You should be looking into financial planning for the coming year but there are some things you can do before the clock strikes midnight on the last day of the year that will be beneficial. Money magazine offers its readers “7 Investing Moves You Need to Make by December 31.”
If you got a raise, raise your retirement savings rate. It is easy to keep your savings rate the same, especially if you have automatic deductions through a 401(k) with an employer but Money advises:
“If you simply stay the course and fail to raise your contribution rate periodically, you’re leaving money on the table. That’s because over time, being an aggressive saver and mediocre investor beats being a good investor with just average saving habits.”
The article illustrates how raising your savings rate by 2% can make a significant difference in your retirement account balance.
You should also look at adding to other retirement accounts like IRAs and HSAs. While you may focus on overall retirement savings through a 401(k) or IRA, don’t forget that you are likely to incur many health-related expenses that will take away from those savings. Since “HSAs are triple tax advantaged: Money goes in tax deferred, grows tax sheltered, and, if withdrawn for qualified medical expenses, comes out tax-free.” you should make the most of them.
Your retirement investments are not the only thing to look at before the year ends. Consider what stocks you can sell at a loss. Selling a stock at a loss means that you can use that loss to balance out gains you’ve made with other stocks or offset your income. When you sell an investment that has made gains, you will owe the government so if you have an investment that is losing and it is time sell, look into doing that before the year ends.