Year-End Considerations to Review with Your Financial Planner

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By Katie Bruno, CFP®, CDFA®, MIMFA
Financial Planner



 As the year’s end quickly approaches, it is a good time to review your financial plan and consider strategies that could have both short and long-term impacts on your financial goals and taxes.


2020 Has Been Full of Change

It’s good to do a financial review every year, but in light of all the changes 2020 has brought, the end of this year is an especially good time to make sure your financial plan is in order. 

At the close of 2019, the federal government passed the SECURE Act, which was a comprehensive piece of legislation involving a number of provisions for retirement savings and retirement plans. Earlier in 2020 in response to the COVID-19 pandemic, the federal government also issued a stimulus package, the CARES Act, which may have additional impacts on your financial goals and plans. 

To help you better understand these changes and more, this article by Morey & Quinn Wealth Partners highlights four key areas for 2020 year-end review.

1. Changes to Your IRAs and Retirement Plans

Required Minimum Distributions

In 2020, per the CARES Act, Required Minimum Distributions (RMDs) are waived. RMDS are amounts that U.S. tax law require investors to withdraw annually from traditional IRAs and employer-sponsored retirement plans. Under normal rules, the amount not withdrawn under the RMD is penalized at a rate of 50%. IRA owners who turn 70 1/2 after 2019 can now wait until age 72 to start taking RMDs. When the CARES Act’s temporary RMD waiver ends, those who turned 70 1/2 before 2020 are required to continue following the old rule – for everyone else, RMDs start at age 72.

Qualified Charitable Distributions 

Changes to RMD rules for this year do not impact the ability to make a qualified charitable distribution. For an IRA owner who is older than 70 ½, they can distribute up to $100,000 of their IRA directly to a charity and exclude that distribution from income and federal tax. You do not have to itemize to get this deduction so this could be advantageous for someone who takes the standard deduction. 


The SECURE ACT tightened rules on inherited IRAs and workplace-sponsored retirement plans. It requires most inherited IRAs and workplace retirement accounts to be fully distributed within 10 years of the death of the IRA owner or 401(k) participant. If you have inherited an account in 2020, it might make sense to review your income and strategy to make sure you are maximizing your options.

Read More About SECURE Act Beneficiaries »  

Early Withdrawals 

  • Coronavirus distribution: Account owners can withdraw up to $100,000 from an eligible retirement plan (ex. 401(k) or 403(b)) without penalty for coronavirus-related needs. The 10% penalty for withdrawing up to $100,000 from a retirement account prematurely – is temporarily waived by the CARES Act when taken for coronavirus-related needs. You have 3 years to pay the taxes on the withdrawal or to pay the account back to undo the tax consequences. 
  • Distribution for birth of a child or adoption: For those having or adopting a child, payouts from IRAs and 401(k)s up to $5,000 per parent are no longer subject to the 10% penalty for withdrawals made before age 59 1/2. 

Retirement Planning with Morey & Quinn »

2. Employee Benefits and Healthcare Saving Options 

The vast majority of employees don’t use all benefits found in their employee benefit package. As we wrap up 2020 and head into 2021, many companies will offer open enrollment to their employees, which is a time to change or adjust your benefit selections. It’s also a great time to review all of your benefits and note whether you’re able to take advantage of anything new, or previously missed. By taking a thorough review of your benefits, you prevent leaving money or resources on the table. 

One example benefit that’s often overlooked is participation in a health savings plan. 

Health savings accounts (HSAs), flexible spending accounts (FSAs), and health reimbursement arrangements (HRAs) are all plans that can be used to pay qualifying medical expenses in a tax-advantaged way. A few changes to these plans took effect in 2020, and then additional changes were made in response to the pandemic. Here are some key changes to be aware of:

  • Funds in HSAs, FSA, and HRAs can be used for over-the-counter medicines and menstrual care products effective in 2020.
  • As part of the CARES Act, high deductible health plans can temporarily cover telehealth and other remote care services without a deductible, or with a deductible below the minimum annual deductible.
  • The IRS announced that anyone with coverage under an HDHP may make an HSA contribution despite receiving coverage for telehealth and other remote care services before satisfying the HDHP deductible, or despite receiving coverage for these services outside the HDHP.

