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Money Moves to Make Before The Christmas Break


Money Moves to Make Before Christmas BreakI hope everyone had a great Thanksgiving and avoided overspending on the biggest shopping weekend of the year. We didn’t do much and put off the big Thanksgiving meal until Saturday. We were going to roast a chicken, but the downtown Safeway only stocked turkeys this week. I asked and the meat guy told me they didn’t have any chicken. Personally, I think they were just too busy to go grab one from the freezer for me. I can’t believe they didn’t have one whole chicken in the store. Well, a frozen one wouldn’t have worked anyway because it’d need time to defrost. Everything worked out, though. I got the roasted chicken from the deli department instead. It cost just $7.49. That’s cheaper than raw chicken ($10 to $12) and we spent less time cooking. That’s a win-win right there.

Anyway, I successfully avoided going shopping on Black Friday, but I did purchase a few things online. Mrs. RB40 on the other hand braved DSW (shoe store) and Target on Friday. That’s okay with me because she’s the one bringing home the bacon. She can go shopping if she wants to. The most successful member of our family this weekend was actually RB40Jr. Here is what he did.

  • Successfully avoided going out for 5 days!
  • Had 2 playdates. Kids came over and they had a ton of fun. They were ridiculously noisy, though.
  • Played too much videogames & board games, watched movies, read books, and lazed about.
  • Ate a lot of food. (Well, for him anyway.)
  • Completed the author box homework with some help from Mrs. RB40.

That’s what I call a successful Thanksgiving weekend. The kid gets it right once in a while.

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Year end to do list

Now that Thanksgiving is over, it’s time to finish up 2017 strong. The year is rapidly drawing to a close and we need to wrap up a few things before the Christmas holiday. We plan to drive down to California and see friends and families this year. I’m sure you’ll be just as busy as well. Here are some of the things we all need to finish up over the next few weeks.

Finish up New Year Resolutions

Oh yeah, those pesky New Year resolutions. Have you been keeping up or have you given up earlier this year. I’ve been keep track of my New Year goals on this blog and I’ve completed most of them. The key is to start a blog and share you goals. This makes you more accountable and it is fun to track your progress. Marketing aside, I think it really helped me because I never accomplished my New Year resolutions before I started blogging. If you have other method that works, then stick with that.

Anyway, it’s time to finish up those New Year goals and go out strong. For me, that means completing some yearlong goals such contributing to my 401k. I have a couple of goals left that I haven’t started yet. I’m going to give up on those and start fresh next year. Now, I know putting things off until the 4th quarter is a terrible idea. I have to start  these goals in Q1 or Q2. It’s possible to accomplish some goals in Q3, but summer is tough because Junior is out of school. Q4 is the worst, though. We usually go on our annual vacation in November and December is full of holidays. It’s pretty much impossible for me to start something new in Q4. Next year, I’ll plan to accomplish those goals early in the year.

Here is my goal tracking sheet from last month. I should be done with most of these soon. Check back next week to see my progress.

Goal tracking sheet

Finish contributing to tax advantaged accounts

Hopefully, you’ve been contributing to your tax advantaged accounts throughout the year. If so, then this last month should be very easy. You just need to make one more contribution to these accounts. Personally, I recommend maxing out your contributions every year. That’s how you build wealth over time. Here are the contribution limits to various tax advantaged accounts.

  • 401k: $18,000 each
  • IRA: $5,500 each
  • 529 College Savings Plan: Check with your state for the tax deduction benefit. Oregon lets us deduct up to $4,660 when we file state tax.
  • HSA: For 2017, a family can contribute up to $6,750.

These are the limits for people under 50. If you’re 50 or older, you could contribute even more. All these contributions will really help with taxes next April.

Check asset allocation

If you haven’t checked your asset allocation lately, then you probably should. The stock market has done very well this year and that might have messed up your asset allocation. The easiest way to do this is to check your Personal Capital account.

