As 2009 comes to end, I find myself letting the year go with a sigh of relief.  Almost everyone I talk to has said this has been one of the most difficult years not just financially, but also emotionally.  What about you?

Let’s take a moment right now before we get swept into the flurry of parties, events, shoppping and festivities to make sure we start out 2010 on the right track.  Here are my top 5 financial planning tips.  I suggest that you get out your planner and schedule time for yourself to implement these…and here they are:

1)  Meet with your financial planner and or CPA to review your investments for any year tax planning opportunities.    If you own stocks or mutual funds, you and your advisor can determine if it’s appropriate to generate tax losses by selling specific securities to offset year end capital gains.  Even if you would like to continue to own a security long term, your advisor may recommend selling the security to offset taxible gains and then purchase that same security back after 30 days.

2)  Reveiw your asset allocation percentages for the appropriate mix of stocks, bonds, cash, commodities and real estate.   We all are aware of the importance of proper “asset allocation” to reduce risk in your portfolio.  Well now is is also the perfect time to also ask your financial advisor to run an asset allocation analysis to review the performance of your portfolio, (the risk you are taking vs. the return you have received) and to see if your portfolio is in line with your future goals and values. 

When I was with Ameriprise Financial, my partner and I would run an analysis using Morningstar software which gave us and our clients very objective information so we could manage both risk and reward during our client meetings.

3)  Begin gathering and preparing all your importnat tax and financial documents that you will need for filing your taxes in 2010.   Create a file that you can begin to place copies of all your year end donations as well as all the year end financial and tax statement that will begin arriving in the mail very soon.  This way you won’t lose any deductions or need to spend time later looking for important tax information.

4)  Consider maximizing any contributions to your IRAs, Roth IRAs, SEP IRAs and other employer deferred savings plans before year end.  You want to do this for two reasons:  first, contributions will be deducted from your taxable income for 2009, plus you’ll want to save as much as possible towards your retirement goals. 

5)  Lastly, ask your financial or tax advisor if it would make sense for you to roll your traditional IRA into a Roth IRA.  Roby Sawyers, CPA, Ph.D., an accounting professor at North Carolina State University suggests, ”Put your retirement money in Roth IRAs and Roth 401(k) plans.  With the huge deficits facing the country, it is hard to see how tax rates are going to do anything but increase in the future.”  Contributions to Roth IRAs are not deductible and grow tax free.

There is a second reason to take another look at the Roth IRA.  In the past, many individuals were unable to roll their IRAs to a Roth IRA because of income restrictions (they earn too much income), but in 2010, that all changing.   Be sure to sign up for my updates as I continue to share smart financial, business and life planning tips with you every few days.

Although this is a challenging economy, with the right plan you can make it work for you! 

Ask your questions right here, and I will be sure to answer them for you!  Remember, I am Certified Financial Planner with over 20 years experience helping people live with Purpose, Passion and Proserity!