Can you believe it is December already? Of course, this means there are only a few weeks left in the year. Obviously, it is one of the busiest times of the year, and people everywhere will be scrambling trying to get things done. You probably do not need anything else added to your plate right now. However, unfortunately, the clock is also ticking on a few retirement planning moves that you must make and/or may need to make before time expires at the end of the year, so it is crunch time. If you miss these deadlines, the consequences can be very costly because there is no way to back up the clock and correct the miscue. So, as a courtesy, let us inform you about a few areas of retirement planning that have year-end deadlines. Required Minimum Distributions (RMDs) – If you turned 72 this year or are past this age, then you have a required minimum distribution to meet on your pre-taxed retirement savings plans. Roth Conversions – This popular tax-savings move is different from Roth contributions given the fact they have to be done by the end of the year to count for 2021. Retirement Plan Contributions – In most company-sponsored retirement savings plans, you only have until the end of the year to contribute and max out your contributions for 2021. Gifts and Charitable Contributions – These must be done by the end of the year in order to get a deduction or tax credit for the year 2021.
Remember, time is running out for these and several other planning moves that you must do and that may need to be done before the end of the year. If you miss the end-of-the-year deadlines, your retirement plan could be severely hurt in the form of penalties, taxes, or lost opportunity costs.
This information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation. Any advise contained in this communication, is not intended or written to be used, and may not be used, for the purpose of (1) avoiding tax-related penalties under the Internal Revenue code, (2) promoting, marketing or recommending to another party any tax-related matters addressed herein. All illustrations provided are for illustrative purposes and are not intended to guarantee any future results.