5 Tips for Helping Clients Reach Their Year-End Financial Goals

For example, in 2021, the average U.S. large-cap fund had an estimated capital gain of 9%.

It may be worth looking at clients' asset classes in non-qualified accounts to determine if those assets are tax-efficient.

If your client wants to maintain their current portfolio make-up, they could proactively offset capital gains through tax-loss selling.

If they cannot find any tax losses or they seek to minimize long-term exposure to capital gains, they could look at asset classes that have a history of producing capital gains and putting those asset classes into an annuity that can grow tax-deferred.

3. Harvest tax-gains.

Many times we view end-of-the-year tax planning as a way to minimize taxable events.

However, it could also be a time to discuss the possibility of tax-gain harvesting.

If a client has a lower income on paper and seeks adjustments for long-term estate and taxation planning, it is a good idea to consider finding potential tax gains.

Selling out of a fund that has been producing quite a bit of capital gains could save taxes in the long term.

In addition, consideration of a Roth conversion to potentially minimize future RMDs and produce tax-free income is a sound strategy.

Tax-gain harvesting can help provide longer-term tax efficiency within your client's financial plan.

4. Contribute to a retirement plan or IRA.

The end of the year is a good time to evaluate if you might need to make more contributions to a retirement plan.

Retirement plans typically require contributions to be made within 30 days of the end of the year.

Clients should also look at their IRA for the same purpose.

5. Understand key SECURE 2.0 Act 2024 rule changes.

Lastly, don't forget about some provisions within the SECURE Act 2.0 that will become law starting on Jan. 1, 2024.

Provisions to know as the calendar turns include:

• Unused 529 assets can be rolled over into a Roth IRA for the beneficiary of the 529.
• Relaxation of 72(t) rules that allow for partial rollovers from an account from which 72(t) distributions are being made will not create modifications as long as the 72(t) payments are being made.
• Employers can match payments plan participants make to their student loans.

Also, keep an eye on the potential "sunsetting" of the Tax Cuts and Jobs Act at the end of 2025.

This may increase or decrease your client's tax bill — depending on how Congress decides to act.

Year-end is an opportunity to reflect on the past year's financial milestones and discuss end-of-the-year strategies.

Clients never want to be in a position at the end of tax season to think to themselves, "I wish I would have known that."

Tyler De Haan is director of advanced sales at Sammons Institutional Group.

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Credit: Harris and Ewing Collection/Library of Congress.