Year End Financial Planning Tips

I know the end of the year is B-U-S-Y. It’s easy to feel like you are spinning your wheels and not accomplishing a lot. If crossing things off your to-do list and completing measurable tasks gives you joy and motivation, these tips are for you: 

1. Revisit your financial goals and map out new ones 

What did you set out to do this year? Perhaps it was getting a promotion, finally buying that extra life insurance you need, or paying off your car loan.  

But wait – you can’t revisit your financial goals if you never set them in the first place. I wrote How to Set Realistic Financial Goals and have a free worksheet you might find useful. It comes down to asking yourself some key questions:  

  • Who do I want to be known as? 
  • How do I want to feel?
  • What do I want to have?  

Most of your financial goals should fit into one of these categories! Following the earlier example, you might have said, “I want to be known as a successful professional. I want to feel like my family is provided for and protected. I want to have no debt and comfortable savings.”  

2. Max out your savings 

  • 401(k)s 

In 2022, you are allowed to contribute $20,500 of your own wages into your 401(k). If you are older than age 50, you can put in an additional $6,500. It might be too late for you to max out your 401(k) this year, but you can talk to your 401(k) plan administrator about increasing your contribution rate for next year. 

  • Roth IRAs 

If you are below the income limits, you should also consider maxing out your Roth IRA. The Roth IRA is one of the best retirement savings accounts available. 

Technically you can contribute to your Roth IRA after the end of the year; you have until the tax filing deadline. However, it is a good practice to review how much income you earned for the year and plan to maximize your savings by year end, so you can do the same in the following year. 

Note: In 2022, if you are over age 50, you can contribute up to $7,000 for each spouse, if you have enough earned income to match that. Otherwise, you may contribute $6,000. 

  • Health Savings Accounts 

I won’t rehash the reasons I love health-savings accounts, because you can read them here. You can only contribute to HSAs during years you are covered by a high deductible health plan (HDHP), so you don’t want to miss the years you are eligible! 

In 2022, if you have individual health coverage, you may contribute up to $3,650. If you have family coverage, you may contribute up to $7,300. 

BONUS Tip: I’m a CFP® and yet I literally just learned the following fact this week. I am so glad I learned it, so I can’t help but write about it. If you switched from a family to an individual HDHP or vice versa, you CANNOT contribute the maximum amount for the year. There is a calculation based upon the number of months you were covered. You can read my example below or glance at page 1167 of IRS publication 2008-25 I.R.B. Here’s my example:

Mike was covered by a HDHP family insurance plan until June 15 of 2022. At that time, he switched to an individual plan. Can Mike still contribute the full $7,300? No. He must consider how many months he was enrolled in each plan on the 1st of that month. He applies the limit for each month and takes the average.

What is the average of these months? $5,430. That is how much Mike is able to contribute to his HSA for the year. 

3. Review your annual income and check for meeting limits 

It’s always a good idea to be very aware of what your gross income for the year is. Why? Because there might be limits you should try and stay under. Perhaps they are limits related to Social Security taxation, health insurance premiums, or childcare credits. Regardless, it’s helpful to know if you are close to these limits, so you have the opportunity to decrease your reportable income, if possible. 

4. Check your Required Minimum Distribution (RMD) 

If you have an inherited IRA or Roth IRA, a 401(k), or any other type of IRA (except a regular Roth IRA), pay attention. For inherited IRA/Roth IRA owners, you probably need to take money out this year. Talk to your advisor.  

For 401(k) and IRA owners, if you are over age 72, you DO need to take out your Required Minimum Distribution. Trust me when I say, you DON’T want to forget. It’s the highest penalized mistake. 

5. Charitable Giving 

I encourage you to give whenever and whatever amount you are financial able. However, it does pay to be strategic in how you give.  

If you were completing #3 (reviewing your income) and realized you might benefit from having a lower reportable income, charitable giving can be a great way to accomplish that. I have tips on how to decrease your taxable income through charitable giving here 

If #4 (checking your RMDs) applies to you, you might be able to benefit from Qualified Charitable Distributions (QCDs). You may give money directly from your IRA to a charity. It is not taxable, but it does go towards fulfilling your RMD. Note: you unfortunately cannot do QCDs from inherited IRAs. 

6. Buy a great holiday gift for a family member 

Lastly… would your year even be complete if you didn’t purchase Retirement Stepping Stones for a friend or family member?? 😊 Jest aside, this book is a great read that will surely leave the reader better off and more prepared than before. And remember, for other gifts, shop local! 


Happy financial planning and happy holidays! Visit for more blogs like these.