3. Expanded Uses for Education Savings 

Starting in 2020, 529 plans can be used to pay for other post-secondary related costs such as books, supplies, fees and equipment for several apprenticeship programs. Additionally, up to $10,000 can be withdrawn from a 529 plan to pay student loans. The CARES Act furthered these changes by allowing employers to give up to $5,250 towards an employee’s student loans. (Previously, the employer could cover only current educated related expenses such as tuition up to $5,250). The payments are not considered income for tax purposes. 

Read More About Education Savings »

4. Other Year-End Considerations and Strategies

Every financial situation is unique. Though the financial changes of 2020 seem complicated and vast, talking through your current situation and adjusting strategies with a financial professional can help you feel informed and better prepared for the future. 

Below is a list of considerations to include in your annual review, especially this year:

  • Review your estate plan. Adjust for any events or changes in personal circumstances. With the risk of COVID-19 remaining, it is even more important to make sure you have your wills, power of attorneys, healthcare directives and living wills up to date. You should also double check your beneficiaries on your accounts.
  • Consider donating to charities. The CARES Act raised the limits on deductions of cash donations made to qualified charities from 60% to 100% of adjusted gross income. Cash gifts that exceed your income can be carried forward for five years. The CARES Act also added an above the line deduction of $300 in charitable cash contributions for those who chose not to itemize but use the standard deduction.
  • Explore taking a Roth IRA conversion. This means moving part of your traditional pre-tax IRA to a Roth IRA. By doing this, you accelerate your income taxes today to create tax-free retirement account growth. If you’re unable to contribute to a Roth IRA directly because you don’t qualify, you may benefit from contributing to a Traditional IRA, then converting the funds to a Roth IRA.
  • Rebalance your portfolio. In light of all the market volatility we experienced in 2020, your asset allocation may have shifted. The year we saw large gains in technology and healthcare companies, which could mean you are overweight in those sectors and may need to trim back profits. Make sure your portfolio is allocated to meet your long-term goals and your risk tolerance.
  • Review tax-losses. If you have depreciated stock positions, consider selling them to lock in the losses. This will offset gains and reduce taxable income this year or in future years as a carryforward. Remember the IRS only allows $3,000 of losses per year. 

Morey & Quinn Financial Planning Services »

The Most Important Call You Can Make

As the year comes to a close, the most important decision you can make is to speak with a financial planning professional to ensure everything in your financial plan is in order. There have been many new provisions released throughout the year, and it’s best to consult with a professional before making any significant changes. There is still time left in 2020 to take action if needed. The financial planning professionals at Morey & Quinn Wealth Partners invite you to start a personal conversation. Let’s take stock of what 2020 has brought, celebrate the good, and move out what’s not working for you.

Schedule your year-end review today! 

Contact Morey & Quinn Wealth Partners » 

Morey & Quinn Wealth Partners 
Phone: 402.502.9900 
Toll Free: 877.541.6593 
11225 Davenport St, Suite 109 
Omaha, NE 68154

Any opinions are those of Katie Bruno, CFP®, CDFA®, MIMFA, and not necessarily those of RJFS or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional. 

As with other investments, there are generally fees and expenses associated with participation in a 529 plan. There is also a risk that these plans may lose money or not perform well enough to cover college costs as anticipated. Most states offer their own 529 programs, which may provide advantages and benefits exclusively for their residents. The tax implications can vary significantly from state to state.

Unless certain criteria are met, Roth IRA owners must be 591⁄2 or older and have held the IRA for five years before tax-free withdrawals are permitted. Additionally, each converted amount may be subject to its own five-year holding period. Converting a traditional IRA into a Roth IRA has tax implications. Investors should consult a tax advisor before deciding to do a conversion.


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