At year-end, or the beginning of a new year, I like to step back and take a closer look at how things are going and what needs to happen next. Maybe you do too.

I wrote a series of financial planning books a couple years ago and this fall I found myself reading my own books specifically to get to the diagnostic questions that are there. Whether or not you do the actual analyses, the questions themselves can help you take a deeper look at your financial situation.

Mind Map

A mind map is a one-page picture of your financial situation. You can find examples in most of my books. What I found in my own situation was that my “picture” was a lot more complicated than I’d like. Especially over on the estate planning side. I have my own situation, but I’m also the executor/trustee for my aunt’s estate (that is still lingering after four years—but almost done!), and I help in several other family situations.

Also, I found that being single and without children, the traditional pattern of leaving everything to the kids and grandkids isn’t a possibility in my case. It gets more complicated when you must think about who can help you in a variety of difficult situations (disability, who takes care of the elderly relatives or pets if you go first, and so forth). I thought adding a well-thought-out philanthropy plan would help, and it does, but sometimes it raises even more questions. And you must find a balance with giving to people you care about and causes you support.

Anyway, here are some of the questions I asked myself and you may find helpful too. Keep in mind that simple is sometimes better.

  • After reviewing the Mind Map, what’s the most important financial goal you want to accomplish in the next year?
  • When you look at what’s coming in and what you plan to save, do you know where your money is going? It’s worth it periodically to add up what you spend so you can really think about what you value. You may find that saving more is possible when you think more about where your money is going now.
  • Is your giving intentional? Do you take time at least once a year to think about what causes or issues you care most about and direct your charitable contributions to worthy organizations that help make a difference? Would it be more meaningful to choose fewer organizations and make larger donations to each? Can you give time as well as money?
  • When you filled in the branches for the estate planning section, did anything jump out as needing a change? Perhaps someone you’ve listed has passed away. Or maybe there is another person you feel would be a better fit for your executor, guardian, or trustee.
  • Do you want to share this information with someone who could step in to help if something happens to you?
  • Do you have a sense of when you want to retire? How much will you be able to spend? If you love what you do and don’t plan to retire, have you thought how you might be able to phase into a part-time schedule, so you have more time to pursue some of those goals?
  • Do you have adequate insurance coverage? Are you at a place in life where you can decrease some insurance?
  • Do you see any investment accounts that could be consolidated to create more simplicity in your financial life?

As you look forward to a new year, your mind map’s goals should inspire you to act on the things most important to you. It should list the people you want to join you. And you may see a couple things you aren’t happy with that need to change.

Net Worth Statement

I know I’m a nerd, but I do love updating my Net Worth Statement periodically. It’s not the mechanics of doing it, that’s pretty boring. But how you interpret it gets interesting. Remember a Net Worth Statement is a snapshot in time and it’s interesting to look at it at year-end (or in the new year) to see what’s changed from the prior year.

Having enough assets in taxable accounts can offer financial freedom. Building retirement assets is important too, but that money is usually for a time far away from now. Financial freedom allows you to make bold choices. For example, you can leave a job that no longer fits and self-fund until you find the next exciting adventure.

Building equity in a home can also be inspiring over time. In addition to paying the mortgage, you may find opportunities to pay down larger amounts as bonuses or other windfalls come in. There is probably no other feeling as freeing as when you can pay off the mortgage entirely and not owe anything anymore on that property.

There are plenty of examples of Net Worth Statements on the internet, but here are the questions to ask yourself once you update the numbers.

  • Do you have enough liquidity? Too much? If you lost your job tomorrow, how long could you stay afloat?
  • Can you simplify your holdings by combining some accounts? There’s rarely a reason to have a bunch of old 401(k)s or IRAs all over the place. Consolidate and save time and perhaps money too. Your heirs will thank you too if they don’t have to deal with so many accounts.
  • Do you have more than 10% of your net worth tied up in any one individual stock? Is there any way to decrease that? Do you have a plan for addressing that over time?
  • Do you have too much in liabilities? Do you have a plan to reduce them as soon as you can? Do you need to spend some time thinking about what’s coming in and what you’re spending your money on now?
  • Is your estate large enough that you will owe federal or state estate tax? There may be legal steps you can take (especially before 2026 when the laws change) to help reduce tax burdens on heirs.

Personal finance is just that—personal. I’ve learned so much just by experiencing life in its many phases. I’ve made some huge changes in the past year, so a special word on making big life changes. You must really look at cash flows. You may think you know what should happen, but the logistics of setting up where money is coming from, and how you spend that, need extra attention in times of major change. It can be a humbling experience.


Completing your tax return can be a mad rush at the last minute and all you care about is that it’s done for another year. But if you can stand it, analyzing your tax return can be quite valuable. There is great software out there that can make this task almost effortless. The following questions are still worth asking when you are assessing your overall financial situation.

  • What marginal tax bracket will you be in this year? If you are in the 24% bracket or lower, consider whether a partial Roth RIA conversion may make sense.
  • Will modified adjusted gross income (AGI) be over $200,000 (single) or $250,000 (MFJ)? If so, you’ll have to pay a surtax (3.8%) on top of capital gains rates. You will  also hit a .9% Medicare surtax. Is there a way to reduce income by taking capital losses or deferring income?
  • What capital gains bracket will you be in this year?
  • If you are over age 70 ½, you can make charitable distributions from IRAs up to $100,000 per person per year. When you do that, this distribution is not taxed and will not increase AGI. Do you want to do that?
  • Do you have capital loss carry forwards? Do you want to reposition your taxable accounts and use capital gains from investment sales to net out any carry forward losses? You may be able to “reset the basis” using this technique.
  • Are your investments in non-retirement (“taxable”) accounts generating more taxable income than you’d like? Can you stop dividend reinvestment? Can you reposition to tax-managed or tax-exempt investments without triggering undue capital gains?
  • Where do you hold different types of investments? Are your income- producing investments primarily in your retirement accounts? Can you reposition across investment accounts to be more tax-efficient?
  • Do you want to match a larger charitable donation with a high-income year? If so, setting up a Donor Advised Fund for charitable purposes may help. You get a tax deduction for what you contribute and you can give away the money over a period of years to qualified charities.
  • If you are not over the Standard Deduction, you can “bunch” deductions by giving more in some years (enough to exceed the Standard Deduction) or by contributing to a Donor Advised Fund. Should you do that?
  • Did you have any non-deductible IRA contributions, Roth conversions or 401(k) rollovers with after-tax contributions? If so, don’t forget to file Form 8606 with your tax return.
  • If you rolled over one retirement plan into another, check to see that you are not being taxed on the transaction (assuming you followed the appropriate rules).

A word on taxable investment income for 2023: it could be MUCH higher than in the past. If so, you may not have paid enough estimated tax to cover what you’ll owe. Look at realized gains and year-to-date interest at your brokerage firms to see how it compares to last year. Increase your fourth quarter estimated tax payment if you need to.

Well, that’s more than enough for today. Happy year end. I hope you had a great year and many more to come!

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