The Finance Blogger


Smart Financial Moves to Consider before Year End

Smart Financial Moves to Consider before Year EndThe year is almost over and you still have time to make some financial moves before year end to minimize your taxes and position your investments for next year. We have compiled a short list of smart financial moves to consider before year end for this purpose. Here we go with our list:

  • Make a retirement investment – RRSP for Canada , 401k for the US
  • Contribute to an Education Fund
  • Complete tax Savings Transactions
  • Take advantage of Tax Free Savings Accounts ( Canada )
  • Consider Income splitting
  • Plan your Charitable giving
  • Review your Plans with your financial Adviser or Tax Adviser

Smart Financial Moves to Consider before Year End

A few more words about each of these ideas. Note, some apply to Canada, although most countries have something similar, so check with your adviser for suggestions in your country.

Make a retirement investment – RRSP for Canada , 401k for the US

There are lots of reasons to save for retirement, however one of them is that you need to do this every year and if you have not set aside some money this year, now is the time to do it. Don’t wait until after year end, do it now so that you can take advantage of any tax savings in the current year.

Contribute to an Education Fund

If you have kids and you want them to go beyond high school, it is a good idea to set aside money now to pay for their education. Education has become particularly expensive and families who start early can provide the best opportunities for their children. It is easy to do do when it is spread over many years rather than in one lump sum.

Complete tax Savings Transactions

If there are transactions such as selling stocks at a loss, now is the time to do it at year end. There are several things to remember – there is a 3 day settlement rule so you cannot wait until the last day; also there is a wait time before you can repurchase the stock if that is your intent. Governments realize that this is what many people and fund managers do every year. Understand what the rules are and then proceed. Your investment adviser can assist with this decision.

Take advantage of Tax Free Savings Accounts ( Canada )

This is something available in Canada and may be available in other countries. basically the government is encouraging people to save money and allows Canadians to save money and not pay tax on the income until it is withdrawn from the plan. It is a great way of hiding income until such time that you want to utilize it, usually in a year where you have smaller income than normal.

Consider Income splitting

If you can transfer income to a spouse who has a lower tax rate, some times you can decrease the total tax paid by a married couple. Consult with your tax adviser on this one.

Plan your Charitable Giving

It is always good to give and in most countries this is a tax deduction. Give money before year end to ensure that you minimize the total tax you pay.

Review your Plans with your financial Adviser or Tax Adviser

Regardless of what you do, it is a good idea to meet with your adviser prior to year end to review all of these financial strategies and others to ensure that your taxes are minimized and your investments are maximized for growth. You may also want to re balance your investment portfolio particularly if some stocks have gained while others may have not. As you near retirement, some investors will shift more towards income oriented investments and less on growth oriented investments.

Your adviser can help with all of these assessments and decisions.This is a good time to schedule an appointment with your adviser and take action on these smart financial moves to consider before year end. In fact you should meet with your advisor once every six months to discuss your investment portfolio and your retirement plan. Let your advisor know when you plan to retire so that he can make the appropriate recommendations


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One Response to “Smart Financial Moves to Consider before Year End”

  1. thankfully I read this year end tax savings suggestion blog. Now all I need to do is follow through with some of these ideas. the less tax I pay the better.

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