“I
t’s always a good thing at the end of the year to look at all of your financial information,” says Steffanie Burgevin, senior vice president and investment officer of Wells Fargo Advisors in Leesburg. “Sit down and just take stock of everything you have and make sure you are doing the right thing, that your budget is on track, that the interest rate on your mortgage is as low as it can be.” She advises her clients to do a complete and thorough review before the end of the year to take advantage of any current tax breaks. “The first thing anybody ought to look at is contributions,” Burgevin says. “Can they max out on their retirement plans? If they are over 70 1/2, do they have to take a required distribution? People may have the opportunity to give money straight to charities from their retirement accounts.” Toward the end of the year people often have more taxes taken out than they need to, Burgevin says. “Ask yourself, will my current withholding rate lead to a large refund?” The new year will bring an immediate change in the form of payroll taxes. “The Social Security withholding tax of 4.2 percent will revert to 6.2 percent in January. Plan on a smaller take-home paycheck.” Those with flexible spending accounts may find they have extra dollars to use. “Typically you have until the end of the year and you can’t carry over,” Burgevin says. “Make sure you have utilized all of your dollars.” The main thing is to sit down and review your whole financial picture, “so if there is something to do you still have time to do it. Don’t wait until the spring when you do your taxes or it might be too late.” Bonnie Sewell, principal at American Capital Planning in Reston, recommends people take time at the end of the year to think about finances “because any planning puts you in a better CLOCKWISE FROM TOP: BONNIE SEWELL OF AMERICAN CAPITAL PLANNING; ANNE position later.” McCABE TRIANA OF CAM PRIVATE WEALTH SERVICES; AND STEFFANIE BURGEVIN OF Money is a fairly stressful topic for people, she says. “A lot of WELLS FARGO ADVISORS IN LEESBURG. power is attached to money.” benefits like a 529 plan.” Sewell believes investment advisors can help take emotion The end of the year is also a good time to teach children the out of the financial planning process. This is especially important importance of saving, especially if they receive money as a gift. during times of major change such as divorce, death of a spouse or “Parents can teach them so they learn early on the importance of retirement. balancing cash flow. It can’t come too early. As soon as they can Sitting down with clients and looking at their finances is “an make decisions about spending it they need to learn.” amazingly calming process,” she says. “It alleviates worry by helping Parents should take children to the bank to make deposits, them get their money in order.” “and when the statement comes, look at it together,” Triana says. “Emphasize the importance of not only saving for today but having Kids and Financial Planning a goal, (for example) saving for a car.” The end of year is a good time to think about starting some Families who talk about money do better with finance, type of college savings plan, says Anne McCabe Triana, managing Sewell says. “Don’t make it a taboo subject. You don’t need to tell partner of CAM Private Wealth Services in Reston. (children) what you make for them to understand opportunities “This is an important thing for parents of young children to and limitations, particularly around colleges. Kids are (sometimes) consider since college tuition has such a high rate of inflation. Run told no matter what the cost, college is worth it. It’s important to set some numbers to see what (tuition) would cost when the child is 18 expectations early.” and figure out how much should you be saving per month.” Parents may want to consider setting up Roth IRAs for children Triana recommends that parents put something in place such as they enter the work force as a way to learn consistent savings as a 529 college savings plan or a minor account, which is a basic habits. savings account for children. “Minor accounts are a nice way to save if parents have money for their children that is not necessarily Year-End Giving earmarked for college. The downside is they don’t have the great tax Requests for charitable giving at the end of the year “often go 52
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