Your Year-End Financial Checklist

The end of the year is a good time for family, to reflect on the year that was and to plan for what’s ahead. It’s also a good time to pause and take stock of your financial situation. From maximizing your tax efficiency to planning for big life events, our year-end financial checklist can help you get your finances ready for the ball drop (yes, they’re still planning to drop it) that will mark the very welcome start of 2021.


Managing life’s uncertainties is critical to your financial health, because your plan will stay on track even if life throws a curveball.

Review Your Emergency Fund: This is a good time to replenish your emergency fund or get one started if you haven’t already. Aim to stash 3 to 6 months’ worth of expenses in an account that you can access in a pinch. Having these funds in reserve can help you cover surprise expenses, such as a blown furnace or medical expense, without utilizing credit or dipping into long-term savings.

Review Your Insurance Policies: Did you have a child? Did you get married? Land a promotion? If you had a big life event in 2020 you may have more to protect. That could mean upping your life or disability insurance coverage or updating beneficiaries on existing policies. Along the same line: If your home appreciated in value (say, you renovated), you may need more protection. 

Dig into Health Care: November and into December is typically open enrollment time for health coverage. Make sure you set aside time to review your health plan. If you have a Health Savings Account (HSA) you could top off annual contributions ($3,550 for an individual and $7,100 for families) to maximize the triple tax advantages — money goes in tax free, grows tax free and comes out tax free for qualified healthcare expenses. If you have a Flexible Spending Account (FSA), consider spending the funds that won’t carry over to next year as you may lose them.


Investing for growth is a key component of building a retirement nest egg. While you may not be tapping your investments for a long time, there are a few things to check each year.

Rebalance Your Portfolio: Depending on what happened in markets through the year, your portfolio’s asset allocation (the mix of stocks, bonds and other investments) may no longer reflect a level of risk that’s appropriate for your goals. You may need to rebalance your portfolio to bring your investment holdings back in line with your risk tolerance and goals.

Recognize Capital Gains or Losses: Selling investments at a loss can reduce your taxable income for the year — it’s known as 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 capital gains or losses.

Final Retirement Contributions: If your budget allows, it’s a good idea to take advantage of the maximum allowable contribution to an IRA, 401(k) or Roth counterparts if those are available to you. The tax advantages these accounts offer can help you make your money go farther over time.


A little planning can help your budget go a long way. The end of the year is a great time to reflect on your budget and craft a plan for next year.

Revise or Establish Your Budget: A financial professional can help you review 2020 spending and create a budget for 2021 and beyond. Your budget is a great way to see how you’re spending (and plan your spending) so that you can prioritize the things that are most important to you.

Consider Refinancing Your Mortgage: With interest rates still historically low, you could lower your monthly mortgage bill and free up some room in the budget. You could also keep your payments the same but pay off your house faster and pay less interest over time.

Prep for Big Events: We can’t predict the future, but we can plan for weddings, surgeries, vacations, buying a car or home. If you’re planning a big-ticket expense in the coming year, carve that into your budget and start setting aside money.

Check Your Credit: Many consumer finance companies provide free, real-time credit scores. If you have access, check your score and make sure it’s where you want it to be (typically 740 and higher is considered very good). Also, request a copy of your credit report. The Fair Credit Reporting Act requires credit reporting companies to provide a free copy once every 12 months. While we’re on credit: If you’ve accumulated credit card reward points use them before they expire!


This isn’t necessarily an exhaustive list, given everyone’s financial picture is different. However, it’s a good start. Simply getting this process started at the end of the year may reveal opportunities or areas for improvement you hadn’t considered for the year. As we enter the holiday season, consider making this financial check-up another annual tradition. 

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