As another year comes to an end and we begin the process all over again in 2018, many individuals will tend to look back financial review taxes investmenton this past year in an attempt to analyze what they have accomplished and what they can do better in the coming year. At New England Investment and Retirement Group we look to add and create value, particularly in your financial life, and would like to touch upon a number of items and strategies for your end-of-year preparations. While these thoughts do not run the gamut of a full analysis of your financial strength, we do believe they are worth taking a look at.

 

Tax Bill

With the passage of the tax bill it is pertinent to meet with your accountant and financial advisor to discuss your tax implications for the coming year. A few things of note: 1) There will continue to be seven individual tax brackets but the taxable income parameters are now mildly different, 2) Capital gains have now changed depending on your tax bracket, 3) The mortgage interest deduction is now available on the first $750k of a home, and 4) State/Local property taxes limits the deduction to $10k. We recommend you meet with your tax advisor to go over these changes which will affect everyone in order to properly ascertain your tax liability and financial planning needs for 2018.

 

Tax-Loss Harvesting

As 2017 concludes and we continue to make new highs in the S&P 500 with a bull market in its ninth year, investors could face large capital gains resulting in a larger than expected tax bill come April. Tax-loss harvesting, the process of selling an investment to obtain a capital loss, is one way to soften your taxes. However, in order to claim a loss on your 2017 taxes, you will need to sell your losing investments by December 31st. Investors should also be aware of the “wash-sale rule”, an IRS rule where you are not allowed to purchase an identical investment 30 days before or after the sale of that investment.

 

Portfolio Rebalancing

Now is the time to sit down with your financial advisor and re-examine your current investment strategy. As stated above, we are at record highs in the S&P 500 and many portfolios do not look the same today as they did 1, 3, or 5 years ago. Asset allocation is key when it comes to planning your long-term financial goals and a quick financial “check-up” of your year end statements could go a long way into maintaining those goals.

 

Achieving Long-Term Financial Objectives

The start of a new year tends to make individuals set goals for themselves both on a personal and professional basis. Financial goals tend to evolve over time taking into account factors such as career advancements and adjustments, the current state of the economy, family size, and health. These changes can become part of your daily routine in such a way that you may not realize your goals have shifted significantly since first initiating an investment plan. Each year, it can be quite valuable to re-assess your personal and financial situation to analyze these changes and see if it may be time for a change in your overall investment strategy as well.