Year-end Moves Can Benefit Investors

November through December is typically busy, so you may need to focus on something other than your current investments. But, before you carve the turkey and bring out the noisemakers, take some time to review year-end strategies that may improve your finances.

Contribute to Your Retirement Fund

Contributing to your retirement account can build savings and lower your tax bill. For 2023, you can contribute up to $22,500 to a 401(k), 403(b), or 457 retirement plans. If you’re 50 or older, you can make a catch-up contribution of $7,500. If you haven’t contributed the maximum, consider adding to your retirement account before December 31.

Open an Individual Retirement Account

You may be able to contribute up to $6,500 to a traditional IRA. Account holders aged 50 or older can also make a $1,000 catch-up contribution. If eligible, you have until the April 15, 2024, tax filing deadline to make the contribution and claim the deduction on your 2023 tax return.

Fund an HSA

Members of high deductible health insurance plans (HDHP) can set money aside in a health savings account (HSA). In 2023, the limits are $3,850 for individuals and $7,750 for families covered under the plan. Members aged 55 and older can contribute an additional $1,000. You can withdraw contributions tax-free to pay out-of-pocket healthcare expenses.

Sell Those Losers

Selling stocks in a brokerage account that have declined in value allows you to deduct the loss to offset capital gains on stocks you sold during the year. You can use losses to offset up to $3,000 of ordinary income. You can carry over excess losses to future tax years.

Donate to Charity

With the higher standard deduction, fewer people are itemizing their taxes. If you itemize, donating to a charity whose mission is important to you could reduce your tax bill. The charity must be a qualified tax-exempt organization for contributions to be deductible.

Schedule a Meeting

Meet with your financial professional to review your strategy and assess your progress. Then consider additional end-of-year moves that make sense for you.