In this episode, I will walk you through a year-end checklist. There are checklists everywhere in the financial press and on social media of things you should do to lower taxes, lose weight, save money, and do anything else people want.
Most people take a quick look and say to themselves; I know that, or I have that covered. Thankfully, many people do, but unfortunately, many also don’t. So I will walk through such a checklist and give you some insight into why these lists don’t ever seem to change. Still, you hear the horror stories of a widowed second spouse that doesn’t get their spouse’s retirement plan because, inexplicably, the spouse never updates a beneficiary agreement to reflect that they divorced and remarried.
Or the person whose parents passed away and never took their Required Minimum Distribution (RMD), the child inherits the account and gets a letter from the IRS demanding payment of the penalties for not taking the RMD. The penalty is 50% of the amount not taken.
Finally, the person who gets a surprise at tax time because they never set up withholdings on Social Security or IRA distributions when they retired receives a nasty surprise.
These examples may all sound a bit ridiculous, but I assure you every year, I come across someone that had a problem that a simple review could have helped them avoid. So, I implore you to talk to your financial advisor or tax professional to discuss what has changed over the last year or even what you know will change in the coming year and avoid a surprise.
When do you want to know about it if you have a problem? My guess is as soon as possible.