Year-End Planning: What’s Important and What’s Not

As we find ourselves in the midst of the festive season, it’s heartening to have you alongside as we delve into crucial considerations that often extend beyond the immediate financial realm.


Year-End Planning: What’s Important and What’s Not

Reflecting on the Year

Before we dive into the intricacies of year-end planning, let’s take a moment to acknowledge the swiftness with which 2023 has unfolded. As we stand at the threshold of a new year, the significance of our discussions goes beyond numbers and investments. The Christmas season brings with it a sense of warmth and togetherness, and I appreciate your presence amidst the holiday hustle.

Exploring Tax Harvesting: A Crucial Strategy

In our journey through year-end planning, tax harvesting emerges as a key strategy that often goes unnoticed. Unlike retirement accounts shielded by protective layers such as IRAs or Roths, brokerage accounts expose funds to taxation based on investments. The challenge lies in managing capital gains, realized when selling various securities. Tax harvesting strategically involves selling positions with losses to offset gains, a nuanced approach that optimizes tax efficiency. This is particularly crucial for non-retirement accounts, offering flexibility and steering clear of potential tax pitfalls linked to capital gains.

Despite its significant impact on overall gains, tax harvesting is an aspect that some firms and advisors tend to overlook due to the extra effort it demands. Here at our firm, we prioritize this strategy, recognizing its long-term implications even if immediate gains may not be glaringly evident on your statements.

IRAs: Navigating Required Minimum Distributions (RMDs) and Beyond

Transitioning to Individual Retirement Accounts (IRAs), the year-end demands attention to Required Minimum Distributions (RMDs). While the first year allows until April, waiting until then results in two distributions the following year. Proactive planning comes into play, with considerations like maximizing distributions during lower-income years or aligning them with significant life changes. Timely discussions around potential income alterations pave the way for strategic decision-making.

During the season of giving, Qualified Charitable Distributions (QCDs) become a noteworthy strategy. For those with a charitable inclination, directing funds from an IRA to a chosen charity offers both fulfilling your RMD obligation and contributing to a cause without the amount donated being treated as taxable income.

Beyond Finances: Addressing Crucial Family Conversations

While our focus often revolves around financial intricacies, it’s imperative to turn our attention to crucial family discussions. Two paramount topics include Power of Attorney and guardianship for young children. A Power of Attorney serves as a pivotal document, granting authority to a chosen individual in handling financial or healthcare matters during incapacitation. Open conversations with the designated person can alleviate stress during challenging times.

For families with young children, discussing and formalizing guardianship plans is of utmost importance. Though it may seem a topic of the past for some, it’s a critical consideration that warrants attention and open communication.

A Holistic Reflection: Beyond Year-End Numbers
As we stand at the cusp of a new year, let’s not only reflect on financial strategies but also recognize the profound impact that family discussions can have on our well-being and that of our loved ones. The conversations around tax harvesting and IRA planning are undoubtedly crucial, but the peace of mind derived from addressing family matters is immeasurable.

In the fast-paced world of financial planning, it’s easy to get caught up in numbers, investments, and tax strategies. However, there’s an aspect of planning that often takes a back seat in discussions – the personal and emotional side of preparing for the unexpected.

The Unthinkable: Planning for the Unforeseen

While many of us may not want to entertain the thought, the truth is that life can be unpredictable. What happens if the unthinkable occurs? Who will step in to take care of your children or loved ones? These questions, though uncomfortable, are critical to address.

I recently returned from a trip to Haiti, a reminder that life’s stability is a luxury not everyone enjoys. In discussions with my 10-year-old son, ASA, I was struck by his adamant plea to have everything legally and financially in place before my departure. His concerns stemmed from the instability he perceived in the country, and his questions forced me to confront the uncomfortable reality – what if something happened to me?

Peace of Mind: A Gift to Loved Ones

December First Friday Focus: Year-End Planning: What’s Important and What’s Not: ASA’s insistence on having a plan in place wasn’t merely a child’s worry; it was a desire for peace of mind. While it might not be the most cheerful holiday conversation, discussing contingency plans with family is an invaluable gift. Knowing that arrangements are in place provides comfort and assurance, especially for those who may not express it outright.

From Parents to Grandparents: A Shift in Perspective

As our lives evolve, so do our responsibilities. What may have seemed like a non-issue when raising our own children takes on new significance when grandchildren enter the picture. The conversations we had or avoided in the past may need revisiting, with an emphasis on ensuring that the legacy we leave behind isn’t just financial but encompasses a comprehensive plan for the well-being of our loved ones.

Bridging Generations: A Call to Action

Conversations about guardianship, power of attorney, and contingency plans are often challenging but necessary. As older generations, we have a unique opportunity to bridge the gap and initiate these discussions with our children and grandchildren. While it may not be the highlight of holiday gatherings, it’s an investment in the security and future well-being of the family.

Conclusion: Beyond Year-End Numbers

While year-end financial planning is crucial, it’s equally important to recognize that life encompasses more than just numbers on a balance sheet. As we approach the end of the year and spend quality time with family, consider adding these essential conversations to your agenda. The peace of mind and security they provide are gifts that far surpass any material possessions.

Year-End Planning: What’s Important and What’s Not: As the year draws to a close, I extend my warmest wishes for a Merry Christmas and a joyous New Year. May your holiday season be filled with meaningful conversations, shared laughter, and the comfort of knowing that your loved ones are cared for, no matter what life may bring.

Looking forward to reconnecting in 2024!


If you’d like to schedule a personal one-on-one call with Michelle, click HERE to access Michelle’s calendar and schedule a day and time that is convenient for you.

We serve clients in Mineral Point WI, Dodgeville WI, Platteville WI, Lancaster WI, Fennimore WI, Boscobel WI, Richland Center WI, Muscoda WI, Spring Green WI, Mazomanie WI, Sauk City WI, Middleton WI, Madison WI, Fitchburg WI, Verona WI, Mount Horeb WI, Barneveld WI, New Glarus WI, Monroe WI, Belleville WI, Oregon WI, Stoughton WI, Darlington WI, Cuba City WI, Hazel Green WI, Belmont WI, Dubuque IA, Freeport IL

Want to share this blog post? Click the links below!

Register for Monthly Newsletter