What should I do about year-end planning?

I’ve made a good deal of progress pursuing my financial goals so far this year, but I’d like to be in a position to do an even better job next year. What should I do about yearend planning?

Any time you sit down to address your year-end planning needs, it makes sense to review your investments to determine whether you need to rebalance in order to stay on the right financial track. If you have not reviewed your portfolio lately, you may be surprised at what you find. It’s possible that your current asset allocation has changed quite a bit since the last time you checked, due to the different performance of the various investments in your portfolio. If that’s the case, or if your outlook has changed, it may be time to readjust.

You should also think about conducting an insurance needs analysis. There are many forms of insurance but, unfortunately, there is no one-size-fits-all policy. Life insurance, for example, may be a vital necessity if you have a spouse and children, but perhaps is less important for a single person. But disability insurance, which provides an income stream if you are unable to work, may be important for everyone.

You’ll also want to turn your attention to estate planning (including tax-efficient gifting strategies), so you can potentially minimize gift and estate taxes and keep more of your assets for those you care about.

It may help to meet with your financial advisor to discuss your year-end planning needs. Make sure to bring the following documents: insurance policies and annuity contracts, as well as pension, investment and savings account statements.

You should also be prepared to provide an overview of your most important short- and long-term financial goals. That way, you’ll be able to see “the big picture” and then focus in on laying the groundwork for a lifetime of financial security.

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Asset allocation and rebalancing do not protect against a loss in declining financial markets. There may be a potential tax implication with a rebalancing strategy. Please consult your tax advisor before implementing such a strategy. Life insurance and disability income insurance are offered through Morgan Stanley Smith Barney LLC’s licensed insurance agency affiliates.

Morgan Stanley Smith Barney LLC (“Morgan Stanley”), its affiliates and Morgan Stanley Financial Advisors and Private Wealth Advisors do not provide tax or legal advice. This material was not intended or written to be used for the purpose of avoiding tax penalties that may be imposed on the taxpayer. Individuals should consult their tax advisor for matters involving taxation and tax planning and their attorney for matters involving trust and estate planning and other legal matters.

Article by Wealth Management Systems, Inc. and provided courtesy of Morgan Stanley Financial Advisor.

The author(s) are not employees of Morgan Stanley Smith Barney LLC (“Morgan Stanley “). The opinions expressed by the authors are solely their own and do not necessarily reflect those of Morgan Stanley. The information and data in the article or publication has been obtained from sources outside of Morgan Stanley and Morgan Stanley makes no representations or guarantees as to the accuracy or completeness of information or data from sources outside of Morgan Stanley. Neither the information provided nor any opinion expressed constitutes a solicitation by Morgan Stanley with respect to the purchase or sale of any security, investment, strategy or product that may be mentioned.

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