Top Questions to Ask your Trusted Advisor

Coming to a meeting with a financial advisor is probably not on your upcoming holiday to-do list. Financial discussions this time of year are more inclined to revolve around winter vacations, holiday gifts, and New Year’s Eve party budgets. However, now is the time to call your trusted advisor and prepare yourself for the upcoming year and the ones to follow. Whether this is the first time you have sat down to plan your financial future or a recurring annual discussion, there are some questions that should be answered and revisited year after year before the crystal ball drops.

What to ask?

The following questions have been broken down into three sections: Now, Soon, and Later; representative of the three different time frames they impact. “Now” questions target plans that you should have in place before year end. “Soon” covers the 12 to 60 months timeline. These are questions that should be used to guide your upcoming year’s income and deduction planning. “Later” are long-term planning oriented, designed to help plan for retirement, career exit strategies and other related events.

Now: Questions to ask that affect your yearend planning.

Could tax-loss harvesting help offset larger gains this year?

 Tax-Loss Harvesting is the process of selling investments that are at a low point and reinvesting in a similarly situated investment. The resulting loss from the sale acts as an offset against expected capital gains in the current period. This results in less money going to the IRS and more working towards your future.

How Can I strategically include charitable giving into my tax plan?

Depending on your other deductions, charitable donations may be able to get you over the standard deduction and give you more of a tax break. 529 plans, Donor advised Funds (DAFs), and donating appreciated non-cash assets are all tax saving vehicles that allow you to give a gift that gives back to your bank account.

Additional Now Questions:

Does it matter when I withdraw income from my retirement account?

What are my withholdings and estimated tax payments?

Have I maximized my retirement account contributions?

Should I make any changes to my 2024 employee benefits?

‍

Soon: Questions to ask that affect this upcoming year.

Will a life event or major purchase affect my taxes?

Whether it is getting married, adding another branch to your family tree, or buying a home, all have major tax implications. Knowing the benefits that are available to you are a key tax planning element you will want to be made aware of before April comes around.

Does a Roth conversion make sense?

This is a strategy for converting existing traditional IRAs into Roth IRAs that grow tax free. Roth IRAs do not have required minimum distributions and you can pull from these funds tax-free in retirement. However, a Roth IRA conversion comes with a cost, income taxes on the amount you convert must be paid in the year the conversion takes place. Asking if this is a sensible decision for you is a question you should ask your advisor.

Additional Soon Questions:

Should I accelerate my ordinary income?                                                      

Should I delay deductions?

What is the cost basis of my investments?

Am I taking advantage of every credit and deduction available?

Later: Questions to ask that affect your future plans.

When should I claim social security benefits?

While many individuals can wait to get their first social security check, the question is often when the best time to begin collecting benefits is. You can claim benefits at any point starting from age 62 up until you turn 70. The longer you delay your start date, the higher your benefits. Depending on your need for income, desire to continue working, and the state of your investment nest egg, all play a factor into making this decision.

How can I control my taxes in retirement?

Just because you are no longer working does not mean you do not have control over your taxes. Diversifying your income from regular and passive sources and making direct charitable contributions from your RMDs allows are tax avoidance strategies that work in your favor. Ask your advisor about what other options you have at your disposal as you enter your golden years.

Additional Later Questions:

How do potential changes impact my long term-term goals?

Should I increase my retirement plan contributions?

Should I shift my current tax planning strategy?

Should I accelerate capital gains?

Conclusion:

Planning is often put off till Later, Later tends to be coming up too Soon, and Soon is not that far away from right Now; that’s why there is no time like the present to begin the planning process. Regardless of if you need plans for Now, Soon, or Later, our experts have the knowledge to ensure that you and your loved ones are taken care of. HHM trusted advisors are here to provide you with all the resources that you need to go into the new year with confidence and with peace of mind.