5 Key Financial Steps for Your 2024 Estate Plan!

Posted by Jacklyn Truppa | Jan 23, 2024 | 0 Comments

As the year comes to a close, it presents a critical juncture for assessing your financial, retirement, and tax strategies. These actions are not only pivotal for your immediate financial situation but also have a profound impact on your estate planning and the overall financial well-being of your family. Moreover, if you have aging parents in their 70s, it's imperative to engage in these discussions with them as well. In this comprehensive guide, we will delve into five key considerations that can help you navigate this financial landscape with confidence and foresight.

Financial and Estate Planning Documents on a Desk


Table of Contents

  1. Harvesting Investment Losses: Tax-Efficient Strategies

  2. Boosting Your Retirement Savings: Secure Your Financial Future

  3. Required Minimum Distributions (RMDs) and Charitable Giving: Navigating Your Golden Years

  4. Inherited IRA RMDs: Navigating Complex Regulations

  5. Roth IRA Conversion: Seizing the Opportunity


1 - Harvesting Investment Losses: Tax-Efficient Strategies

One of the first items on your year-end financial checklist should be reviewing your investment portfolio, especially if you hold assets in a taxable account. This evaluation includes taking a closer look at your cryptocurrency investments. The primary objective here is to identify underperforming assets that can be strategically sold to offset any gains realized during the year.

By strategically selling assets at a loss, you can significantly reduce your tax liability for the year. This is a tax-efficient approach, as it helps to mitigate the impact of capital gains on your overall financial picture. Moreover, the benefits extend beyond the current tax year. You can carry forward investment losses to offset capital gains in future years.

Now, for those involved in cryptocurrency investments, there's a unique opportunity. Unlike traditional investments, cryptocurrency investments offer the advantage of avoiding the "wash sale" rule. This rule typically mandates a 30-day waiting period before reinvesting in the same asset after a sale. However, with cryptocurrencies, you can sell your holdings before the year-end and promptly repurchase the same tokens without being subject to this waiting period.

It's essential to keep in mind that once the calendar flips to the new year, you lose the opportunity to harvest losses to offset against the previous year's capital gains. So, this is a time-sensitive strategy that requires prompt attention. 

2 - Boosting Your Retirement Savings: Secure Your Financial Future 

A critical component of your financial planning involves maximizing your retirement account contributions for the year. Depending on your circumstances, you have several options to consider, each with its own set of contribution limits for 2024:

401(k), 403(b), and most other defined contribution plans: You can contribute up to $19,500. Traditional and Roth IRAs: You're allowed to contribute up to $6,000, with an additional $1,000 catch-up contribution if you're aged 50 or older. SIMPLE IRA: The contribution limit is $13,500, and there's a $3,000 catch-up contribution available for those 50 or older. SEP IRA: Contributions can reach up to 25% of your salary, with a maximum limit of $58,000.

Boosting your retirement savings not only helps secure your financial future but also provides valuable tax advantages, as contributions to these accounts are often tax-deductible. Be sure to assess your eligibility and maximize your contributions before the year-end to optimize your retirement planning. 

3 - Required Minimum Distributions (RMDs) and Charitable Giving: Navigating Your Golden Years 

If you're 73 years of age or older and have a traditional IRA, it's imperative to take your Required Minimum Distributions (RMDs) before the end of the year. For those turning 72 in 2024, you have until April 1, 2024, to take your first RMD. Failing to adhere to these deadlines can result in a substantial penalty—50% of the amount you were supposed to withdraw but didn't.

Consider converting your RMD into a Qualified Charitable Distribution (QCD) as an alternative. A QCD enables you to make a tax-free transfer directly from your IRA to a charity of your choice, with an annual limit of $100,000. By doing so, you not only fulfill your RMD requirement but also engage in charitable giving that can positively impact your tax situation.

It's essential to emphasize the significance of adhering to RMD deadlines and exploring the potential benefits of QCDs before the close of the tax year. Failing to meet these requirements can result in significant financial consequences. 

4 - Inherited IRA RMDs: Navigating Complex Regulations 

If you've inherited an IRA, navigating the rules surrounding Required Minimum Distributions (RMDs) can be complex. This complexity is further compounded if you inherited the IRA before the passage of the SECURE Act or if you're an eligible designated beneficiary who inherited in 2020 or 2021.

For individuals who fall into these categories, you will need to take an RMD for the current year. Additionally, if the original account owner did not take an RMD in the year of their passing, you may be required to withdraw a Year of Death RMD by the end of the year.

It's important to note that the IRS has provided relief by waiving the 50% penalty for 2024 RMDs that aren't taken when a beneficiary is subject to the 10-year payout rule under the SECURE Act. However, the intricacies of these rules can be daunting, and it's highly advisable to seek the guidance of a financial advisor, especially if you have inherited an IRA. 

5 - Roth IRA Conversion: Seizing the Opportunity 

If you've been contemplating a Roth IRA conversion, the current financial landscape offers a favorable environment to do so. This strategy involves converting your traditional IRA into a Roth IRA, potentially allowing for tax-free withdrawals in retirement. 

Several factors make this an opportune time for a Roth conversion. First, current tax rates are relatively low, making the conversion more tax-efficient. Second, market adjustments may have temporarily reduced the value of your investments, resulting in a lower tax liability upon conversion. 

However, it's essential to act swiftly, as the deadline for completing a Roth IRA conversion for the tax year 2024 is December 31. 

In summary, these financial and retirement actions are not merely checkboxes to mark off; they are pivotal steps that can significantly impact your financial health, your estate planning, and your family's financial future. By harvesting investment losses, maximizing your retirement contributions, managing RMDs, navigating inherited IRAs, and considering a Roth IRA conversion, you're actively safeguarding your assets, minimizing tax liabilities, and ensuring a smooth financial transition for your loved ones. 

It's crucial to remember that estate planning is about more than just documents; it's about informed decisions that shape your future and the future of your family. To take your financial organization to the next level and make the best choices for your loved ones. Click here to schedule a Family Wealth Planning Session™ with us. Mention this article, and you can access this valuable $750 session at no charge. 

As always, we're here to support you on your journey toward financial security and peace of mind. Financial planning is a dynamic process, and with the right strategies in place, you can confidently navigate the ever-changing financial landscape and achieve your long-term goals.

About the Author

Jacklyn Truppa

Hello! I am Jacklyn Truppa, the founder of Dynasty Law, LLC. I am so happy to share with you the steps that can help protect your family, to provide you peace of mind. First and foremost congratulations on taking such a courageous step and may...


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