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• The last few months of the year are a good time to check your finances.
• Spending tends to change over time, so update your budget to take these changes into account.
• Rebalance your investment portfolio and consider tax-saving strategies with the help of a financial advisor.

Each year, when the summer heat cools and the leaves start to change color, it’s a signal that we’re nearing the end of the calendar year. Don’t forget to check too.

We spoke with financial experts to put together a list of some of the most important things to put on your year-end financial to-do list. (Tasks you can do in ), sorted by advisor and items that may require careful calculations.

1. Update beneficiary and password

You should consider adjusting the beneficiaries of each account whenever there is a family change, such as family loss, marriage, divorce, or childbirth. A beneficiary is someone who receives money when you die.

Beneficiaries can renew with retirement accounts such as 401(k)s, IRAs, and life insurance. However, in some cases, you can also add payees to your checking and savings accounts.

“This is a simple step that can avoid major headaches for heirs as money can be tied up in probate for months if there are no designated beneficiaries,” said a certified financial analyst. says Doug Carey, owner and president of The List (CFA). Failure to renew his WealthTrace beneficiary, a retirement and financial planning software company, risks transferring assets to unintended beneficiaries.

“Don’t assume your will covers all of this, because it often misses what happens to some accounts if you die,” Carey adds.

In addition to updating beneficiaries, consider updating passwords for each financial account. As the world becomes increasingly digital, financial security is merging with online security. In most cases, a password manager can help with this process, as it has the ability to generate and store complex passwords and warn you if you use the same password on multiple sites.

2. Check withholding

If there have been significant changes during the year, it may be a good time to review your tax withholdings and update your Form W-4. For example, changes in marital status or dependents can affect the amount withdrawn from each paycheck.

“Each year, both employees and business owners underestimate their tax burden,” says Kamari Ellis, registered agent and founder of the Philadelphia Tax Team. If the withholding amount is too high, you will pay too much tax and receive less salary, but you can get a refund at the time of tax payment. If the withholding amount is too low, your salary will be larger, but you may have to pay the IRS money. “This tax liability often causes undue stress and anxiety for taxpayers,” Ellis adds.

3. Get the most out of your retirement account and HSA

Maximizing contributions to your retirement account has long-term and short-term benefits.

In the short term, if you have a health insurance plan with a higher deductible, a 401(k), or a traditional IRA, and if you can contribute to an account such as a Health Savings Account (HSA) to lower your taxable income there is.

“If you can’t contribute the most, at least make sure you have company match. If you’re not using company match, you’re leaving money on the table,” Carey said. says.

4. Adjust your budget for inflation

The end of the year is a good time to assess your budget and adjust expenses that may change over time. For example, insurance premiums for cars, groceries, streaming service subscriptions, and utilities tend to rise from year to year, especially when inflation is high. Without these considerations, you may not know exactly where your money is going.

There are some apps that give you the ability to easily see how much you have spent and how those expenses have changed throughout the year. Connor Spiro, CFP® Professional and Senior Financial Consultant at John Hancock Advice, says, “Completing exercises like this will help you understand how much you’re really spending and set you up for a successful new year.” It helps to arrange

Failure to pay attention to these subtle changes in income and expenses can lead to spending more than intended or contributing less to long-term savings and retirement goals, compensating for these higher expenses. there is.

5. Rebalance your portfolio and adopt tax loss harvesting

Regularly rebalancing your portfolio is an important part of managing risk as an investor. Rebalancing is the act of returning a portfolio’s holdings to their intended allocation.

For example, at the beginning of the year, you invested 80% of your portfolio in stocks and 20% in bonds. As the year progresses and markets move, asset values ​​may shift to 65% equities and 35% bonds. Rebalancing will return you to your target allocation of 80% equities and 20% bonds.

“Before you make any adjustments, also consider your investment horizon and risk tolerance. Have these changed since the beginning of the year? I recommend that you strike a balance.”

In some cases, rebalancing involves selling assets and redistributing them to other areas, or increasing contributions to investment accounts to make up the difference. Pay close attention to your account type when selling and rebalancing part of your portfolio. This is because non-retirement accounts may be taxable. If you sell before the end of the year at a loss, you may be able to offset the capital gains in a process called tax loss harvesting.