Summer has a way of reminding us to slow down a bit. While vacations and backyard cookouts take center stage, it’s often the perfect time to step back and make sure the bigger picture is still on track. That’s exactly how we think about financial planning—making small, thoughtful adjustments along the way so there are fewer surprises later.
While there are still two more weeks until the season officially switches to fall, I wanted to share an idea that can have a meaningful impact before the year gets away from us …
Summer Is the Best Time to Start Year-End Yax Planning
Most people think tax planning begins in November. In reality, the most valuable planning opportunities often begin months earlier. By the time December arrives, many financial decisions have already been made. Income has been earned, stock has vested, bonuses are becoming clearer, and there is little time to make meaningful adjustments. Starting the conversation during the summer provides more flexibility and often leads to better outcomes.
Here are a few planning opportunities we commonly begin evaluating this time of year:
- Roth Conversions: If this year’s taxable income is expected to be lower than normal, it may be an ideal opportunity to convert a portion of a traditional IRA to a Roth IRA while remaining within a favorable tax bracket.
- Executive Compensation: For clients with RSUs, stock options, or ESPPs, we review upcoming vesting schedules and consider how those events may affect taxes, diversification, and cash flow before year-end.
- Charitable Giving: Rather than waiting until December, now is a good time to determine whether donating appreciated securities or using a Qualified Charitable Distribution may be more tax-efficient than writing a check.
- Capital Gains Management: Selling appreciated investments should rarely happen without understanding the tax consequences. Reviewing gains and losses now provides time to harvest losses when appropriate and coordinate sales strategically.
- Retirement Contributions: Many high-income professionals have flexibility in how much they contribute to retirement plans. Mid-year is an excellent time to verify that contribution elections remain aligned with your goals and projected income.
The common theme is simple: the earlier we begin planning, the more options we typically have. Tax planning works best when it becomes part of the entire year’s financial strategy rather than a year-end exercise. If you think your income, investments, or life circumstances may look different this year, we’d be happy to review your situation together before the calendar begins to close.
Perennial Edge Tip:
Review your beneficiary designations every 3 to 5 years.
Many estate plans fail to work as intended because retirement accounts and insurance policies still list outdated beneficiaries. A 5-minute review today can help prevent unnecessary complications for your family in the future. Of note, all Perennial Edge account beneficiaries are reviewed annually to help ensure your wishes are followed. Beneficiary designations supersede anything written in the will, an often-forgotten government rule.
