We’re all feeling that holiday buzz that has nothing to do with wine consumption (or maybe it does) and are counting the days until we can check out for the holiday season.
But before you do, I have three simple tasks for you to do so you can really relax and enjoy your time with friends and family…without feeling like you have something hanging over your head.
Tax loss harvesting – time to talk to your advisor!
If you have an investment account (outside of retirement accounts) that has positions that have lost money in 2021, you may be able to offset short-term capital gains in other positions. This is a strategy in which it’s a good idea to consult with your financial advisor. Make that appointment!
Use Flex Spending Account dollars and/or vacation time that won’t roll over.
Take a minute to check your employer benefits for dollars that won’t roll over. Remember that money you have deferred out of your paycheck into a Flex Spending Account (FSA) does not roll over into the new year and must be used by the end of 2021 – don’t leave that money on the table!
Also, check your company policy on vacation days or general Paid Time Off. Many have policies regarding how much can be carried into the new year. Again, your vacation time is part of your compensation, so you don’t want to leave that money back in 2021.
Check allocations in investment accounts and rebalance.
You set an asset allocation and then immediately the performance of your investments move out of whack. Different investments perform in unequal ways, e.g. your large cap fund has gained more than your emerging markets fund. Rebalancing moves those investments back to an allocation you desire. This is important in both retirement and nonretirement accounts. Another one that your advisor can help with!
These dates are arbitrary, and you can certainly create your own deadlines (the sooner you call your advisor, the better). Completing these simple tasks will help you breathe a little easier over the holiday season and get you started on the right foot for the new year.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
All investing involves risk including loss of principal. No strategy assures success or protects against loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market.
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.
