5 Financial To-Dos Before Year End

December 13, 2019

Weekly Commentary December 13, 2019


5 Financial To-Dos Before Year End
By Tim Courtney, Chief Investment Officer

We all know that the end of the year can be very busy, but we also want to make sure that items requiring attention are addressed. Getting last-minute planning matters squared away can help make next year’s tax filing as efficient as possible.

While we initiate several actions automatically, there may be a few items you should consult your financial advisor about before the calendar flips to 2020.

1. Harvest capital losses. Where appropriate, Exencial sells meaningfully depreciated assets in client portfolios for losses to help off-set capital gains.1

2. Take required minimum distributions (RMDs). If you’re over 70 ½, the IRS generally requires you to withdraw a minimum distribution from tax-deferred retirement accounts, such as traditional IRAs and 401(k) plans, every year. Failure to do so could result in a hefty 50 percent IRS penalty on the amount not withdrawn.2 We contact clients who are above this age threshold to make sure their distributions for accounts we manage get processed before the Dec. 31 deadline.

3. Review trust distributions. Trusts that file under their own tax identification number may have distributions that are necessary either to fulfill trust provisions or for tax purposes. Many times these distributions need to be done by Dec. 31.3 If you have questions about this, we recommend contacting your advisor.

4. Consider charitable contributions. The end of the year is a great time to give back while simultaneously trimming your 2019 tax bill. One charitable strategy to consider is gifting appreciated securities to a charity of your choice, especially after a year of strong stock market gains.4 Donating long-term appreciated stock, rather than cash, is generally more beneficial for both the donor and the charitable organization because capital gains tax can be avoided.5

5. Max out employer-sponsored retirement plan contributions. While this is not doable for everyone, we typically recommend contributing the full amount to your 401(k) or similar retirement account before year end to maximize your retirement savings and lower your taxable income. At the very least, you should contribute enough to meet your employer match – after all, it’s money that’s not coming out of your own pocket. In 2019, you can contribute a maximum of $19,000 to your 401(k) if you are under 50 and up to $25,000 if you are 50 or older.6

If you have any questions on year-end financial planning, please contact your Exencial advisor as soon as possible and we would be glad to help you.


1. Investopedia – Tax-loss harvesting definition
2. IRS – Retirement topics – Required minimum distributions (RMDs)
3. Investopedia – Do trust beneficiaries pay taxes?
4. Yahoo! Finance – S&P 500
5. CNBC.com – A better way to give: Donate stock instead of cash
6. Kiplinger – How much can you contribute to a 401(k) for 2019?


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