Year-End Planning: Our 2020 Checklist

Year-End Planning: Our 2020 Checklist

Ready to close the book on 2020? We can’t speed up time, but we can help you use it efficiently. Use this year-end planning guide to close out the year on a positive financial note.

Cash Flow and Balance Sheet:

  • Emergency Reserve - Does your cash reserve still line up with your needs? Income and/or expenses this year were different than expected for many people. Every situation is unique, but cash reserves of at least six months spending is a good place to start. Set a target that works for your needs.
  • Flexible Spending Account (FSA) - If you have an FSA, do you have a plan for the cash in your account? These accounts are “use it, or lose it,” so start thinking about where to use those dollars. Luckily, you have 90 days from the end of the year to use unspent money and some plans will allow you to rollover up to $550.
  • Home Mortgage - Have you refinanced recently? With interest rates at historic lows, this is a good time to make sure you’re not paying more than you should. Be sure to shop around to get the best rate and the lowest fees.
  • Annual Gifting - If you have plans to make significant gifts, make use of your annual exclusion amount of $15,000. Whether you are contributing to a 529 college savings plan, transferring shares, or gifting cash, if you don’t use your annual exclusion you lose it.
  • Charitable Giving - The CARES Act allows those who don’t itemize their deductions to take a $300 deduction for qualified donations in 2020. More importantly, and for those who do itemize their deductions, your favorite causes could probably use a little extra this year. When possible, we try to include some charitable contributions in our year-end planning.

Retirement Accounts:

  • 401(k) contributions - Were you happy with the level of your 401(k) contributions this year? If not, take a moment to increase your deferral percentages now and be ready for 2021. This is also a good time to review how you are saving. Is this the year you start making additional post-tax contributions to your 401(k)?
  • IRA/Roth IRA Contributions - You have until April 2021 to make contributions to your IRA or Roth IRA. But why wait? Make your contribution now and check off that to-do for 2020.
  • Roth Conversion - Unusual years sometimes provide tax-planning opportunities. Less income this year than expected? Ask your tax advisor whether it makes sense to take advantage of a lower tax bracket to convert funds from your IRA to a Roth IRA.
  • Review Beneficiaries - Did you have family changes this year? Make sure that your beneficiaries are up-to-date on your retirement accounts, life insurance policies, etc. Remember that beneficiary designations take precedence over wills, updating one doesn’t change the other. While you're at it, this is a good time to confirm your estate plan is up-to-date.  


  • Rebalance - Is your investment portfolio still in line with your target asset allocation? If not, it might be time to trim investments that have risen in value and/or add to investments that have declined in value. Place these trades in conjunction with an overall portfolio review including the next two items:
  • Tax-Loss Harvesting - Look for holdings that have decreased in value since purchase. You can realize these losses (sell the shares) if you need to offset capital gains from any point in the year. Be careful to avoid wash sale restrictions and to remain invested.
  • Capital Gain Distributions - Mutual funds in taxable accounts can make unwanted capital gain distributions. Review your portfolio to see if there are upcoming distributions you should avoid.
  • Fees - Do you know what you are paying for your investments? This might be a good time to ditch that mutual fund charging you an outrageous management fee. Review the expense ratios on your investments and decide if you think each investment is worth the cost.  


  • Review Goals - We’ve all learned a lot in 2020, does your financial plan still match up with your priorities? Whether it’s a home further away from the office, a career change, or a new retirement date, your financial plan should reflect your reality.
  • Review Spending - Your 2020 spending will likely look different from past years, but do you know where your money went? Take a moment to review spending by category. You never know, this could turn up planning opportunities. Are you content with how 2020 looked?
  • Make a Plan - What would year-end planning be without some actual planning? If this review reveals disappointments or worries, how will you make 2021 different? If you made positive strides this year, how can you build upon those successes? Whether you sit down on your own or engage an advisor (a fiduciary, fee-only advisor, of course), make sure that you are moving forward into the new year with intention.

Yes, there is a lot here, but tackling this list will leave you in a better spot than endless scrolling on your news feed and/or platform of choice. Why not devote some time to your financial health?

Finally, if this is the year that you engage with an advisor, know that One Day Advice is here to help. Schedule a 30 minute call with our team and take a first step towards financial optimization. There is no obligation; we'll work with you to see if our services are a good fit , and you'll leave the conversation with some clear direction. It's time for some year-end planning. Close out the year on a positive note and enter 2021 financially fit.

Gain clarity and peace of mind
around your finances

Get Your Free Financial Assessment