Fall planning for your finances

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As fall arrives, the changing of the season can be an ideal time to revisit your financial plans with a fresh perspective. Ask yourself: What goals do you still need to tackle this year? And which ones do you want to pursue in 2025? Here are seven financial moves you can make in the final months of 2024 to help set yourself up for success in 2025 and beyond.

The end of the year is a good time to revisit your investment strategy and asset allocation to help ensure your portfolio is diversified across stocks, fixed income, cash, and other asset classes in a way that fits your goals and risk tolerance. If the recent volatility in financial markets has caused your investments to drift away from your target asset allocations, it may be time to consider rebalancing them.

Whether or not you live in a state with high taxes, consider how minimizing the impact of taxation on your portfolio can help you build and sustain your finances over time.

• For example, a tax-aware asset allocation strategy may help increase after-tax returns.
• For taxable accounts, a strategy known as tax-loss harvesting can help minimize taxes owed from capital gains.

And when you're ready to pay your taxes, remember that you have choices including paying in cash, liquidating investments, taking out a loan, or even using your credit card.

If you’re not doing so already, consider fully funding your employer-sponsored retirement plan, such as a 401(k), since your contributions can be made on a pretax basis. In 2024, you can save up to $23,000 through your 401(k) plan, with up to $7,500 in additional contributions for those age 50 or older. Separately, for the 2024 tax year, you can save up to $7,000 in an individual retirement account (IRA), plus an additional $1,000 if you are age 50 or older.¹

Year-end may also be a good time to examine how well your portfolio aligns with your personal values. For investors concerned about issues such as climate change, for example, investing in companies that lead in environmental, social, and governance (ESG) best practices can help them seek to generate positive financial returns while also driving positive change on the issues they care about.

Want help integrating sustainable investing into your portfolio? E*TRADE’s Sustainable Investing hub offers solutions, perspectives, and insights.

During the holidays, many feel the call to give back. When making your gifting plans, you need to also decide whether you want to give cash, securities, or volunteer your time.

Donations of qualified appreciated stock may maximize the amount you give to your favorite causes. To find out more, visit etrade.com/donations.

You could consider making contributions to, or creating a 529 plan to help someone you care about save for college. A 529 plan is a tax-advantaged way to invest for future education expenses.

Revisit your budget ahead of the holiday shopping season and make a plan that you can stick to for spending. This can help you avoid any temptation to dip into savings or incur high interest rate credit card debt and keep you on track financially through the end of the year.

Finally, now that you have assembled your budget, plan your savings goals for 2025. How much money would you like to invest in an IRA or save for a new home? Maybe you're interested in becoming financially independent or building an emergency fund. Regardless of what your aspirations are, having a specific amount and a plan in mind may help you meet your savings and financial goals for 2025.

The source of this article, “Fall Planning for Your Finances,” was originally published on August 30, 2023.

¹ IRS.gov, “Retirement Topics,” https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics

CRC# 3822082 09/2024