused losses can be used against ordinary income (up to $3,000 per year). And, if you still have unused losses after offsetting gains and $3,000 of income, then the remainder can be carried forward and used in future years.
Take Required Minimum Distribution (RMD)
If you’re 70.5 or older, you’re required to take minimum distributions from your qualified retirement accounts. The penalty is very stiff for failing to do so (50% of the RMD that you didn’t take).
Pay Estimated Taxes
If you’re required to pay estimated taxes, make sure that you’ve done so in a timely manner, since there are penalties for failing to do so.
Happy holidays to all.
Mel Lindauer, CFS, WMS is one of the founders of the Bogleheads community and co-author of The Bogleheads’ Guide to Investing along with Taylor Larimore and Michael LeBoeuf. He is also co-author of The Bogleheads’ Guide to Retirement Planning
