I've said it a million times and I'm sure you'll hear me say it plenty more: One of the best things about working in the Pharma industry is the benefits.
There are tons of awesome Stock and Retirement benefits throughout in this field of work. Many of which can be tough to come by in other industries.
And in a lot of instances what you you do with those benefits in the 4th Quarter of the year could have a pretty big affect for both this year and the next.
Benefit Elections
The 4th Quarter of the year is a huge time for electing what benefits you'll actually get next year.
Things like Deferred Compensation Plans, Life Insurance Benefits, and the type of Stock Incentives you receive throughout the year are areas you may need to make a decision in.
Often times these elections need to be made by a specific date and if you miss the cut-off it can mean you're missing out or getting something by default.
Unsurprisingly a lot of these decisions fall into the October/November time frame. Meaning you might have to make some decisions pretty soon.
Instead of waiting until the last minute start researching your options now so you can plan your elections ahead of time and be ready when decisions need to be made.
Tax Planning
Yes April 15th is still 6+ months away but that doesn't mean that you can't make decisions now that will help with your tax situation.
After most decisions for this tax year will have to be made by December 31st and depending on the situation these last 3 months could be crucial for making a difference.
Now is a good time to look at the investment and retirement benefits you've been using and see if there's any changes you should make before year's end.
Take a look at your expected income and tax bracket for this year.
If it's less than last year maybe you can take advantage of that.
- Do you have Capital Gains that you want to realize but normally would avoid?
- Maybe you have Stock Options you'll have to exercise next year that would be better to exercise now?
- Perhaps a partial Roth Conversion make sense?
On the other hand if your estimated income and tax bracket is higher is there anything you can do to decrease it?
- Have you maxed out your 401(k) contributions?
- If you have can you direct extra savings to an after-tax 401(k) or Deferred Comp plan?
- Do you have any investments where you can utilize tax loss harvesting?
- Do you qualify for a tax deductible IRA contribution?
Planning Season
So before we all get bogged down in holiday season and you're too busy to think about your financial planning set some time aside to look at what your work benefits have done for you this year and see if any changes would be helpful for next year.
Take a look at your potential tax situation and take steps now to make it easier for you come April.
And if you'd really prefer some help sorting out the details...
Schedule a call with me.
It's quick, easy, and can make all the difference in your future.
LPL Financial does not provide tax advice. Clients should consult with their personal tax advisors regarding the tax consequences of investing.