Asset allocation

I use Personal Capital to get a quick glance at my accounts because they’re not 100% accurate. Some of Mrs. RB40’s 401k didn’t get categorized correctly. I manually maintain an Excel spreadsheet and that’s where I get my full financial update every month.

Personally, I usually rebalance in our 401k plans. There are no fees to move investments around. That’s the easiest way to rebalance because everything is invested in index fund. Every plan is different so you will need to check the rules. Some plans will only let you rebalance twice per year, for example.

*Personal Capital is very useful for a quick view. If you don’t have an account yet, you should consider signing up for one through my link – Personal Capital.

Sell some stocks

As I mentioned above, the stock market has done very well this year. It’s time to sell some stocks and take profit. You’ll probably need to do this to bring your asset allocation back in line anyway. I’m trimming back some positions in our dividend portfolio and keeping the proceeds in cash for now. Once I find a good deal, I’ll consider buying some stocks. It’s tough right now because almost everything looks expensive. I’m leaning toward investing more in real estate crowdfunding. My investment with RealtyShares is doing pretty well.

Also, it’s a good time to sell some losers to offset those gains. You’ll pay less tax that way. I just sold Mattel and the loss will offset some gains.

Finish RMD

This one only applies in a few special cases. If you haven’t heard of the “required minimum distributions,” you probably don’t need to worry about it and just skip this section.

Basically, the IRS doesn’t want you to avoid paying tax forever so they will make you withdraw some money once you reach age 70 1/2. That’s RMD in a nut shell and it also applies if you inherit an IRA. The RMD withdrawal deadline is December 31st so you need to complete it before then. The penalty is very stiff at 50% of the difference between the amount you withdraw and the RMD so everyone needs to avoid that.

The RMD can become a big problem if you have too much money in your 401k and traditional IRA. There are ways to avoid it, though. I plan to start transferring some money from the 401k to my Roth IRA after Mrs. RB40 retires early. This is call building a Roth IRA ladder, check it out.

Wrapping up 2017 before Christmas

December is going to be extremely busy so we need to do all these things in the next few weeks. RB40Jr only has three weeks of school left and then he’ll be out for the winter break. Once he’s out of school, I won’t have much time to do anything. Luckily, I’ve been keeping up with my 401k contributions so that’s almost done. I still need to sell some stocks and move some money to bond or cash. Hopefully, I can finish that up soon.

All right, let’s get going and wrap up 2017! Do you have anything on your financial to do list for December?

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Joe started Retire by 40 in 2010 to figure out how to retire early. He spent 16 years working in computer design and enjoyed the technical work immensely. However, he hated the corporate BS. He left his engineering career behind to become a stay-at-home dad/blogger at 38. At Retire by 40, Joe focuses on financial independence, early retirement, investing, saving, and passive income.

For 2018, Joe plans to diversify his passive income by investing in US heartland real estate through RealtyShares. He has 3 rental units in Portland and he believes the local market is getting overpriced.

Joe highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help every investor analyze their portfolio and plan for retirement.
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{ 42 comments… add one }
  • Mr. Tako November 27, 2017, 12:30 am

    We didn’t go shopping this weekend, but we had a great time — we had a potluck Thanksgiving dinner with another family, and took the kids for a long walk. Couldn’t ask for anything better.

    I probably won’t be selling off any stocks before year end. We don’t have any losers this year, and with $50k in dividend income we’ll try to stay out of the higher tax brackets.

    Happy Holidays!

    • retirebyforty November 27, 2017, 9:08 am

      That’s great! I’m glad you enjoyed Thanksgiving. We had fun too, but it was more low key. RB40Jr loved having friends over.
      I have a few losers. Mattel, Target, Walmart,… I only sold Mattel so far, though. I think Target and Walmart will be fine.

  • GYM November 27, 2017, 1:16 am

    I love the roasted chickens! They are so good (well especially the skin mmm).

    Good reminder to check asset allocation 🙂 it might be overkill but I do it quarterly now.

    I was unsuccessful with Black Friday and ended up buying stuff… Nordstrom Rack is just too tempting.

