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Year-End Planning

There’s no time like the present when it comes to getting your financial house in order. This rings especially true near year-end when you’re faced with decisions regarding health plans and other benefit elections, preparing for taxes, rebalancing investments, or planning around a bonus you may have received from work. Of course, the end of each year is also filled with the holidays, travel, family visits, and work deadlines, but it’s important not to completely sweep your finances under the rug.

The following are some tips for approaching this stressful time of year.


I’m a huge advocate for trying to make the most out of any situation you find yourself in. I know it may be hard to think of open enrollment, taxes, and overall finances in that way, but the lens you view these items through can go a long way. For example:

  • Try thinking of open enrollment as an opportunity to ensure you won’t be wasting unnecessary money in the coming year while finding the best option for continued health care for your family.
  • Rebalancing investments may seem overwhelming, but it’s also a chance for us to realign our money with our values, setting ourselves up for accomplishing our long-term goals.
  • And as for a bonus…congrats! You’re being rewarded for your hard work and have been given money you didn’t expect. Don’t get caught up in the single fact of having to pay taxes on it.

Open enrollment:

This may sound like common sense, but it’s important to at least take time to review your current elections as these will likely carry through to next year if you don’t make any changes. It’s easiest (and very common) to just “stick with what I had last year”. But there can be two big problems with that.

  1. Things may have changed – either for you personally or in the benefits cost/coverage
  2. You may have even had benefit elections in previous years that you’ve never used

Sometimes it makes sense to switch health plans if you are expecting expensive surgery or the birth of a child. You may have had extra life insurance through work when you had a large mortgage that has been paid down. Or you may have previously signed up for a legal services benefit, despite having your own attorney that you already work with.

Again, it may not be exciting, but taking the time to review these items can really add up over time and you may only be able to make changes during your open enrollment window.

Rebalancing Investments:

There are many studies surrounding when is “best” to rebalance investments. And if you have a current strategy that works for you, stick with it. However, there are many investors that do not regularly review their investments to determine when and how much to rebalance.

Aside from things like tax-loss harvesting, there isn’t much of a science to specifically rebalancing at year-end, but studies do show that periodic rebalancing can benefit most investors. So, if you’re already motivated to update benefits and plan for taxes, keep up the momentum and consider rebalancing your accounts if it’s been a while.

Bonus Income:

As I mentioned earlier, if you receive a bonus, congratulations! This is often a sentiment of your hard work and a nice “thank you” to receive. In my experience, the best advice I can provide is to enjoy it but beware of lifestyle creep. It’s understandable to want to spend your bonus on something fun or something you’ve had your eye on for a while but couldn’t quite afford. Just keep in mind that continually spending the entirety of your bonus can become a habit of increasing overall spending each year and can quickly become income that you end up relying on.

Remember, this is “bonus” money, so it might be a good idea to save a chunk of it or pay down debt. I know, that’s boring. However, this could be a step in the direction of maintaining a reasonable lifestyle as you near retirement or a jump-start toward savings for the future.

[Similar to bonuses, receiving a raise is a good time to consider bumping up your 401(k). Even a percent or two might surprise you down the road.]


I’ve previously written about preparing for taxes in the new year, so I won’t bore you with the same information. Instead, I simply want to remind you that the beginning of each year gives you the most time to spread out any tax planning. For example, if you need to increase your annual tax withholding by $1,200, spreading it out over an entire year can be much more appealing than waiting until July to make the change. So, like rebalancing, if you find yourself tackling any other benefits items at the end of this year, it likely won’t take that much more effort to login to your payroll website during that time.

The goal of year-end planning isn’t to add to the stress. The goal is to take steps toward a less stressful next year. If you find yourself overwhelmed as we approach the end of 2022, hopefully this helps. And if you need someone to talk through these decisions with, we’re only a phone call or e-mail away.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendation for any individual. Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss. This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.