The holiday season has begun and we’ve got some helpful tips to stuff your stockings to the brim…with financial advice of course. Whether it be with crypto, required minimum distributions (RMDs), estate planning, or funding your retirement and the like, we’ve got you covered. It’s never a bad idea to add in a few candy canes as well.
Crypto
Whether as the seed to start someone’s investment journey, or simply an alternative to a gift card, many are considering cryptocurrency as an alternative to a physical gift. With the ever-growing possibility of crypto becoming the future of investing, it may just be the gift that keeps on giving. As Joe McQuiad would say, it’s the next iteration of money, so why not give the gift of the future to your loved ones this holiday season?
Interested in learning about cryptocurrency? Check out our video here: https://www.youtube.com/watch?v=eTHGCoy14cQ
RMD
Once you turn 72, it’s mandatory to withdraw the Required Minimum Distribution (RMD) from your IRA. If not, you can face a penalty of 50% of the amount you didn’t take out. If you’re in a position where you don’t need the whole RMD to get by, consider giving the remainder to charity. That way, you’re not incurring a penalty, or paying taxes on the distribution.
Fund retirement ASAP for compound interest
Waiting until a year to fund your retirement account can put you on the naughty list. But if you decide to fund it earlier, you have a longer time period to compound that interest, earning you a nice secure spot on the nice list! While it’s possible to fund a retirement account for any year all the way until tax day the following year, it isn’t wise.
Estate planning
Making the decisions yourself is much more personal than someone else. Consider giving the gift of estate planning. Having your wishes spelled out in a will, specifying what you would like to give to who, is much better than having the state decide. Not only are you planning out your will, but things like power of attorney, health care proxy, emergency fund, tilting of assets & life insurance.
Tax Loss Harvesting
Selling your securities at a loss to offset capital gains tax liability is a great strategy. Short term capital gains tend to come at a higher federal income tax price so by taking the loss of selling some stocks will better prepare your wallet for all of those holiday gifts! Keep in mind that while this strategy is generally done at the end of the year, it can be done at any time.
