Year End: Where are you with your financial goals?

Bernard Wealth Management |

Submitted by Bernard Wealth Management on November 24th, 2020

As unprecedented a year as 2020 has been, one thing remains certain – it will be coming to an end on December 31st!  Now is a good time to evaluate where you are with your financial goals.  With year-end deadlines in mind, we wanted to send the following reminders.

All Required Minimum Distributions (for IRAs, Inherited IRAs, 401(k)s, and 403(b)s) have been waived for 2020. This is a great opportunity to let your retirement assets continue to grow if you don’t currently need the income. RMDs are expected to resume in 2021.  As a reminder, the age to start RMDs was raised from 70 ½ to 72 under the SECURE Act of 2019.

For 2020, 401(k) and 403(b) contributions are limited to $19,500, but those 50 and older can also do a catch-up contribution of $6,500.  These contribution limits will remain the same for 2021.

The contribution limit for IRA contributions, whether Traditional or Roth, is $6,000; ages 50 and older can contribute an additional $1,000 as a catch-up contribution. The deadline for these contributions is April 15, 2021.

If you are in a lower income bracket this year than previous years (perhaps due to the suspension of Required Minimum Distributions), you may want to consider converting your IRA to a Roth IRA. Bernard Wealth Management can both walk you through the process and also discuss the matter with your tax professional.

If you are a small business owner, you may want to discuss retirement plan options.  A SEP IRA or Solo(k) may allow you to boost your retirement savings significantly.

If you are considering year-end charitable donations, you may want to consider using your investment accounts for this.  If you have securities that have increased in value, you can donate them in kind to avoid paying taxes on the gain.

If you are looking to increase your charitable giving over time, you may want to consider opening a Donor Advised Fund.  This account can be funded with appreciated securities or cash for an immediate tax deduction. You can then make grants to charities of your choice at any time.

If you are over 70 1/2, you can donate to a charity directly from your IRA. This allows you to avoid taxes on the IRA distribution.

As always, we are here to discuss financial planning or investment questions that you may have.  Please reach out at any time at (248) 556-2900 or

Deanna Harless, CFP™
Ken Bernard, CFA
Andy Niedermeier