As the year comes to a close, financial experts from First National Wealth Management in Sioux Falls share their insights on how to optimize your finances. Through the latest episode of the podcast “Common Cents on the Prairie,” Adam Cox, Kyle Cipperley, and Don Rahn provide actionable advice on everything from portfolio rebalancing to maximizing gift tax exclusions. Discover how you can take control of your financial future with these expert-endorsed strategies.

Strategic Financial Review and Portfolio Management

The end of the year is the perfect time to reassess your financial standing and make necessary adjustments. Experts recommend focusing on what you can control, such as your savings rate and portfolio allocation. By updating your balance sheet and rebalancing your investments, you can ensure your financial goals remain aligned with market conditions.

To maintain a healthy financial outlook, it's crucial to review your balance sheet annually. According to financial advisors, this involves evaluating controllable factors like your savings rate and ensuring it aligns with long-term objectives. As you approach retirement, closer monitoring becomes essential. Additionally, rebalancing your portfolio is vital, especially after significant market gains. This process helps manage risk by adjusting stock percentages and reallocating funds into bonds or cash, ensuring your investment strategy remains robust.

Maximizing Tax Benefits and Estate Planning

Taking advantage of tax benefits and planning for major expenses are key components of effective financial management. From leveraging gift tax exclusions to initiating tax-loss harvesting, these strategies can significantly impact your financial health. Proper planning also extends to managing required minimum distributions and preparing for upcoming expenses.

One effective method for wealth transfer is utilizing the annual gift tax exclusion. Couples can give up to $18,000 per recipient without incurring taxes, providing a generous way to support family members while reducing estate size. High-net-worth individuals often use this as a test to gauge recipients' financial responsibility. Moreover, tax-loss harvesting allows investors to offset gains or income by realizing losses in their portfolios. This practice can reduce taxable income, but requires careful timing to avoid wash sales. Finally, ensuring compliance with required minimum distributions (RMDs) from retirement accounts is critical to avoid penalties. Consolidating accounts simplifies tracking and ensures timely withdrawals. Additionally, planning for large expenses, such as home renovations or children's needs, should be done well in advance to mitigate market risks.