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Ten Year-End Investment Strategies

Young couple meeting with an investments agent

As another year passes, it’s time to look at your investment strategies and make any adjustments before the new year. Use these ten strategies to make the most of your investments.

  1. Review your portfolio

    At year-end, you will want to review your portfolio to analyze your gains and losses. If you need to shift gears, now is the time where you can sell and harvest losses. Keeping detailed records during the year can make this process much easier.

  2. Defer or accelerate your income as needed

    With this unprecedented year, you may find yourself needing to make income changes. Calculate which tax bracket you are in. If you’re in a high marginal tax rate, you may consider deferring your income. You can also reduce your income if your investment will be affected as a result of higher taxes due to the Affordable Care Act. You can also accelerate your income as well if you are in a lower tax bracket, shifting some of your income to this year, rather than the beginning of next year. [1]

  3. Check your Flexible Spending Account balance

    Your employer plan may not allow you to roll money over into the next year, so make sure to spend the balance in your account on qualified expenses. If you don’t use it, you could lose it!

  4. Take your Required Minimum Distribution if needed.

    Typically, you would take your Required Minimum Distribution (RMD) by December 31 to avoid any penalties. However, due to COVID-19, legislation passed in Congress to waive required minimum distributions from retirement savings accounts for 2020. Now retirees can postpone their RMD until next year without penalty.

  5. Select next year’s employer benefits

    If you are currently employed, take advantage of Open Enrollment which usually begins in December. You will have the option to choose from available options such as a flexible spending account, health savings account, life insurance and more.

  6. Consider a Roth conversion

    If you do not qualify for a Roth IRA and are unable to contribute to one, consider contributing to a traditional IRA. After you make your contribution to a traditional IRA, you can convert those funds to a Roth IRA.

  7. Plan for life events

    A job change, home or car purchase, surgery or other expensive events require planning ahead. Be certain that you have enough funds to cover unexpected events or planned purchases that may come up in the future.

  8. Consider funding an HSA before year-end

    If you are eligible, contribute to your Health Savings Account. The deadline to contribute is usually in April, but by funding at the end of the year, you can make any adjustments needed for the future. You can still contribute to you HSA after year-end, and you can roll over any funds indefinitely that are still in the plan at the end of the year. [2]

  9. Review insurance policies

    Look over your insurance policies including home, auto and life insurance to determine if you have enough coverage or if your deductible may need adjusting. Make sure your insurance reflects your needs, and works for your budget.

  10. Review your beneficiaries

    Check that all beneficiaries on your accounts are accurate and up-to-date. Oftentimes, a change in family status, such as marriage, divorce, or death of a beneficiary requires an update to your accounts. By double-checking your accounts, you can be certain that your beneficiaries and accounts are correct.

Interested to learn more information on year-end investment strategies? We’re here to help! Contact Central Investment Advisors with any questions, or if we can help in any way.


[1]. Year-End Tax Tips – 5 Actions to Pay Less Taxes on Investments, Investor Junkie

[2]. Rules for Having a Health Savings Account (HSA), Investopedia

This material is intended for informational purposes only, and should only be relied upon when coordinated with individual professional advice, as individual situations will vary. Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA. Neither LPL Financial, nor its registered representatives, offer tax or legal advice. We recommend you discuss your specific situation with a qualified tax or legal advisor.