10 Items for Your Year-End To-Do List

  by Jesse Anderson

Can you believe it? 2009 is almost over! The older I get, the faster they go!

I thought I would put together a quick note to remind you of some helpful, year-end tasks you may want to consider:

1. Rebalance investment accounts – this is something few people do but I highly recommend. This involves bringing your investment accounts back in line with your model asset allocation.

Of course, that assumes you have a model asset allocation to begin with!If you need help with the mechanics of rebalancing, you can find a complete guide in Module #6 of our free, 401(k) course. The logic is the same in all accounts or across accounts.

If you don’t know what an appropriate asset allocation is for your situation, then I would recommend one of two KiM-B-A courses: Introduction to Investments and/or Step-by-Step Retirement Planning. Asset allocation is covered, among other things, in both.

Finally, if you need some individual guidance on the topic, we now offer fee-only financial planning services. We charge a reasonable hourly rate and would be happy to sit own and work through any questions you might have. Just call our office at 888-6-SNIDER (888-676-3447) or 214-220-0055 to schedule a meeting.

2. Drain Flexible Spending Accounts – Flexible Spending Accounts are use-it-or-lose it accounts. Any money unspent at the end of year is forfeited. If your employer offers FSAs and you have unspent funds, consider stocking up on prescriptions or making a quick appointment at the eye doctor to spend the remainder of your account. The expense must be incurred on or before December 31 to qualify for this year’s funds.

3. Register for two KiM-B-A courses and your spouse attends free – to celebrate the launch of the KiM-B-A program, we did two things: we made the introductory pricing purposefully low (hint! hint!) and we offered you the opportunity to have your spouse attend with you at no additional cost provided you registered for at least two KiM-B-A courses prior to December 31 and attend both prior to March 31.

There are six courses in the KiM-B-A program including Introduction to Investments, Step-by-Step Retirement Planning, Investing for Retirement, How to Take Advantage of the New IRA to Roth Conversion Law, The Role of Insurance in Your Retirement Plan; and Estate Planning Basics. Each course may be taken on its own or mixed and matched with others to meet your needs.

Register before December 31 and enter the source code REINDEER to take advantage of this special pricing.

4. Review your life/financial plan – I am a big advocate of life planning. I think your financial plan is the result of a bigger life plan. I talk at some length in my book, How to Be the Family CFO, about how I created my own life plan many years ago and how instrumental it was in getting me out of the mess I was in and building a life I loved.

I always like to take some time at the first of every year to review and update my plans. If you would like some ideas about how to get started creating a life plan, have a look at chapter 4 in my book. If you need some help creating a financial plan, let me suggest either the Step-by-Step Retirement Planning course in the KiM-B-A program or our fee-only financial planning services. If planning has never been your thing, we would be happy to help.

5. Tax loss harvesting – Tax loss harvesting is selling assets that have declined in value and using the losses to offset capital gains, either this year or in future years. This is only applicable to taxable accounts, not tax-deferred accounts such as IRAs, and may or may not be appropriate given the specifics of your situation.

If you have investable assets that may be candidates for tax loss harvesting, hopefully you have already discussed the situation with your tax or financial professional. If not, you need to get moving because those assets must be sold by December 31 to count the losses in the 2009 tax year.

We sent out detailed instructions for tax-loss harvesting in Snider Method accounts to our consulting clients. If you need any help, please be sure and give us a call.

6. Max out retirement plan contributions – if you haven’t contributed the maximum amount to tax-advantaged retirement accounts, you still have a little bit of time left. Contribution limits for 2009 are as follows:




IRAs (Roth and Traditional) $5,000 $6,000
401(K) and 403(b) $16,500 $22,000
SIMPLE IRA $11,500 $14,000
SEP IRA $49,000*

Remember, you can’t invest what you don’t save and the most advantageous way to save money for retirement is almost always in tax-advantaged retirement accounts.

7. Grand-father your Snider Advisors consulting services – I have sent multiple emails, beginning September 17, 2009, to existing clients, explaining the changes we were making to our consulting service levels. Snider Method alumni who are not currently consulting clients have until December 31, 2009 to lock in the original consulting service terms.

