Boost Your Finances: Fourth Quarter Financial To-Do List

It feels good to wrap up things nicely before the end of the year, but there’s a lot to do. That’s where having a fourth quarter financial to-do list comes in.

It helps you prioritize the things you need to do to ensure you are in your best financial shape going into 2024 and beyond.

Check these 12 items off your fourth quarter financial to-do list.

#1 Review Where Your Financial Future Stands

According to reports, “Only 30% of U.S. households have a long-term financial plan.”¹

You don’t want to be part of this 30%.

The fourth quarter is a great time to review your retirement investments to see where you stand.

Take time to carefully review your 401(k) statements and other financial statements when they arrive. 

Are you on track with your retirement goals? 

Could you contribute an additional 1-5% of each paycheck in this final quarter to your retirement savings?

Knowing where you stand will help you check off other boxes on your fourth quarter financial to-do list. 

#2 Create a Get-Out-Of-Debt Strategy

According to the New York Fed data recently released, credit card balances saw the largest increase of all debt types – $45 billion – and now stands at a historic $1.03 trillion.²

In May 2023, the average credit card interest rate was 22.16%, according to The Federal Reserve.³

Here’s the thing: Your future planning comes to a halt when you have debt. 

It’s hard to think about the retirement of your dreams when you are struggling to get out of a mountain of debt. 

But that does not mean you should give up! Quite the opposite.

Now’s the time to get honest with yourself about your debt situation. Did you accrue more debt in 2023? 

At the top of your fourth quarter financial to-do list should be a plan to pay off as much debt as you can before the year ends.

Then, think ahead to next year and create a get-out-of-debt strategy. 

#3 Try to Max Out Contributions

While you technically have until Tax Day (Mon, April 15, 2024) to max out your IRA contributions, you should try to do so before the end of the year. 

The IRA contribution limit for 2023 is $6,500, and, if you are 50 and over, you can contribute $7,500.

If you have a 401(k), see if you can contribute up to the contribution limit. 

The 2023 contribution limit for 401(k) plans is $22,500. If you are 50 and over, your contribution limit is a bit higher at $30,000.

Look at where you are so far and see if it is possible to contribute a little bit more out of each paycheck now through the end of the year. 

If you can’t max out the contribution limit for your 401(k), at least find a way to contribute the company match. 

#4 Rebalance Your 401(k)

It’s not just what you save, but what you keep that may have a big impact on future account value and your ability to reach your retirement goals. 

This is why rebalancing is so important and may help boost 401(k) returns – even in a down market.

Not regularly rebalancing has the potential to do real harm over time to your retirement account performance. 

This is because unmanaged allocations may experience much larger losses in down markets and may miss the opportunity for growth during good markets. 

Rebalancing ensures you stay within your risk level and helps to protect against potential losses and stay on course with savings goals. 

#5 Set a Holiday Budget

The fourth quarter includes some of the year’s biggest spending with the holidays.

Take time to set a holiday budget now so you don’t end up with a big credit card balance come January. 

In addition to gifts, budget for holiday travel, entertainment, parties, and meals. 

#6 Use Up Your FSA

Do you have a Flexible Savings Account (FSA)? And does it have to be used up by the end of the year? 

If you have unspent money in your FSA, plan now to use your FSA pre-tax dollars for healthcare purposes.

Schedule doctor appointments and purchase medications so the money doesn’t go to waste. 

#7 Prepare for Open Enrollment

Open enrollment for 2024 health plans begins November 1, 2023, and runs through January 15, 2024.

Coverage takes effect on January 1, 2024.

Don’t wait until the last minute. Take time now to list your current prescriptions and the names of your doctors so you are ready when enrollment begins. 

#8 Update Your Policies

Start the new year fresh and schedule time in the fourth quarter to review and update your essential policies.

When did you last review your insurance policies (car, home, and life)? 

Has anything occurred this year that may help you find better insurance rates?

Is it time to update your home insurance to reflect renovations? 

Did you make lifestyle changes, such as losing weight, that may get you a better quote for life insurance?

This is also the time to look over any accounts with beneficiaries – 401(k)s, IRAs, life insurance policies, investment accounts, and checking and savings accounts – and make updates as needed. 

#9 Take Required Minimum Distributions

Before the Secure Act 2.0 was signed into law December 29, 2022, you had to start taking RMDs by April 1 of the year after you turned 72.

The Secure Act 2.0 extended the start of RMDs beyond age 72.

For those who reached age 72 after Dec. 31, 2022, and age 73 before Jan. 1, 2023, the RMD age is now 73.

However, the IRS has recently made new changes and are delaying the rules to allow companies time to update their systems.

Find out all about it here: IRS Delays Certain RMD Rules: What You Need to Know.

If you’re RMD age, make sure you add this to your fourth quarter financial to-do list; otherwise, you risk serious penalties on the amount not withdrawn.

You don’t want to forget to do this! 

#10 Review Tax Exemptions

Another step on the fourth quarter financial to-do list is reviewing and updating tax exemptions.

This can prove helpful come tax time. Take a look and see if you’re paying too much or too little in taxes.

If you are paying too little, do what you can to prevent owing the IRS for underpayment.

If you are paying too much, keep more each paycheck or take this “extra” and put it in your 401(k) or IRA.

#11 Plan Now for Tax Season

While taxes aren’t due until April 15, 2024, the fourth quarter is a good time to get your tax docs from this year organized. 

The IRS will begin processing tax returns and issuing refunds on January 18, 2024.

This means if you want to get your taxes filed early and get your refund quickly, you need to get everything together in the fourth quarter of 2023.

#12 Speak with a Financial Advisor

One of the most important things on the fourth quarter to-do list should be speaking with a financial advisor.

As you finish out 2023, a financial advisor can help you prepare for tax season and create a plan to better your financial outlook in 2024.

It’s not simply that they can help guide you – financial advisors may help you get closer to your retirement goals than you think. 

It doesn’t matter how far away or close to retirement you are or how much money you’ve saved. 

In fact, recent studies show how Professional Account Management may improve your annual 401(k) account performance by 3% or more.

Take a look below to see the potential of adding 3% more to your 401(k) over time. 

See how much you may have at retirement, and how 3% may improve your 401(k) performance. Check out our retirement calculator.

If you want independent, professional account management to help grow and protect your 401(k), schedule a complimentary 15-minute 401(k) strategy session with one of our advisors.

Book a 401(k) Strategy Session

Our goal is to increase your account performance over time, manage downside risk to minimize losses, and reduce fees that are hurting your retirement account performance. 

We aim to achieve this goal by first looking at how much equity exposure someone has based on current market and economic trends (risk management). And, second, for the equity allocation, our goal is to be in what is working and out of what is not in terms of investment style.

With 401(k) Maneuver, you can go about your life doing what you love with confidence, knowing we are handling the changes for you. 

With 401(k) Maneuver, there’s no need for FaceTime meetings. 

And you don’t even have to move your account – you can keep it right where it is.

Have questions or concerns about your 401(k) performance? Book a complimentary 15-minute 401(k) strategy session with one of our advisors.

Book a 401(k) Strategy Session

SOURCES

1. https://fortunly.com/statistics/personal-finance-statistics/
2. https://www.newyorkfed.org/newsevents/news/research/2023/20230808#
3. https://www.newyorkfed.org/newsevents/news/research/2023/20230808#

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