    • retirebyforty November 27, 2017, 9:09 am

      I’m overdoing it a bit too. I check every month, but that’s because I know it isn’t on target. I still need to move some money from stock to bond. Stock seems way overpriced, but the gain is so addicting. I’m glad I didn’t go out shopping last weekend. 🙂

  • VLT November 27, 2017, 1:25 am

    I really appreciate your website and advice. My wife and I live overseas but purchase Health Insurance in the US just in case. The country we live in cannot be relied upon for good health care. Do you recommend that we purchase a health plan with an HSA plan? Any downsides? We rarely use the health system since my wife is a doctor so we most likely would never touch the funds we contribute.

    • retirebyforty November 27, 2017, 9:12 am

      I think it’s a good idea to go with the high deductible plan with HSA. Since you don’t use it right now, the high deductible will keep the monthly cost low. HSA will come in handy in the future. You’ll get old someday and will need healthcare, even if you’re a doctor. You can cash out the HSA if you never use it. There will be a penalty, though. You can also pass on the HSA as part of an inheritance.

  • Ms99to1percent November 27, 2017, 2:29 am

    Contributing to the college fund and sending some money to the mortgage are what’s left for us to do.

    Thanks for the reminder ?.

    • retirebyforty November 27, 2017, 9:13 am

      I just finished contributing to the 529 account. It’s helpful for us because our state tax is so high.

  • Lily @ The Frugal Gene November 27, 2017, 2:50 am

    The only thing on our end of the year to do is taxes. I mentioned we were going to do that over Thanksgiving…yeah didn’t happen. Hopefully by end of December… Jared handles the rebalancing every year. We’re still too heavily weighted in tech so it’s time to cut some more loose.

    I successfully avoided Black Friday but Cyber Monday…well time will tell…I almost went to DSW on Black Friday too but I previewed some deals online and I found comps similar on Amazon. DSW is good for point earners. They’re generous with repeated customer by coughing out coupons.

    (This is so weird but after I read this post, a loud McDonald’s hamburger craving just hit me…what in the world was the trigger word?? Chicken? Winter break? Roth ladder??)

    • retirebyforty November 27, 2017, 9:14 am

      Ugh.. Taxes. I need to do our taxes early next year, February at the latest. It’s too hard to do it now because I don’t have all the tax paperwork. Good luck…
      Funny note about McDonald. Maybe you’re just hungry. 🙂

  • [email protected] November 27, 2017, 3:53 am

    Nice list Joe. I don’t think any stock selling or buying will help but I’ll give it one more check. My investments are pretty automated.

    My retirement accounts are already maxed out or on target to be.

    I do need document 2018 goals. That will be a project for this week!

    I think this sentence should read “50” right? “If you’re 55 or older, you could contribute even more.”

    • retirebyforty November 27, 2017, 9:17 am

      Great job with your retirement accounts. I’ll work on my 2018 goals during Christmas. It will be interesting because I’ll try something different next year. Stay tune!
      Thanks for the catch. I just fixed it.

  • Tom @ Dividends Diversify November 27, 2017, 4:11 am

    Hi Joe, I know from prior posts Pinterest is not your favorite thing, but I was wondering about your goal regarding Pinterest. What does “25,000 sessions” mean? I started my blog this year (you have been a great inspiration by the way) and have been working on Pinterest to build traffic. Tom

    • retirebyforty November 27, 2017, 9:18 am

      I believe one session is a unique user per day. Have you signed up for Google Analytic? It’s very helpful (and addicting when you’re starting out.) Good luck!

      • Tom @ Dividends Diversify November 28, 2017, 5:06 am

        Thanks Joe. I went back to your earlier posts where you explain your Pinterest goal and better understand now. Oh yes. I watch the analytics. It is addicting for a newbie like me. Tom

  • Mr Crazy Kicks November 27, 2017, 4:46 am

    Sounds like a good Thanksgiving break! We were flying back from Belize on Thanksgiving day – it’s always cheaper to fly then.

