The 2023 End-of-Year Financial Checklist for Staying on Track in Retirement

Hopefully, you’re enjoying retirement so much that you’ve barely noticed that the end of the year is creeping up again. And while we don’t want to stand in the way of all the adventures and enjoyment, it’s important to take a few moments as we approach the end of the year to check in on your finances. To keep things running smoothly, you’ll want to evaluate your spending since ringing in the new year last January and plan for the year ahead. As you review your expenses, there are a few items you’ll want to make sure you take care of before we hit 2024. Here’s a financial checklist for retirees to help keep your peace of mind in retirement.

End-of-year financial checklist for retirees 

Required minimum distributions (RMDs)

You are required to take RMDs from tax-qualified accounts like a traditional 401(k), 403(b) or IRA starting no later than April 1st of the year following the year in which you turn 73. It is important to take these distributions by year-end to avoid costly taxes and penalties. 

Keep wills and trusts up to date

Review your wills and/or revocable living trust to ensure that documents list the appropriate executors, trustees and guardians. Also, make sure your beneficiaries are up to date—especially if you’ve welcomed grandchildren to the family. Remember, an estate plan is a good idea for everyone, regardless of your net worth.  

Rebalance your portfolio

In retirement, it’s still important to own stocks, bonds and other assets in your portfolio. The volatility in the markets during the past few years may have caused your exposure to these assets to change in ways that may be at odds with the amount of risk you’re comfortable taking. Rebalancing your portfolio brings your asset allocation back in line with your comfort level. While rebalancing on a regular basis is always a good idea, it can be even more important following big market moves. 

Recognize capital gains or losses

Selling investments at a loss hurts but can also reduce your taxable income for the year. It's called tax-loss harvesting. Depending on your situation, you may also want to sell investments that have appreciated and realize gains. It’s a good idea to work with a financial planner or tax attorney to think strategically about when it makes the most sense to recognize capital gains or losses.  

Review charitable giving

Discuss charitable gift-giving strategies with your advisor or tax attorney for income tax deductions and to provide immediate and future benefits to charity over time. If you’re 70½ or older, consider charitable distributions from a qualified retirement account—up to $100,000 per year. That distribution is excluded from income, and distributions made when you are 73 or older can satisfy RMD requirements. 

Review annual and lifetime giving

You may want to consider giving income-producing assets to children in lower income brackets to reduce the family’s overall tax burden. If you have a large estate, you may want to take advantage of favorable current tax exemptions to make large gifts to dynasty trusts that can endure for multiple generations. The 2017 tax law effectively doubled the gift, estate and generation-skipping transfer (GST) tax exemptions, and it has been indexed for inflation each year. However, that may not be the case if tax policies are altered in the future. 

Update your spending plan

Review your 2023 spending, and then build your plan for 2024. Tracking your spending can help you understand where your money is going and whether it's time to cut some spending on things that may not be as important to you. And don’t forget to account for any big-ticket expenses you expect to have in the coming year—medical procedures, travel, etc. Keeping track of your spending in retirement is important and can help you make the most of the savings you’ve amassed as well as other guaranteed, fixed income streams. Balancing spending priorities with your savings will help you make your money go further while making sure you’re able to spend on the things that are important today.