Shape Up Your Financial Plan for 2024 | Summary and Q&A

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December 7, 2023
by
Charles Schwab
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Shape Up Your Financial Plan for 2024

TL;DR

As the year comes to a close, investors should review their portfolio, consider tax-saving strategies, and update their estate plans.

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Key Insights

  • 🤩 The relationship between bond yields and stock prices is a key factor to watch, as lower bond yields could provide support to the equity market.
  • 👮 Investors should not delay reviewing their estate plans, as changes in the estate tax laws may be on the horizon.
  • 🥡 Taking a long-term view and not taking on more risk than necessary can help investors navigate uncertain times.
  • 🚕 Maximizing tax-saving opportunities, such as tax-loss harvesting and Roth IRA conversions, can help minimize tax liability.
  • ☠️ Fixed income investments, such as bonds, may offer higher yields in a changing interest rate environment.
  • 🌱 Planning for future financial goals, such as retirement and education funding, should be part of a comprehensive financial plan.

Transcript

the end of the year for me is always something of a scramble getting ready for the holidays putting the tree up and the lights on the house trying to avoid the malls while getting my shopping done but amidst the holiday hubub I try to be disciplined about taking stock of my financial footing before the year ends for all of us investors the end of t... Read More

Questions & Answers

Q: How have the markets performed this year?

The S&P 500 has seen a 20% gain year-to-date, making it a strong year for investors. However, there are concerns about whether this momentum will continue in 2024.

Q: What opportunities are there for tax savings before the end of the year?

Investors can consider tax-loss harvesting, which involves selling securities with losses to offset realized gains and reduce tax liability. Other strategies include maximizing retirement plan contributions and considering Roth IRA conversions.

Q: Are there any changes to the tax code coming in 2024?

Yes, changes in 2024 include higher standard deductions, increased contribution limits for retirement accounts, and an increase in the limit for qualified charitable distributions.

Q: What should investors consider in terms of estate planning?

It is important for investors to have a current estate plan that reflects their wishes. Changes to estate tax laws in 2025 could impact estate planning strategies, so it is important to review and update plans accordingly.

Summary & Key Takeaways

  • The markets have shown strong gains this year, with the S&P 500 up 20% year-to-date. However, there are concerns about whether this momentum will continue in 2024, given the upcoming presidential election, Federal Reserve actions, and geopolitical uncertainties.

  • Investors should take advantage of year-end opportunities, such as tax-loss harvesting, to reduce their tax liability. Other strategies include maximizing retirement plan contributions and considering Roth IRA conversions.

  • Changes to the tax code in 2024 will include higher standard deductions, increased contribution limits for retirement accounts, and an increase in the limit for qualified charitable distributions. However, investors should also be aware of potential changes to estate tax laws in 2025.

  • Despite uncertainty, investors can take steps to protect their portfolios, such as scheduling a review with a financial consultant, considering opportunities in the fixed income market, and updating their estate plans.

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