    We also stayed in from shopping on Friday and relaxed. Then Saturday we picked up a 14lb free range organic turkey on sale for $8, and enjoyed Thanksgiving dinner on Sunday. It pays to be on a different schedule 🙂

    • retirebyforty November 27, 2017, 9:19 am

      I love flying on Thanksgiving too. The airport is so empty.
      Wow, turkey for $8. I need to try that next year. I hope it wasn’t frozen, though.

  • Ms. Frugal Asian Finance November 27, 2017, 4:50 am

    I can feel the festivity on your blog. I can’t believe Christmas is around the corner. Days off woot woot!!

    Congrats on having accomplished most of your big goals this year. I think you are well on track to finishing up a successful year. Mr. FAF and I started maxing out our 401k this year too. We are catching up ^.^

    • retirebyforty November 27, 2017, 9:20 am

      I’m not a huge fan of Christmas. Sorry to be a Scrooge. 🙂 It’s a lot of headache especially when RB40Jr is off for 2 weeks with nothing to do. It’s too rainy to do much outdoor stuff. Great job with your retirement accounts. Keep at it.

  • Apathy Ends November 27, 2017, 5:05 am

    I started finishing our basement and my progress has fallen off a STEEP cliff. Need to get back at it!

    I bought one piece of Ice Fishing equipment that was 55% off – was going to buy anyway so it was a win for me

    • retirebyforty November 27, 2017, 9:22 am

      Let me know when you’re done. We need to refinish our basement at the rental too. It sounds like a ton of work that I don’t know how to do. We’ll probably have to farm out a lot of it.
      Ice fishing… Sounds cold. 🙂 Have fun!

  • The Grounded Engineer November 27, 2017, 5:09 am

    I hope the balance of the year treats you and your family well, Joe!

    Last year we rolled my wife’s Traditional IRA from American Funds (very high cost) to Vanguard. This year we are rolling her Roth over and I plan to do that in the next two weeks, as well as max it out!

    • retirebyforty November 27, 2017, 9:23 am

      I rolled over my wife’s old IRA to Vanguard as well. It’s great to have everything there.

  • adumbby November 27, 2017, 5:27 am

    Is it ok to leave a comment if I don’t have a blog too?

    • retirebyforty November 27, 2017, 9:23 am

      Yes, please leave a comment. I find that bloggers are much more motivated to leave comments. I’d love to hear more from non-bloggers.

  • Helen @ Retire Early Helen November 27, 2017, 5:56 am

    I had a good Thanksgiving. We invited a couple of friends over, ate Turkey, pie and other good stuff, and watched the game a little bit. On Black Friday, I stayed away from the crowds.
    New Year Resolutions? Hey, I forgot about it, got to find out what I promised myself 11 months ago. Thanks for the reminder.

    • retirebyforty November 27, 2017, 9:24 am

      Put the New Year resolutions on your blog and update it every month. That’s the only way I can keep track of them. 🙂

  • Mrs. Groovy November 27, 2017, 6:04 am

    On blog income, savings, and dividends alone you’re killing it! Congratulations.

    We did our tax loss harvesting, too. We still need to do our verification for Obamacare. We have until Feb 1 (why Feb 1 if they prefer 1099s) but that’s the government for you. They keep sending us reminder documentation so we may as well get it done. We also have a rollover we may as well get done too. For some strange reason (we’re not questioning it) Mr. G’s employer deposited $400+ in his 401K more than 6 months after he retired. It must have been owed from his last paycheck on his vacation pay.

    FYI, our net worth increase is almost on par with our 2016 increase, without working. Mr. G’s lithium stock has a lot to do with it though.

    • retirebyforty November 27, 2017, 9:25 am

      Thanks! We’ve had a great year. Hopefully, we can keep the momentum going next year.
      Wow, good news about the 401k. That’s pretty neat.

  • Mr. Groovy November 27, 2017, 6:15 am

    You’re an inspiration, Joe. Thanks for the end-of-the-year-do-list reminder and an update on your New Year’s resolutions. As Mrs. G so eloquently stated, you’re “killing it.”

