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Year-End Planning Checklist

Focus on the planning opportunities you can control.


  • Don't forget to use your Flexible Spending Account (FSA) funds.

  • Required Minimum Distributions (RMD) must be taken by 12/31.

  • Feeling generous? Consider donating stock and using a Donor-Advised Fund.

  • Prepare for taxes on your equity compensation.

  • Build out tax-free balances with Roth and HSA opportunities in 2023.


The past couple of years have presented a lot of challenges. Between navigating a pandemic and experiencing extreme market volatility, Americans are becoming increasingly more concerned with their financial future. Reviewing different planning opportunities - *at least* annually - will give you the perspective and confidence you need to weather these storms.

Year-end can be a very busy time, but it's crucial to carve out some time to make sure that you end 2022 on a high note and position yourself in the best way possible for 2023.

While we can't cover every potential planning item, here is a strong list of considerations to have on your radar.

Flexible Spending Account (FSA)

The vast majority of FSA plans do not allow you to roll balances into the following plan year. Because it’s often a use-it-or-lose-it scenario, make sure you use your balance on qualified expenses.

Generally, you have until December 31st to incur the expenses and until April to submit reimbursement requests. Check with your provider to confirm plan-specific features and dates.

Required Minimum Distribution (RMD)

If you are age 72 and older, you are required to satisfy 2022 RMDs from pre-tax retirement accounts by December 31st. DO NOT wait until the last week of the year to process your distribution, as custodians can get backed up with several year-end processing requests. If you are working with an advisor, this is something they should be tracking and processing for you.

Also, if you are a beneficiary of a pre-tax retirement account, RMDs apply to you as well, so make sure you take them by year-end.

If you are a retiree who doesn't need your RMD to live on, then you may want to consider a qualified charitable distribution (QCD).

When thinking about your RMD strategy for 2023, consider waiting to take your RMD until later in the year. Stocks and bonds are both down significantly this year, so if you don't need the cash right away, waiting until later in the year could allow your investments more time to recover.

Gifts & Donations

If you’re looking back on the year and feeling extra generous with family and loved ones, then you can gift up to $16,000 per person in 2022 without impacting your estate tax exemption.

With the higher standard deductions in place since 2018, most taxpayers find it helpful to bunch their donations into a single year to maximize the tax benefits. Did you know that donating highly appreciated stock is a very tax-efficient way to make donations? A Donor-Advised Fund (DAF) is a great way to turn your lump-sum donation into a multi-year donation strategy.

Equity Compensation

December is a great time for executives and other employees to review their equity compensation. Keep tabs on what you’ve accumulated this year and anticipate what will be coming next year.

From a tax standpoint, consider that the value of restricted stock and exercised non-qualified stock options (NSOs) are taxed as ordinary income. If you exercise incentive stock options (ISOs) but don’t sell the stock in the same year, then you may be subject to alternative minimum tax (AMT).

As far as your investment strategy goes, determine whether to keep your accumulated shares or sell them. A strong consideration in your strategy is how much you are invested in your current employer. Between your income, options, and grants, you don’t want too much of your success to depend solely on your employer.

Portfolio Review

Year-end is a perfect time to assess your household investment strategy, with extra emphasis on the household. Each account should be playing a role and complementing all of your accounts – even the 401(k) from three employers ago that you haven’t done anything with.

Evaluate each position, rebalance your portfolio to its desired targets, and have a clearly defined strategy in place. If you have losses in your taxable account, then consider selling those positions to generate a tax loss. Be sure to look at each position from a tax lot view. While the total position might still be at a gain, if you have been continuing to invest in that position, you likely have some tax lots that are at a loss this year. You'll want to prioritize selling those specific tax lots.

Also, if you are retired, start thinking about your cash needs for 2023. If you'll need cash in the first half of the year, consider freeing up that cash now. That way, if the markets continue to go lower, you'll already have some of your spending needs accounted for. If you don't need cash right away, consider waiting to sell to give your accounts time to recover and you can avoid selling more shares to generate the same amount of cash.

Roth Conversions

It's very common for people to have the majority (if not all) of their retirement savings in pre-tax dollars, meaning those dollars have never been taxed. This creates a potential tax risk in the future because we don’t know what your marginal tax rate will be in six months, let alone in 10 to 30 years. We do know that if tax rates go up, more of your money will go towards paying taxes than supporting your lifestyle.

To help you navigate any high-tax environments in the future, consider Roth conversions. Anyone who finds themselves in a much lower income tax situation this year should see if converting a portion of their pre-tax savings to Roth makes sense. While you will be paying taxes today, the Roth dollars will now grow tax-free for the rest of your life and for the next generation.

Roth conversions are especially powerful during market corrections. With share prices lower, you can convert a greater number of shares for the same tax liability. When the market recovers and continues to move higher, you will have that many more shares growing for you tax-free.

Roth conversions require thorough and careful tax planning and cannot be reversed, so be sure to work with your advisor and CPA.

Identify Opportunities for 2023

Did you max out your 401(k) and still have money to save? Find out if your 401(k) plan offers an “after-tax” contribution option. No, this is not the same as Roth. If so, you might be able to take advantage of a “Mega Backdoor Roth” strategy. And, in 2023 you can contribute more to your 401(k) plan - $22,500 if under age 50 and $30,000 for those age 50 and over. You might also be eligible to contribute more to the "after-tax" bucket mentioned above.

If you’re an executive, your company may offer a 457 or deferred compensation plan that will allow you to save above and beyond the 401(k) limits. While tax-deductible contributions are nice to have, be aware of the credit risks that come with a deferred compensation plan before participating.

Interested in contributing to a Roth IRA? The contribution limits for 2023 increased to $6,500 - with the age 50 and older catch-up contribution remaining at $1,000. The income phaseouts were also adjusted and will start at $138,000 for single filers and $218,000 for married filing joint filers. If you’re not eligible for contributions, then talk to your advisor about a “Backdoor Roth IRA.”

If you’re in a high deductible health insurance plan, then see if you’re eligible for arguably the strongest savings vehicle out there – a Health Savings Account (HSA). HSAs offer triple-tax savings potential.

  • Tax-deductible contributions

  • Tax-deferred growth (if invested)

  • Tax-free distributions for qualified health expenses

On top of the tax benefits, some employers will even make a match contribution to your HSA. With health issues that can arise later in life, HSAs are perfect for long-term care planning. And, unlike a Flexible Spending Account (FSA), an HSA is a savings account, so your balance stays with you.


Your checklist may be different from another person’s, and your own list may be different year-to-year. Take this time to reflect on what you're truly working towards to know which planning items should be on the top of your list for the rest of 2022 and in 2023.

Your GPS won’t give you directions until you tell it where you want to go. The same applies to your money. Identifying your goals will allow you to have a real strategy in place and prevent you from going off course during markets like these.

Katie Blechschmidt, CFP®

Director of Client Success


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