Toledo Business Journal article

By Phillip E. Bollin, Certified Financial Planner™

2014 is quickly drawing to an end, and before we know it the holiday season will be in high gear. Before you get caught up in all of the holiday celebrations and last minute shopping that goes along with the season, let us look at five steps you can take before the end of the year to ensure your financial success in 2015 and beyond.

  1. Take your required minimum distributions (RMDs). You are required to begin taking required minimum distributions by April 1st of the year after you turn 70 ½ years old, and annually by December 31st every year after from all traditional IRA and/or retirement accounts.   (Roth IRAs have no required minimum distribution amounts). The IRS website ( contains the tables necessary to calculate your RMD.

Failure to correctly take your required minimum distribution in a timely fashion can lead to a substantial tax penalty of 50% of the required minimum distribution amount.

  1. Review your beneficiary information. A lot can change in a year’s time, so it is important to make sure that your plans to pass assets to others are accurate and up to date. Did you get married this year? Divorced? Did a loved one pass away? Having your beneficiaries improperly designated can inadvertently leave loved ones out of your estate plans.

Take a few minutes to review all of your life insurance policies and annuity contracts. Are the beneficiaries correct? As long as you are the owner of the policy, you can change beneficiaries to remove an ex-spouse, or perhaps add a child who has reached adulthood. Finally, check the beneficiary information on all of your IRAs, including Roth IRAs, retirement plans, and pensions to ensure the beneficiaries are correct.

  1. Minimize your income tax burden. Although not everyone has the ability to control when they realize income, if you have some flexibility you can save yourself some income tax. Expecting a bonus? If you expect to be in a high tax bracket this year, then perhaps you can defer your bonus until 2015. Do you expect to be in a higher tax bracket this year? It may make sense to accelerate income and bonuses into the 2014 tax year and save yourself from the higher tax bracket in the future.

Planning on making charitable deductions? Make them by December 31st to qualify for your 2014 tax return. If you are anticipating any long or short term capital gains this year, you still have time to offset them with trades this year, perhaps coinciding with rebalancing your portfolio. Make sure to consult with your tax advisor before making any of these moves.

  1. Enroll in your 401(k) plan. Rebalance your 401(k) account. Not enrolled in your company’s 401(k) plan? You may be passing up free money. Although many companies temporarily suspended their matching contributions during the last economic downturn, many of these matches have been restored. By not participating in your company’s 401(k) plan you are not only jeopardizing your retirement prospects, you are also passing up a portion of your compensation. Also, since many employers are not making matching contributions until the end of the year, it is important to be enrolled on December 31st in order to qualify for your match. This may mean that you will want to delay your next career move until after January 1st, as well.

If you are already enrolled in your company’s 401(k) plan, the end of the year is a great time to rebalance your 401(k) allocation. If your plan will allow it, make sure you rebalance the entire allocation. If matching contributions are made in company stock, you may want to consider selling out of concentrated positions to more risk-diversified funds. Regular rebalancing of your 401k portfolio is a disciplined strategy to ensure you more frequently “buy low and sell high.”

  1. Fund your retirement plan. Unlike traditional and Roth IRA accounts, you do not have until April 15th of the following year to make your contributions to your 401(k), 403(b), SEP and Simple IRAs or other retirement plans. December 31st is the hard deadline. If you anticipate a potentially onerous tax bill next April you may want to consider stashing more away in your 401(k), 403(b), TSP, SEP IRA or Simple IRA.

And don’t forget about catch-up allowances if you are over age 50. Catch-up provisions are a great way for pre-retirees to reduce their income tax burden as well as ensure they will live comfortably in retirement.

A couple of hours of planning today can mean years of financial security down the road. You can request a free 2014 Last-Chance Financial Planning Guide Checklist from Bollin Wealth Management LLC with additional details on these planning tips, as well as dozens of others. Please call our office at 419-878-3934 or email to request a copy.