A Year-End Checklist to Keep You in Good Financial Shape

December often zooms by when you’re busy buying gifts, baking cookies, attending parties – and shovelling snow. It may be tempting to spend your time just enjoying the holiday season, but the last month of the year is also a good time to think about year-end financial planning.

Luckily, you have plenty of time between now and the end of the month to take any action that is required.

Here are some things to consider to start the new year in good financial shape.

1.  Review your investments

The end of the year is a good time for a financial checkup. A financial planner can help you look ahead and prioritize your goals for the coming year.  Prepare for the meeting by creating a list of topics to help you get the most out of your discussion.

A year-end portfolio review can identify any areas that need attention and ensures your savings and withdrawal strategy are still in line with your future needs.

This is a good time to rebalance your portfolio and adjust your asset allocation as required. If you are using the bucket approach to manage your income stream during retirement, it’s time to think about how you’ll top up your liquid pool of assets.

It’s also a good idea to look at any capital gains or losses you might incur in 2019 to determine the best strategy to minimize taxes

Did you make the maximum allowable contribution to your RRSP and TFSA (or as much as you had planned)?

If you turned (or are turning 71) this year give yourself plenty of time to switch your RRSP over to a RRIF or annuity before December 31.

2.  Contribute to a RESP

The RESP contribution deadline is December 31.

If you have not maximized RESP contributions in past years, you can catch up one year at a time.  You could contribute up to $5,000 and be eligible to receive up to $1,000 of the Canada Education Savings Grant (CESG).

A RESP contribution would make a perfect Christmas gift for your grandchildren this holiday season.

3.  Make TFSA withdrawals

If you were planning on making a TFSA withdrawal, consider doing it before the end of the year. If you make the withdrawal in December, you could recontribute that amount as early as January 1, 2020. But if you wait until January to make the withdrawal, you won’t get the contribution room back until January 1, 2021.

4.  Medical and dental expenses

Review your employee benefits. If you have “flex” spending for medical and dental expenses, make an appointment to take care of your medical needs before they expire. Some plans can carry over from year to year, but others do not.

Make sure you’re getting the full use of any benefits you are eligible for. You might want to renew your prescriptions and get new eyeglasses. Some deductibles reset at the beginning of the New Year.

This also applies to any personal extended medical plan you may be on.

5.  Consider postponing ETF and mutual fund purchases

If you have a taxable investment account, consider putting off buying investments such as ETFs or mutual funds that make year-end taxable distributions. Why own an investment for one month and be dinged with a full years’ worth of taxable income?

And, since year-end distributions tend to lower the price, you could also consider making your RRSP and TFSA contributions early in January.

6.  Review your budget

Take a look at your spending patterns for the year to make sure they’re still in line.

  • Did you stick to your budget?
  • Were there unanticipated expenses?
  • Are there areas where you can cut costs or increase your spending?
  • Where do you need to make refinements?

Review your plans and goals and establish a new budget for next year.

7.  Apply for government benefits

If you’re thinking of collecting your Canada Pension Payment and/or Old Age Security benefits apply online with your Service Canada Account and you’ll see an estimate of what you’ll receive.

Make sure the application is complete and you’ll receive notification in the mail in seven to 14 days.  That’s much preferable than sending an application in the mail where it would normally take 120 days to process.

8.  Other things to do

  • Some people like to calculate their net worth at year-end and track their progress with a spreadsheet.  Your net worth drives the actions you will take to achieve your financial goals.  It helps you assess your spending and you can take quick action if you’re going off the rails.
  • Evaluate your insurance policies – auto, home, health, life – to make sure you’re getting the coverage and service your need.
  • Review you will.  Is your beneficiary information updated and correct?

The bottom line

The approaching year-end offers a great time to reflect on 2019 and look forward to 2020.

It’s a good time to get organized and give some consideration to your finances. There are always changes that might be worth making to better your overall situation.

If your year-end review shows you’ve got things under control, congratulations. If you need to make changes, start putting together your plan for next year.

You’ll feel in great financial control, which should help you enjoy the holidays even more – a good end to the year.



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