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However much we may look to draw out our Minnesota summers (Can the boat stay in another week? Can I get in another round of golf?), the first days of Fall seem to automatically trigger action-oriented lists that some ancient, amygdala part of our brains won’t allow us to ignore. Stack the firewood, get the storm windows on, clean and organize and, yes, pull and winterize the boat.  Come October at Tealwood, hardwired financial checklists rise to top of mind as well. Here are four main areas to consider…

  • Maximize Retirement Savings. Review your additional contribution opportunities for existing tax-deferred retirement accounts, remembering to factor in catch-up contributions where applicable. In addition, it is prudent to periodically review which types of tax-deferred accounts you may not currently be taking advantage of, but that may make sense for your situation.
  • CARES Act: Required Minimum Distributions (RMDs) Waived for 2020. If you are 70 1/2 or older and have already begun taking RMDs, it may make sense to take advantage of this year’s RMD waiver by doing a ROTH conversion.
  • Review your Philanthropic Plan. It is not too early to be thinking about charitable giving and/or gifts to family. Many custodians have early- to mid-December gifting deadlines, for example, for gifting appreciated stock. Also, it is important to review and coordinate your charitable gift goals within the context of your overall financial plan. For 2020 under the CARES Act, the deductibility caps of gifts have increased, which could help offset, for instance, tax consequences of a ROTH conversion.
  • Tax-Loss Harvesting. Tax-loss harvesting can be an effective part of your investing strategy. Reviewing year-to-date capital gains and affecting any tax-loss harvesting trades by mid-November allows buybacks to occur (after waiting the required 31 days) prior to the end of the year. Utilizing tax-loss harvesting can be significant in realizing tax savings.

 

This is a broad brush—caveats and exceptions apply. Your Tealwood advisor is happy to coordinate with you and your tax professional to reassess opportunities for savings, gifting, and tax efficiency.