6 Year-End Retirement Plan Tips to help your portfolio be top performing

Last Updated: December 08, 2016

The end of the year is approaching fast. For many of us, that means spending time with friends and family and eating way too much.  Before we get distracted from one of the happiest (and most stressful) times of the year, here are some year-end tips you may want to consider with your investments:

1. Reassess your Goals and Risk Tolerance.
Are you on track to have a successful retirement? Are you going to meet your goals? This is a great time to see how well your portfolio has done throughout the year. Reevaluate your goals to see if they are still realistic or even relevant anymore. Look at how much risk your portfolio is exposed to currently. If you are closer to your retirement date, make sure you are still comfortable with that amount of risk exposure. If you are unsure, take another risk tolerance questionnaire to help you decide what type of investor you are. Look at allocation models to help guide your decision on the amount of risk you want to take for your age.

2. Get a Retirement Checkup.
No one wants to out-live their nest egg. Retirement doesn’t just happen. I tell people this on a daily basis. A successful retirement is going to require some work on your end. One way to be active in your retirement planning is by running a retirement checkup.  A checkup can help determine if you are on track to live on the funds you want in retirement. If for some reason the checkup is portraying unfavorable numbers, figure out the adjustments you need to make. Doing a checkup on a yearly basis will provide instant feedback to see if you are on track for a successful retirement.

3. Increase your Contributions.
The end of the year is also a great time to try to max out your retirement accounts. Whether you are trying to lower your taxable income or just wanting some of your money to grow tax deferred, retirement accounts provide you with some of the best tax benefits around. A 403b or 401k plan is capped at $18,000 a year. If you are over 50, you can also contribute an additional $6,000 as a catch-up contribution. This gives you a grand total of $24,000 you can put toward your retirement. If you have not met these limits yet, you have until December 31st to do so.

4. Rebalance your Investment Portfolio.
Is your portfolio riskier than you realize?  If you have a buy and hold strategy and have not looked at your investments in a while, your portfolio might be riskier than you think. In bull markets, the equity of your portfolio is going to increase because those investments grew. For example, if you have a typical 60/40 split between stocks and bonds, your 60% stocks may have grown to 70%. The same goes for bonds and even cash. You might be taking on more or less risk than you realize simply due to how the market is performing. Rebalancing your portfolio to a risk level you are comfortable with is a good practice to keep up.

Rebalancing helps you with two main things. First, it helps provide you with peace of mind that your investments have as much or as little risk as you are comfortable with. Second, rebalancing helps investors follow the magic rule: buy when the market is low and sell when the market is high. Too often investors are getting into investments when they reach their peaks, and selling when they reach their lows. In a bull market, your portfolio is going to have more equity than before. When you rebalance, you are selling off some of this equity and putting it into the funds that have not done as well during that time period. In essence you are selling when funds have increased, and buying when funds have decreased. Sure, you might be missing out on potential gains if the market remains bullish, but remember those extra gains are only coming with extra risk.

5. Take your Required Minimum Distributions.
Another important thing to remember is to take your required minimum distributions. If you are over the age of 70 ½ or have an inherited IRA, you are required to take these distributions by December 31. If you fail to take them, the penalty is steep. On top of the hefty penalty, income taxes are still due. Not all companies remind clients of RMDs, so it is important that you check for yourself.

6. Harvest your Tax Losses.
The best and most well-diversified portfolios have losses from time to time. If some of your investment positions find themselves in the red, maybe it is a good time to consider selling some of them to realize their loss. I realize selling at a loss means getting out when times are bad. This goes against the golden rule of selling when the market is high. In some cases however, certain investments are not going to rebound. Trying to determine if your portfolio has any investments that might need to be replaced can be a difficult task, but can be a rewarding one. These losses can offset gains from mutual funds, ETFs (Exchange Traded Funds), and the sale of appreciated holdings.  If recognized losses exceed gains, you can deduct up to $3,000 per year towards ordinary income. If your losses are higher than that, they can be carried forward to future years until you use them all. Remember that the IRS wash sale rule still applies. You cannot sell bad stocks just for the deduction, and then turn around and buy the same (or substantially similar) stocks within the next 30 days hoping the stock recovers.

Deciding whether your portfolio is where it needs to be can be a daunting task, especially if you have to do it on your own. Having someone take a non-biased look at your portfolio can be very rewarding. It can help ease your mind that your account is on track to meet your goals. To learn more about these five tips and how to help make your portfolio top performing, contact a Pension Consultants Retirement Consultant at (417) 889-4918 or The holidays are stressful enough. Go into one of the happiest times of the year with one less thing to check off your to-do list.


PCI’s archived blog entries are dated, the rules and statutes referenced may have changed. The analysis or guidance within these blog entries may have become stale, dated, or no longer accurate. PCI will not update or change these entries to reflect the latest analysis or developmen


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