Your year-end financial checklist

The holidays can be a hectic time. It’s easy to put aside your financial health during busy times, but here’s a quick financial checklist to consider before the end of the year.

Contribute more to your 401(k). The maximum salary deferral limit for 401(k) plans in 2014 is $17,500, while those who are age 50 and older may contribute up to $23,000 per year. If you make contributions on a pre-tax basis, you may be able to increase your contributions and lower your current year tax liability. Contributions must be made by payroll deduction by December 31, so speak to your employer’s human resources or payroll department to find out how to increase your deferrals.

Take your required minimum distribution (RMD), if you haven’t already. If you turned 70.5 years old before 2014, you must take the RMD from your 401(k) by December 31 unless you’re still working for that employer. If you don’t take your RMD, the penalty is a federal tax of 50 percent on the amount you should’ve taken. Contact your tax advisor for additional information.

Reallocate your investments to reflect your current goals. Reassess your time horizon, goals and risk tolerance, then adjust your portfolio accordingly.

Review your beneficiary information. Has there been a birth of a child or grandchild? A marriage or divorce? Confirm that your will names the appropriate beneficiary or beneficiaries and that the allocations meet your wishes. This also applies to each insurance policy, each retirement account and anything that transfers by beneficiary designation.

Get your annual physical and take care of other health necessities. Your health benefits likely reset on January 1. Make the most of both your benefits and your flexible spending account (FSA), if you have one, by scheduling and going to appointments you might be delaying, like your annual physical and eye exams, your bi-annual dental exam and any specialist appointments you need.

Review your progress on the financial goals you set at the beginning of the year. Did you reach the goals and adhere to the guidelines? Are they worth repeating next year? Do they require adjustment? Knowing where you stand will help you create a financial plan for 2015.

After assessing your progress toward your 2014 goals, set financial goals for 2015 and prepare your 2015 budget. If you kept a budget in 2014 or have credit or debit card accounts that track how you spend your money, use these tools to evaluate how and when you spend. If you’ve not made a budget before, there are many online tools to help you, such as budgetsimple.com. You’ll need basic information, like your net income and recurring expenses, to get started. You might be surprised at the financial discipline you find when you see your income and expenses in black and white.