When year-end approaches, most of us are busy planning vacations, shopping for holiday gifts, and scheduling social functions. But it is a good time to stop and take stock in your financial progress. How are you doing? Are you reaching your goals? Are you struggling with lost investments? Now is the time to make some adjustments. It's not too late to make financial changes that may save you money on your 2009 tax return and/or position you for a better start in 2010. Make smart year-end financial moves and do some advance planning for 2010. Here are eight financial planning strategies that you should consider prior to year-end.

1)  Identify a trusted advisor who can see your entire financial picture.
In the past year, it has become more evident than ever that each piece of your financial puzzle needs to fit together. If your current advisor is unable to see your entire financial picture, he/she might not be able to best help you in managing and/or implementing strategies that will help you achieve your goals. All of your financial plans, products and methods are connected and should work together in harmony to maximize your return. An advisor who is able to help you coordinate and integrate all of these important financial strategies should enable you to have a more secure future.  

2)  Review your financial goals and objectives.
Evaluate your progress for the year. How close were you to your budget? Recalculate your net worth. Compare it to the value at the beginning of the year. How did you do? Based on where you are now, will you be able to get to where you want to be? Now is the time to review your financial goals and objectives. It may be necessary to tweak your plan or your behaviors in order to get back on track, or adjust certain other factors to help you maintain and grow your assets to help you reach your goals and objectives.

3)  Align your products and portfolio with your goals and objectives.
In today's economic uncertainty and erratic market conditions, it's important to take steps to help ensure that your overall planning strategy adequately meets your changing needs and objectives and reflects proper planning.  Make sure that your investments are based on solid, long-term informed decisions, and not short-term fears and uncertainty.  If you are concerned about any aspect of your portfolio holdings or its tax implications, now is the time to ask your trusted advisors for help.

4)  Review your insurance coverage.
Remember that insurance offers protection for your family. Gather your insurance records together and review the adequacy of your policies. Evaluate all existing coverage, including life insurance, disability income insurance, homeowners insurance, auto insurance, liability insurance, renters insurance, and long-term-care insurance to determine if there is a need for adjustments, replacements, cancellations or additions.

5)  Harvest losses to offset capital gains.
Loss harvesting may be the single most beneficial method in reducing taxes now and in the future. If handled appropriately, it can reduce your taxes and help you diversify your portfolio in ways you may not have considered. No one likes a losing investment. But when it comes to your income taxes, capital losses can be blessings in disguise since you can use them to offset taxable capital gains, plus up to $3,000 in ordinary income ($1,500 for married couples filing separately). Look in your taxable accounts for investments with relatively large losses where you don't expect a comeback. Any losses you can't use to offset gains this year can be carried over into future tax years. Remember to avoid wash sales.

6)  Review and update your estate plan.
Have you reviewed your estate plan in light of changing estate tax laws or changes in your personal financial position? If you have an existing estate plan, make the time to sit down with your trusted advisor to review your plan and make any necessary revisions. Ordinary changes in life can make a previously well-prepared estate plan inappropriate for the future. Some examples of triggering events may include the birth or death of a family member, marriage or divorce, a move from one state to another, shift in career, a change in the composition or amount of your assets, business arrangements or tax law changes. It may be necessary to update your beneficiaries as well as make other adjustments if any of these events have occurred since your last update. The most effective way to keep your estate plan current is to review it on a regular basis. Also, discuss income protection strategies as part of your overall estate plan. Consider a financial protection plan that includes Life and Disability Income Insurance. You should determine how much capital or income is necessary to help protect your children or other beneficiaries. For example, money may be needed to help maintain a home for children, pay for college or cover other expenses in the event of the breadwinner's death or disability. Whatever financial protection plan is the most appropriate for your circumstances should be coordinated with a will or trust and should take estate taxes, income taxes and other financial issues into consideration.

7)  Plan for retirement.
If you are eligible for a tax-advantaged retirement account, plan to fund it before year-end if you can afford to do so. Depending on the type of plan, you have until the end of the year or the tax filing deadline to implement a new plan if you don't already have one. This is also a good time of year to consider a Roth conversion. If eligible, this may be a great opportunity for someone under the right circumstances. (Please see "To Convert or Not to Convert?")

8)  Schedule an appointment with your trusted advisor.
Several opportunities may arise through a quick review of your portfolio, estate plan and other planning strategies that may also reduce your tax bill in April if you act now. Make sure to review investments, insurance policies, retirement plans, other financial planning products as well as your legacy plan. Coordinate each of these strategies so that they work in tandem and not against each other. Take a few minutes to plan with your trusted advisor before December 31.

Because our firm specializes in advising individuals and businesses on ways to minimize their taxes and maximize their financial well-being, we'll continue to share opportunities that we think you should know about. Feel free to let us know how we can help you take advantage of these and other financial planning strategies. Call us today. We can help.

Timothy R. Devlin, CPA is a member of the firm's Executive Committee and the Partner in charge of the Tax Services Department. With over 25 years of experience, he specializes in corporate tax planning, stock-based planning, multiple entity structures, related cross-entity planning and succession planning. The primary goal of his practice is to assist clients in reducing their total tax liability, make tax-efficient investment decisions and develop financial structures that provide maximum tax advantages.