As summer comes to a close, many people begin thinking about the final months of the year. While most year-end financial planning conversations happen in November or December, September can be a useful time to start reviewing your financial picture.
Beginning the planning process early gives you more time to explore your options before year-end deadlines arrive. If retirement is on the horizon or you’re thinking about your long-term financial goals, September can be a helpful time to begin reviewing important decisions.
Time Creates Opportunity
One potential advantage to starting in September is that you still have time to make meaningful changes. By November or December, many financial decisions become rushed, and opportunities can be limited.
An early review can provide an opportunity to evaluate your income, investments, retirement accounts, and tax situation while there is still enough time to consider potential planning opportunities. Rather than reacting to deadlines, you can make proactive decisions that align with your overall financial plan.
Tax Planning Before It's Too Late
Many retirees and pre-retirees are surprised by how much flexibility they have when they begin tax planning early.
September is a great time to estimate your current-year tax situation and identify opportunities such as:
- Roth IRA conversions
- Evaluating whether tax-loss harvesting may be appropriate within taxable investment accounts
- Managing capital gains from investment sales
- Coordinating retirement account withdrawals
- Reviewing estimated tax payments
If you’re approaching retirement, taking a look at your projected income now may help you better understand some of the tax considerations that could come into play during the upcoming filing season.
Thoughtful Charitable Giving
If charitable giving is important to you, starting early can create additional planning opportunities.
Rather than writing checks at the end of December, you may want to consider strategies such as:
- Donating appreciated securities instead of cash
- "Bunching" multiple years of charitable contributions into one tax year
- Utilizing donor-advised funds
- Qualified Charitable Distributions (QCDs) for individuals age 70½ and older
These approaches may provide additional tax benefits while supporting the causes that matter most to you.
The key is to give yourself enough time to evaluate which strategy makes the most sense for your situation.
Reviewing Retirement Contributions
September can also serve as a useful checkpoint for retirement savings.
If you're still working, September may be an appropriate time to review contributions to employer retirement plans, IRAs, and other savings vehicles. Many individuals discover they have room to increase contributions before year-end or take advantage of catch-up contributions if they are aged 50 or older.
For retirees, this can also be an opportunity to review withdrawal strategies, required distributions, and upcoming income needs for the next calendar year.
Don't Push Financial Decisions to the Bottom of Your To-Do List
The final months of the year can become busy very quickly. Between family obligations, travel, and holiday activities, important financial decisions often get pushed to the bottom of the list.
Starting in September provides the time and flexibility needed to make thoughtful decisions rather than rushed ones. Small adjustments made before year-end may influence tax planning considerations, retirement planning strategies, and long-term financial decisions.
If you have not reviewed your financial plan recently, consider discussing your situation with a Rea Wealth advisor. A review can help identify planning considerations that may be relevant before year-end.
By Cale Ogi
Financial Advisor
This material is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation. Diversification does not assure a profit or protect against loss in declining markets and cannot guarantee that any objective or goal will be achieved. Tax-loss harvesting does not ensure a profit or guarantee against loss. Certain sections of this commentary contain forward-looking statements based on our reasonable expectations, estimates, projections, and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Past performance is not indicative of future results. Created with assistance from Copilot.
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