Start the New Year with a Healthy Financial Plan

As 2018 comes to a close, Duane Horne, financial planner and Cypress resident, shares some ideas you should consider to improve your financial future. Review what happened this year so that you can start the new year’s finances with peace of mind.

Income Tax

Did you have a major life change (employment change, marriage/divorce, a new child) that affects your income tax? Review your tax withholdings have been properly adjusted. Having low withholdings can lead to tax penalties while having too high of withholdings prevents you from accessing your money until your tax return is filed. Also, determine your adjusted gross income (AGI) with the help of your tax advisor. Your AGI will help determine your tax bracket, which you’ll need for investment and retirement planning.


Consider tax-loss harvesting to lower taxes on capital gains. By selling positions that are down this year, you can use the losses to reduce up to $3,000 of taxable income. If your total losses surpass $3,000, you can roll over excess losses to offset gains in another year. If you have losses from a previous year, calculate how they affect your gains or losses from this year. Also, check to see when you last rebalanced your portfolio. Although you don’t need to update your investments every year, many people go far too long without making necessary adjustments as they age.

Retirement Accounts

Max contributions to an IRA and employer retirement plan for the year. Both IRAs and 401(k)s have annual contribution limits. If you find you have excess savings and have not reached your annual limit, it may be a good idea to make additional contributions. Similarly, you may also consider making greater monthly contributions to your accounts next year, spreading out the cost of contribution. The deadline for IRA contributions is usually April 15 of the following year, though this may vary. 401(k) deadlines may be restricted to the calendar year, depending on your employer.

Duane Horne, CLU, ChFC, CFP, LUTCF