Closing the Year Strong: Essential Guide for Complex Financial Needs

By: William Lalor, CFP®, CFA & Jack Mahoney, CFP®

As the year draws to a close, it’s important for you to review your financial strategies and remain on track for both your short-term and long-term goals. Working with your Simon Quick Advisor to assess whether your risk tolerance has shifted can help maintain alignment with your objectives. This review not only helps maximize potential tax savings but also facilitates a timely realignment of your investment strategies.

To help you with this process, we've created the below guide along with a bonus year-end financial checklist PDF designed to support you in optimizing your financial strategy. Be sure to download the checklist and use it as a reference as you prepare for the upcoming year.

1. Review Your Investment Portfolio

• Assess Performance. Check how your investments have performed against your investment policy targets and benchmarks. Consider whether changes in market conditions or in your financial objectives warrant a portfolio rebalance.
• Risk Management. Evaluate if your current risk exposure aligns with your risk tolerance and investment timeline, especially in light of any life changes or economic shifts.

2. Offset Capital Gains (or Losses)

• Gains. Consider taking profits from appreciated investments, particularly if you’re in a lower tax bracket this year or can match against losses.
• Losses. Analyze your taxable portfolio for any underperforming assets that could be sold to realize losses. These losses can offset gains you may have realized throughout the year, thereby reducing your overall taxable income.

3. Retirement and Tax-Advantaged Accounts

• Ensure you’ve maximized contributions to retirement accounts such as your 401(k) and IRA. The end of the year is a great time to be maximizing your contributions.
• 2024 Contribution Limits.
1. 401(k), 403(b), or 457 Plans: Contribute up to $23,000 (or $30,500 if you’re 50 or older).
2. IRA Contributions: Contribute up to $7,000 (or $8,000 if you’re 50 or older)
3. SEP IRA or Solo 401(k): If self-employed, contribute up to 25% of net earnings, with a maximum of $69,000.
• Take your required minimum distribution (RMD) if you've reached the age where you’re required to take a minimum distribution or if you have certain inherited IRAs. Missing an RMD, could subject you to a 25% penalty on the portion not taken.
• Health Savings Account (HSA). Contribute up to $4,150 for individuals or $8,300 for families, with an additional $1,000 catch-up contribution if you’re 55 or older.
• 529 Education Saving Account. Contributions are made with after-tax dollars, but growth and withdrawals are tax-free, so long as the withdrawals are used to pay for qualified education expenses.

4. Conduct an Estate Planning Review

• Update Your Will and Trusts. Life changes such as marriage, divorce, the birth of a child, or the death of a family member may necessitate an update to your estate plan.
• Review Beneficiary Designations. Ensure the beneficiaries on your retirement accounts, life insurance policies, and other assets are up to date.
• Gifting. Consider the annual gift tax exclusion by giving up to $18,000 to as many people as you wish, tax-free.
1. Exemptions: If you haven’t already, work with your advisor to take advantage of the lifetime federal estate and gift tax exemption, which in 2024 is $13.61 million per individual. As part of the Tax Cuts and Jobs Act, this exemption is scheduled to sunset to around $7 million per individual on December 31st, 2025.

5. Evaluate Charitable Contributions and Donations

• Donations. If charitable giving is important to you and is part of your financial strategy, ensure that donations are made before year-end to qualify as a 2024 gift for tax purposes. Consider donating long-term appreciated stocks or assets to avoid capital gains taxes and receive a deduction for the full fair market value of the position.
• Donor-Advised Funds (DAF). Contributions to DAFs are tax-deductible in the year they are made, while the funds can be distributed to charitable organizations over time.
• Charitable Contribution Bunching. By "bunching" multiple years' worth of charitable donations into a single year, you can maximize itemized deductions and potentially enhance tax savings. This strategy, when combined with a Donor-Advised Fund (DAF), allows you to distribute the charitable gifts on your own timeline.
• Qualified Charitable Distributions (QCD). If you're 70½ or older, you can donate up to $105,000 directly from your IRA to a qualified charity. This distribution can count toward satisfying your required minimum distribution (RMD) and offers potential tax savings by excluding the donated amount from your taxable income.

6. Set New Financial Goals

• Reflect on your financial achievements for the year and set new goals for the upcoming year. This might include investment and savings goals, or plans for philanthropy.

Setting the Stage for a Prosperous New Year

Year-end planning is an excellent opportunity for you to fine-tune your financial strategies and prepare for the future. By systematically reviewing your financial profile, you can enter the new year with a solid plan that not only aims to protect but also enhances your wealth.

Consult with your Simon Quick financial advisor, tax professional, or estate attorney to tailor these strategies to your specific circumstances and to navigate complex financial landscapes more effectively.

For more information on how Simon Quick can support your year-end planning, reach out to us by email or phone: info@simonquickadvisors.com | 973-525-1000.

William Lalor, CFP®, CFA

Managing Director / Head of Financial Planning / Client Advisor / Principal

Mr. Lalor serves as the Head of Financial Planning where he employs his extensive experience to oversee the firm’s financial planning services. His expertise includes tax, retirement, and cash flow planning, as well as executive compensation. He also manages some of the firm’s family relationships, endowments, and foundations. Mr. Lalor sits on the Financial Planning Committee which is responsible for identifying financial planning opportunities and disseminating guidance to advisors at the firm.

Mr. Lalor began his financial services career at The MDE Group, a New Jersey based wealth management firm. There he was involved with many of the firm’s largest corporate executive financial counseling relationships. Prior to entering the financial services industry, he worked for the telecom company, JDS Uniphase, where he was a Development Engineer managing teams responsible for the design and production of new products.

Mr. Lalor earned an MBA with a finance concentration from Rutgers Business School. He graduated with a BS from Rutgers School of Engineering where he majored in Ceramic and Materials Engineering.

Mr. Lalor became a CERTIFIED FINANCIAL PLANNER™ practitioner in January 2007 after completing Fairleigh Dickinson University’s Program for Financial Planners in 2006. He completed his Chartered Financial Analyst (CFA) designation in 2014.

About Jack Mahoney, CFP®

Managing Director / Client Advisor / Principal

Mr. Mahoney joined  Simon Quick in 2018. As a Director on the client advisory team, his focus is on providing investment and financial planning advice to high net worth individuals & families. Mr. Mahoney also serves as Co-Head of the Hiring Committee where he oversees the recruitment of new team members at the firm. 

Mr. Mahoney began his career at Bloomberg LP. While at Bloomberg, he partnered with some of the firm’s largest clients to solve business challenges through the suite of Bloomberg functionality and services. Most recently, Mr. Mahoney worked at UBS Private Wealth Management in NYC, where he was responsible for providing access to wealth management solutions available to the firm’s ultra-high net worth clients. He helped advise clients on all of their wealth management needs from investments, to lending, to generational wealth planning.

Mr. Mahoney graduated from Connecticut College in New London, CT. While at Connecticut College, Jack was a member of the lacrosse team. He became a CERTIFIED FINANCIAL PLANNER™ practitioner in 2015. He and his wife are residents of Montclair, NJ, where Jack remains involved with the youth lacrosse program.

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