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End of Year Money Moves

For many, this year has been as complicated as learning a new dance. Did you start a new job or leave one behind? Did you choose to move to a new city and relocate? If notable changes have occurred in your personal or professional life, then you may want to review your finances before this year’s end. Ensuring that you have made all of the right moves in 2020 might put you in a better position to tango with 2021.   

Tax-Loss Harvesting

Tax-loss harvesting is the practice of taking capital losses (selling securities worth less than what you first paid for them) to leverage your capital gains. As much as $3,000 of your capital losses in excess of capital gains can be deducted from ordinary income, and any remaining losses can be carried forward until used up.

Gifting Or Donating

Donating money and resources to charities is not only the right thing to do and a generous act but can also qualify as a tax write-off. You can seek deductions for up to 60% of your donation. Talk to your tax preparer. 

Year-End Rebalancing 

Year-end rebalancing is a strategy that all investors should consider. This process considers realigning the balance of your portfolio assets. BeniGro’s Robo advisors rebalancing process involves periodically buying or selling securities in your portfolio to maintain the desired level of asset allocation or risk. 

For example, let’s say your target asset allocation strategy was to maintain a portfolio of 50% stocks and 50% bonds. Over the course of this year, after noticing that your stocks were overperforming, you increased your allocation into those securities. Now, during this period of rebalancing, you may want to consider selling some of those stocks you previously invested in and get closer to your initial portfolio balance goal of 50% stocks and 50% bonds.

The Best Dance Moves Are Saved For Last

New Year’s Eve may put you in a (socially distanced) dancing move, eager to say goodbye to the old year and welcome 2021. Before you put on your dancing shoes, consider speaking with our Investment Advisors in US or tax professionals. Do it now, rather than in February or March. Little year-end moves might help you improve your short-term and long-term financial situation.

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