Five Financial Steps To Finish the Year Off Strong

Five Financial Steps To Finish the Year Off Strong

When you watched the New Year’s Eve countdown and raised your glass to 2017, did you make any resolutions to put your finances first this year? Finance-related resolutions are the third most popular New Year’s resolution, following self-improvement and weight loss. (1) Millions of people strive to get out of debt, save more, or accomplish a financial milestone, whether that’s purchasing a vacation home or retiring. If you fall into this camp, how did you do? Did your resolution fall to the wayside, as many do?

The good news is that it’s not too late to make some headway on your 2017 goals, but you need to start now. The holidays are in full force, so take care of these important financial actions before you ring in 2018.

1. Be Proactive With Your Taxes

The last thing you probably want to do during this celebratory season is think about taxes, but once January hits, tax season is in full force. Get a leg up on tax season now by doing these two things:

Make Deductions Work For You

Maximizing your retirement savings is an ideal way to save on your taxes as well as increase your nest egg. If your employer offers a 401(k), you can contribute up to $18,000 in 2017. If you are over 50, you can also take advantage of catch-up contributions of an additional $6,000.  If you don’t have the opportunity to save through an employer-sponsored plan, you can still invest in an IRA. IRA contribution limits for 2017 are $5,500 per person, with an additional $1,000 for those over 50.

Contributions to HSAs (health savings accounts) are also an excellent vehicle for reducing your total taxable income. The 2017 contribution limits for HSAs are $3,400 for an individual or $6,750 for a family. You can also make a $1,000 catch-up contribution if you are over 55. For the 2016 tax year, you have until April 18th to contribute to HSAs and retirement funds to benefit from this deduction.

Some additional deductions that may apply to you are state sales tax on major purchases, student loan interest, and medical and dental expenses.

Organize Your Paperwork

This is a crucial step to ensure a smooth filing experience. Gather records and account for all income, most commonly in the form of a W-2 or 1099. Your employer is responsible for getting these documents to you by January 31st, but even if you don’t have these documents yet, there are others you can start organizing now:

  • Records of charitable contributions over $250
  • Information from prior years’ tax returns
  • Rental income
  • Mortgage interest and property taxes paid
  • Dividend income

Mason & Associates offers various tax services to help you make the most of your money. If you want to make the most of your tax benefits for 2017, please reach out to Anne Shim and her team.

2. Double Check RMDs

If you’re retired, review your retirement accounts’ required minimum distributions (RMDs). An RMD is the annual payout savers must take from their retirement accounts, including 401(k)s, SIMPLE IRAs, SEP IRAs, and traditional IRAs, when they turn 70½. If you don’t, you may face the steep penalty of 50% of the distribution you should have taken. To calculate your RMD, use one of the IRS worksheets or contact one of our skilled team members to help you with this process.

3. Review Medicare And Social Security Benefits

Even if you are satisfied with your Medicare benefits, it never hurts to take another look. Analyze your health and determine if you will require any major healthcare interventions in the next year, such as surgery or changes in your medication. Then, evaluate your Medicare options to ensure you have the right plan for your situation.

In terms of Social Security, this is a good time to examine your Social Security statement to verify that they have the most current and accurate information. If you do not have a recent statement, you can view yours online by setting up an account at, or you can request a paper copy from the Social Security Administration. Your social security statement includes estimates for your monthly benefit if taken at age 62, your full retirement age, or the maximum benefit at age 70. It also contains estimates of disability, family and survivor benefits as well as Medicare information.

Your statement also lists your earnings history. It is important to review this for errors because this is what your benefit amount is based upon. As benefits are calculated based on the top 35 years’ earnings, it may be worthwhile to work a few more years if you find yourself with just shy of 35 years’ worth of wages.

If the thought of Medicare and Social Security makes your head spin, be sure to save your questions for Liliana Verduzco, our Insurance Benefits Specialist.

4. Update Your Gifting and Estate Plans

If you have taken the time and energy to create an estate plan, you’ll want to check in periodically to ensure all the documents are up-to-date and no major details have changed. Any major life event is a good time to think about updating your estate plan documents. If you change any of the beneficiaries in one place, such as a life insurance policy, make sure that they are consistent with the other documents so that there is no confusion.

If gifting is one of your long-term financial goals, it’s never too early to start planning for the legacy you want to leave your loved ones without sharing a good portion of it with Uncle Sam. Each year, you can gift up to $14,000 to as many people as you wish without those gifts counting against your lifetime exemption of $5 million. If you’ve yet to gift this year or haven’t reached $14,000, consider gifting to your children or grandchildren by December 31st.

With his background in the legal field, Thomas Mason is the one to go to for any estate planning and legal questions.

5. Revisit The Basics

The end of a year is an ideal time to review your overall financial situation and make sure you are on track with your goals. Check your budget to make sure you aren’t overspending and adjust if necessary. Take a second look at your emergency fund to ensure that there is enough to handle any unexpected curveballs life could throw at you.

As we prepare to turn the calendar to a new year, give yourself a financial check-up and make the changes necessary to set yourself up for a successful 2018. Do you need to take any of these steps before the ball drops on New Year’s Eve? Any one of our team members would love to help you finish the year off strong. Contact our office today by calling us at (323) 254-3072.

About Mason & Associates, Inc.

Mason & Associates, Inc. was founded in 1989, specializing in Life Planning for individuals, families and small businesses. Life Planning places a person’s core life values at the heart of the advice process and focuses on the human aspects of financial planning.

As a client, your personal story is key to our planning process. That is why we strive to build a close relationship that will encompass every aspect of your life. Together with our team of professionals, we guide you through the process of identifying what is important to you, your goals, your dreams. We then put into place a financial road map to set you on your way towards achieving your objectives.

Our responsibility does not end there. As you encounter bumps in the road, changes in goals or any other roadblocks, we are there to offer advice and guidance. We are there to celebrate your successes and cope with your challenges. We work alongside your other professionals such as your attorney and your CPA to be sure all of your legal and financial needs are aligned.



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