If you are a Snider Method Workshop alumni who is not currently a consulting client and are unsure about the pros and cons of grandfathering, give us a call at 888-676-3447 or 214-220-0055 and we would be happy to talk it over with you. If you just need to sign-up for consulting before the December 31 deadline, you can do that in the My Services section of MySnider.com.

8. Set up systematic RMDs for 2010 – If you are over the age of 70 1/2, you must take Required Minimum Distributions (RMD) from tax-deferred retirement accounts. Uncle Sam wants (needs) his money.

The required distribution for 2010 is based on December 31, 2009 account values. So once you know the account value, you can set up periodic withdrawals to meet the required annual distribution. For some people, this is more manageable than one big distribution at year end. Use this calculator to figure your required distribution for 2010. As always, let us know if we can help.

9. Change/update passwords – I had a wake-up call on this issue not very long ago – my Facebook account was hacked. (By the way, if you are on FaceBook, friend me.) No damage was done but it was a little embarrassing. I used the same password on many sites and it was way too easy to guess.

I quickly created a password algorithm and set out to change all of my passwords. Best practice is to do this at least a couple times a year. If nothing else, the new year is a good reminder to do it if you haven’t.

In case you are thinking you have too many passwords to make each one difficult and unique, I hear you. At last count, we have 452. But here are three tips that make passwords very manageable for Jim and I.

1. We use an incredible web site called PassPack to store/share all of our passwords and other important information. Besides being secure as Fort Knox, it has a lot of really handy features. Jim and I couldn’t manage without it.

2. I have a unique, easy to remember but hard to crack password for every site. The way I do it is with a password algorithm. For more on password algorithms, see this Lifehacker article.

3. And this is the hard one, you have to go through and periodically, systematically, change all your passwords. What better time than now? Create a new algorithm and change them all. Just rip the band-aid off fast. And just so you know, this is much easier once you have them stored in one place, like PassPack. You just tick them off the list one at a time.

If you need help, my assistant is available for a small nominal fee. (Just kidding!)

10. Consider converting some IRA money to Roth – Effective January 1, 2010, there will no longer be an income limit on converting traditional IRAs to Roth IRAs. This is a boon for higher income individuals who were previously shut out of the benefits of Roth IRAs.

Not only that, but the law is offering a one-time opportunity to spread the tax due on a 2010 Roth conversion over two tax years – 2011 an 2012. Finally, it is a pretty low-risk transaction because you have the ability to change your mind later in the year, by doing a recharacterization, if for example, asset values declined sharply later this year.

Tax law is not for the faint of heart and these conversions can have significant tax implications so it should not be done without a thorough understanding of the rules and the implications.

That being said, we believe most advisors have missed the crux of the issue (as usual). Many people are churning our calculators and break-even analyses to try to determine whether to convert and how much. We don’t think it has anything to do with a break-even or what you think future tax rates will do.

The fact is, you can’t know those things, so as usual, it is pointless to try to make a decision based on your crystal ball. We think the right approach is to think in terms of a tax diversification strategy. That way, no matter what happens in the future, you preserve flexibility and benefits.

If you have money in an IRA or a 401(k) type plan that you know you will be rolling out to an IRA this year, let me suggest two resources for you. We have created a special half-day course, IRA to Roth Conversion: New rules and strategies for 2010, to teach you everything you need to know about maximizing the opportunity presented by this tax law change.

If you don’t have a CPA as a trusted advisor, we can recommend one. And of course, we also offer fee-only financial planning if you prefer a one-to-one sit down approach. Just give us a call at 888-6-SNIDER (888-676-3447) or 214-220-0055 and tell us how we can help.

As you know, my doggedly persistent pursuit since 1997 has been logical, thoughtful, clear-headed, effective strategies for managing the risks of job loss, illness and disability, bear markets and funding thirty years of retirement, for myself and my family.

Since 1999, when I first began teaching the Snider Method to friends, our extended family has grown quite a bit. There are now some 9000+ of you! But the mission hasn’t changed. It remains to explore, develop and share sensible financial strategies with the people I care about.

In that vein, if I can help in any way, please don’t hesitate to ask. I can always be reached by email at kim@kimsnider.com and by phone at 214-446-8540. That is my direct number – it rings on my desk and forwards to my cell phone after hours. If I can’t answer right away, I promise I will get back to you.

Join Our Newsletter!
Enter your name & email to have our great content delivered directly to your inbox.  
Your information will never be shared