Financial Planning

2021 End Of Year Financial Planning Opportunities

As we approach the end of the year, there are a bunch of financial planning opportunities available to close out this year strong. I have had this post ready for awhile, and last week my friend Travis Gatzemeier put out an awesome one pager with most of these ideas so I will link to that here for you to check out as well. 

Financial Planning Opportunities:

Retirement Accounts/Health Accounts

  • You can contribute $19,500 per year for those under 50 to your 401(k), if you have extra cash and still some room left, consider increasing contributions and supplementing income from extra savings if need be. 
  • For those with really high incomes, consider after tax contributions to your 401(k) (limit of $58,000 combined between your contributions and your employers) 
  • You may have until April 15th, 2022 to do ROTH IRA or traditional IRA contributions, but this is a good time to contribute if you have extra cash available ($6,000 a year). Try and max out these tax advantaged accounts if you can.
    • The Backdoor ROTH IRA may go away starting next year, so for those high income earners, you may want to get the full $6,000 done in December to be safe. 
  • If you started a business or are in a low tax bracket this year for some reason, consider ROTH conversions to move pre-tax money to post-tax while you are in a lower tax bracket. 
  • If you have multiple 401(k)’s still out there from old employers, merge these accounts together into your existing 401(k) or an IRA. Multiple accounts can get messy and forgotten about. 
  • If you have not maxed out your Health Savings Account, this would be a great time to do so. You can contribute $3,600 for singles and $7,2000 for families. This is a great tax planning tool. If you are in the 22% tax bracket and contribute $7,200, you will lower your tax bill by $7,200 x .22 = $1,584. 
  • If you have an FSA, look into what can be rolled over so you know how much needs to be spent before the end of the year. We don’t want to waste any money here. 

Taxable Accounts

  • If have a lower income and have some room for 0% long term capital gains, consider selling to maximize this. 
  • With your taxable account, you could sell and take capital losses up to $3,000 to reduce your tax bill. 
  • Review your last year and see how you feel about the volatility of your investments. If they were too volatile, consider reducing risk to align with your own risk tolerance or vice versa. 
  • Rebalance your portfolio if certain areas grew significantly and your asset allocation is out of order. 

Equity Compensation Planning

  • List out all the dates you need to know for next year: when they vest, when you would sell, how much you may sell, etc. 
    • Create a plan so you know the actions you are going to take next year, you don’t just want to wing it. 
  • If you did not take part in your company ESPP this year, look into whether you should do it next year, how to plan for cash flow needs, etc. 
  • Review your concentration and see how much you have invested in your own company and if that aligns with your risk tolerance. If not, look into selling certain portions and diversifying. 


  • Review your budget for this past year. Did you overspend? If so, what changes need to be made for next year. If you underspent, move that money out of your checking account and start to automate more dollars every month.
  • Many companies offer bonuses and salary increases at either the end of the year or the start of the new year. Review these changes and how much more income you will have so you can automate a certain portion of this to your next year goals. Don’t just wing it and end up inflating your lifestyle by 100% of the raise you get.
  • Review spending from last year and ensure the way you spent is aligned with what you value and your goals. Oftentimes people overspend in areas they had no idea about.  

Student Loans

  • Student loans are about to start back up February 1, so be sure you have a plan in place and know how this will change your monthly cash flow. 
  • If your student loans come with a high interest rate and you aren’t going for loan forgiveness, consider looking into refinancing. 

Other Action Items

  • Review and change your beneficiaries on life insurance if you have any life changes that could have happened (marriage, kids, etc.) or if you just haven’t in awhile. 
  • Review your net worth growth from this year. Reviewing this and seeing your success is so helpful for pushing you to continue to grind it out. 
  • If you have not gotten your estate planning documents done yet, get started on these ASAP. You can do it cheaply now with an online vendor, so there’s no reason to wait. 
  • Start a 529 plan if necessary, and contribute to get potential tax benefits (based on your state since they are all different)
  • Consider charitable donations at the end of the year to maximize tax savings (either from giving money or donating appreciated securities) if you itemize. 

Hope this helps you have a plan in place to maximize the opportunities you have before the end of the year! If you need any help with it, please feel free to reach out!