End of Year Strategies: Back to the Future, Part II


Rather than thinking about a financial overhaul at the end of 2016, instead focus on a couple of simple steps that can be easily accomplished and can set you up for a productive 2017.

The end of the calendar year isn’t necessarily the best time to overhaul your financial plan. It may be too ambitious to think about reconfiguring your entire financial picture while also closing out the 2016 calendar year, reviewing the current year’s financials, holiday shopping, tax preparation, and everything else the end of the year brings. So rather than thinking about an overhaul, instead focus on a couple of simple steps that can be easily accomplished and can set you up for a productive 2017.

In Part 1, we looked at facing your albatross and maxing out your retirement contributions. If you do only those two things, you’ll be ahead of the game for next year. But think about the following few strategies as well.

Update your beneficiaries on retirement accounts and insurance policies. I normally recommend this step as part of “Spring financial cleaning,” but the end of the year isn’t a bad time to address it. Why? Because the end of the year happens only once a year, so it’s a good time to do things you should do annually. If you’ve had a particularly busy year of changes, you’ll want to make sure the beneficiaries listed in your will and trusts are up to date. Now is also a good time to consider your overall health and any changes you might consider, such as looking into long-term-care insurance or a health savings plan.

Adjust your tax withholding. If your life situation has changed, either through marriage or divorce, or the birth of a child, or even if you’ve simply had a significant adjustment in your practice’s revenue, you should probably update how much you set aside for Federal and State taxes. Though you may not wish to think about 2016 taxes until April, employers are required by law to provide tax statements by January 31. The sooner you can get a sense of what you paid last year versus what you owed, the sooner you can make adjustments.

Don’t forget to pay yourself first. It’s easy to fall into the pattern of paying all of your current bills and day to day expenses, and then using the “leftover” amounts to save and invest for your future. Paying yourself first means setting aside retirement investments as if they have as much urgency and utility as any of your current bills. As much as you may want to reinvest earnings from the practice back into the practice, you should strongly consider doing so only after you have paid both your current and future selves. We’ll cover this concept more fully in a future column.

Take a fresh look at the technology you use in your practice. The pace of technological change has never been faster than it is right now. That means improvements, for sure, but it may also mean that the “new” electronic health record solution you purchased last year may already need an update. Talk to your technology vendors about how often you should evaluate, reassess, and potentially upgrade the tools you use to schedule and manage patient records and billing. It may be more often than you think.

Some of these strategies are more “nice to have” than “need to have,” so don’t add unnecessary stress if you’re not able to get to all of them. If you met some goals this year, you know you can do it. Set some more aggressive ones for 2017. If you didn’t meet as many goals this year as you wanted, a fresh start is less than 30 days away.

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