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End-of-Year Financial Planning Checklist


Your financial journey tells a story of decisions, aspirations, and preparation. The year-end review is the chapter where you script your intentions and acknowledge your concerns. Being proactive now reveals a path to financial fulfillment, ensuring that the outcome of your financial future is one of accomplishment and security.

Why Conduct a Year-End Financial Review?

As the year comes to a close, taking time for a year-end financial review is one of the most important things you can do for your family. It's a look back on your financial journey over the past year that helps you understand what went well and what didn't.

By doing this, you can make smarter choices for the following year as each of your decisions sharpen your financial skills. When it comes to managing your money, remember: it's not just about making decisions, it’s also about making the best ones.

What Should I Evaluate in My Annual Financial Review?

Retirement Planning

Preparing to close the current chapter of your financial story is a good time to look at another critical aspect of your journey: retirement planning. Ensuring a comfortable and stable retirement requires more than wishful thinking — it's a goal that demands concrete steps, careful consideration, and annual review. One thing you can do now is maximize your contributions to retirement vehicles, such as your IRA , 401(k).

401(k) Contributions

While contributing within your means is prudent, it's equally essential to stretch those boundaries if possible. Think of your contributions as the foundation upon which your future financial security rests. Servicemembers should consider their Thrift Savings Plan (TSP) contributions each year to ensure they are maximizing the benefit of the service component matching contribution.

Every year, the government limits how much you can contribute to retirement accounts like the IRA and 401(k). These limits aren't static; they change as you advance through life's stages. That's why an annual review of these figures is crucial — what was permissible last year may not hold true this year.


Required Minimum Distributions (RMDs) are an important part of your financial picture in retirement. What are they? RMDs are a requirement to begin withdrawing a specific amount from your retirement accounts each year after you reach a certain age. This law ensures that the nest egg you've diligently built over the years is redeemed and importantly, that the federal government can collect taxes on your tax-deferred gains. Let's take a look at why timing is everything when it comes to RMDs.

Take note: You may face a severe IRS penalty if you fail to withdraw your RMDs on time. This can significantly diminish your retirement savings.

Thanks to the Secure Act of 2022, your inaugural RMD isn't due until the age of 73 for 2023. This shift provides you with extra breathing room to strategize and optimize your financial arrangements.

73 Rule

Formerly the 70 ½ rule, then the 72 rule, now thanks to the Secure Act of 2022, the 73 rule, if you or your spouse reached the age of 72 in 2023, you don’t have to start taking RMDs until next year when you turn 73. Anyone who turned 72 in 2022, would need to have started taking RMDs last year.

The Anatomy of RMDs

Your retirement account balances and life expectancy calculate the amount of RMDs. This calculation guides the withdrawal amount you're required to take annually. A financial professional can help ensure you’re withdrawing a sufficient amount to avoid penalties.

Making Annual Charitable Contributions

Making charitable contributions before the year's end can be a strategic move that supports causes close to your heart and positively affects your income tax return. You can claim contributions made in the fiscal year as deductions on your upcoming income tax return.

You should always maintain records of your contributions, including receipts or acknowledgment letters from the organizations you support. This documentation can serve as evidence in case of an audit, ensuring your compliance with tax regulations.

Keep in mind that different types of charitable donations and organizations may have specific rules governing their deductibility. Consult a tax professional to ensure your contributions are eligible and appropriately documented.

Review Your Budget Before the New Year

By comparing your spending patterns against your budget, you can find smart ways to make progress toward financial stability and success.

Budget as Your North Star

Your budget is a strategic guide to your financial decisions. Evaluating this year's spending against your budget provides a panoramic view of where your money went and what adjustments might be warranted. Examine your spending categories to pinpoint trends and potential areas of excess. This review process empowers you to make informed decisions and reallocate resources more efficiently.

Account for Financial Changes

Your financial review should account for changes that occurred during the year. If you received raises, bonuses, or experienced shifts in income, consider how these factors influenced your spending or saving capacity. Also, look for any tax breaks or deductions that might impact your budget.

The Road Ahead

Your financial journey is an evolving story, and what you learned from this year's review will contribute to your future success. Adjusting your budget based on this analysis enables you to set more accurate financial goals for the upcoming year. It's a proactive step toward aligning your financial goals with your actual spending habits.

Put Your Bonus Into Savings

Putting bonus income into savings as part of an end-of-year financial review fosters disciplined financial habits. You can bolster your emergency funds and accelerate savings goals when you shield your windfall earnings from impulsive spending. Think of your bonuses as strategic assets that strengthen your financial security and bring you closer to your long-term objectives.

The Role of Investments in Your Checklist

It's time to shine a spotlight on the moves you made earlier in the year, ensuring that they align with your goals and financial well-being. By analyzing your investments, you proactively identify underperforming ventures, uncover growth areas, and strategically align your portfolio with the evolving financial landscape.

Review What Worked

Reflect on the new investments you made during the year. Evaluate their performance against expectations and weigh the potential benefits against the inherent risks.

Check Your Allocation

Has market volatility altered your initial allocation? Consider whether your current allocation matches your risk tolerance and financial objectives. An adjustment might be necessary to restore balance and manage risk.

Insurance Policies

Incorporating insurance policy review into your year-end financial assessment is a strategic move that ensures your protection remains robust and aligned with your evolving needs. It’s also a good time to double-check that your beneficiaries are current and up to date.

Do You Need New or Different Coverage?

If you've had significant life events, like a marriage, a new baby, or purchasing a home, or you retired or maybe lost a loved one, your coverage should adapt accordingly. An insurance review unveils gaps in coverage or opportunities for potential savings, guaranteeing that your policies mirror your present circumstances. This also ensures you're not overpaying for coverage you no longer require while finding the right balance between cost and protection.

How to Secure Your Financial Future

By embarking on a comprehensive year-end review, you lay the groundwork for a future that's not just secure but thriving. Defining your family's financial goals and addressing looming concerns is your path to financial empowerment.

Set Goals

Whether it's purchasing a dream home, funding your child's education, or bolstering your retirement, articulating these goals provides the direction needed to make informed decisions.

Plan Ahead

From college tuition to home repairs, acknowledging and planning for these financial commitments ensures you're well-prepared and can navigate them without straining your financial equilibrium.

Be Proactive

Addressing your family's financial goals and concerns at year-end empowers you to be proactive. This approach affords ample time to strategize, make necessary adjustments, and tap into potential opportunities. By confronting financial challenges head-on, you harness the power to shape a rewarding and well-prepared future.

Trust AAFMAA for Expert Financial Advice

As you look over your finances for the next year, AAFMAA is here to lend support. We understand the unique needs of military personnel and their families. Contact us today to learn more about our life insurance offerings and Membership benefits.

This article was originally published September 23, 2019.