  • David Michael November 27, 2017, 10:30 am

    Wow Joe. You are doing it! Congratulations. And, thanks for detailing how you are accomplishing your goals. I wish that we had more of this before the internet was born. I, for one, was always suspicious of firms like Merrill Lynch. I remember dealing with a broker who refused to give me a copy of his resume even though he wanted me to hand over my life savings. Transparency is not a word recognized in the financial industry. So, a question…how do you make money on Pinterest? Over $12,000 this year. Yikes!

    • retirebyforty November 27, 2017, 12:56 pm

      It’s too bad about transparency. That’s why I don’t trust a financial adviser and why we need the fiduciary rule.
      The Pinterest number is just the visitor from Pinterest. I wish we could make $12,000 from Pinterest.

  • Felipe November 27, 2017, 11:59 am

    My Safeway actually had goose and Peking Duck. Frozen, but for a town of 2,500 I was completely amazed they were there. I’m going to try a goose for sure.
    I read the tax reform, if passed, has something about not letting you sell specific shares of stock to minimize the tax bite. I think it makes you sell the oldest shares first, or something like that, reducing flexibility. If passed, that will certainly change my end-of-year balance techniques. I still have losses I use from stocks purchased in the late 1990’s to offset gains the mutual funds assess end of year. Maybe I’m almost out of those anyway, so either way my goose will be cooked.

    • retirebyforty November 27, 2017, 12:59 pm

      Oh wow, that’s a neat Safeway. Our downtown Safeway isn’t that great. It’s small and doesn’t stock everything. It is the closest grocery store, though.
      I’m not too happy about the tax reform so far. We’ll benefit, but I don’t like the deficit. I’m pretty sure it will balloon.

  • [email protected] November 27, 2017, 12:01 pm

    Great list Joe. I have to check my asset allocation and have a bit of cash to purchase more ETFs before the end of the year but that’s all fun stuff. You have had a fantastic year, 2018 should be even better.

    • retirebyforty November 27, 2017, 1:00 pm

      I just don’t trust the stock market these days. We already have too much stock so I’ll need to rebalance very soon.

  • Revanche @ A Gai Shan Life November 27, 2017, 1:58 pm

    Great minds think alike! I’m sharing my Money Moves weekly until the end of the year to keep myself on track 🙂

    We only shopped online to buy things we’ve been needing all year (some electronics, a mandatory Christmas gift exchange). We went outside a lot but I regretted that way more than the spending, I was messed up for two days from running with the dog and hiking with the family. Whoops.

    I’m trying to decide if I sell off GE to offset some gains from the stocks we sold earlier this year. I don’t think they’re going to make it back from a 40% drop any time soon, right?

    RMD – what did I miss, why are you already subject to it?

  • Nick November 27, 2017, 2:35 pm

    Nice job on the goals, Joe!

    What’s holding you back with the redesign?

    Just curious 🙂

    Thanks for the update and “to-do” reminder!

  • Kris November 27, 2017, 3:00 pm

    I usually re-balance my portfolio in January but doing it in December does not seem to be a bad idea too.
    I did not any Black Friday shopping but let my wife buy some items this past weekend. She got a FitBit and some clothes for our little one.

  • Steve @ familyonfire.org November 27, 2017, 7:15 pm

    Good list. We have an RMD coming from an inherited IRA in December but that is automated so we shouldn’t have to do anything.

    Main thing for us is finishing up the ACA application. We have picked a plan but need to be contacted to pay the first month.

  • Laura November 27, 2017, 9:47 pm

    Sounds like a good Thanksgiving! I’ll have to double-check our year-end list. Rebalancing is on hold until February as DH’s 401k is getting moved to another provider, so blackout from late Dec to mid Feb (why so long?). Anyhow, will have *much* better options and have scheduled rebalancing for then.

  • Maximum Cents November 28, 2017, 4:17 am

    Thanks for the reminder about doing some tax loss harvesting. The market has had a really good year so it will be tough to choose which stocks to trim. Last year I sold some Disney but it ended up being around the bottom.

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