Client Portals

Planning Steps for the Fourth Quarter of 20193 min read

Sep 24, 2019 - Max Osbon ( 5 mins to read)

Max Osbon

The fourth quarter of the investment year starts next week. This is a convenient time to either validate your progress to date or get back up to speed before the close of 2019. Taxes, trust and estates, life insurance, debt, expenses and cash management are worth taking a look into. Here are some steps to guide you to make sure that your investment house is in order.

Check in on your tax-related items:

  • September 15 was the last official deadline to pay estimated taxes in 2019. Most people opt to pay their estimated taxes on time, even though they aren’t required to do so, simply because it makes planning easier, it’s slightly cheaper and less stressful. Estimated taxes that are not paid on time are assessed a penalty that effectively works like an interest rate. We routinely assist our clients with estimated tax payments.
  • Consolidate old 401ks, extra IRAs, 403bs, etc. Consolidating leaves you fewer accounts to maintain and simplifies investing.
  • Make RMD distributions for 2019. The major rule with IRAs is that once you turn 70 ½, you must withdraw a certain percentage of assets of your IRA – that’s your required minimum distribution. We can help you calculate the amount and make sure the distribution is completed during the proper window, for you and/or your parents’ accounts. Consider making that RMD a direct part of the annual charitable giving plan.
  • Long-term gains – When will your most recent investments pass the one-year mark and turn into long-term capital gains? Will you sell them in the next three months, before the 2019 tax window closes, or wait until next year? We can help you decide.

Cross the T’s and dot the I’s on your trust and estate documents:

  • Update your will. Has your family or marital situation changed? Do you have new assets that you’ll pass on to heirs? Make sure your will is updated to reflect your current situation and wishes. Wills are there to assist your loved ones during the chaos of an accident or emergency. It’s not a fun topic, but it’s a really important part of the trust and estate equation.
  • Update your beneficiaries on your IRAs, 401ks, trust accounts, etc. Even if the beneficiaries are listed in a will, this step will save your loved ones from a major administrative and legal headache.

Update life insurance:

Make sure that your auto-pay hasn’t lapsed and that your beneficiaries are in place.

Assess the debt on your balance sheet:

Consider refinancing. The cost of debt is down at least half a percent in the last three months. Debt is cheap and it can get even cheaper. A 50 basis point drop should prompt a move if you haven’t refinanced recently.

Get a handle on your expenses:

Check your expense tracking to make sure it is complete and accurate. With accurate tracking you can fine-tune cash flow and invest excess money. Without it you are guessing and hoping. My favorite choice for expense tracking is the online version of QuickBooks. Investment decisions are closely tied to your capacity to save and your requirements for drawing down capital.

Check the best rates for cash investments:

The Fed has lowered interest rates twice recently and there is a mad scramble among the institutions to adjust cash yields. Your bank will be the first to cut your savings rate. Consider what the T-Bill market is offering if you aren’t using it already.

Look forward to 2020

It’s easy to let these tasks slide over time. But spending 15 minutes on each can help you get things in order before the end of the year and get a jump on tax prep and 2020. The long-term financial impact can be significant. We’re here to help.

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