All Things Financial Planning Blog

Nine Candles or Twelve Days Of

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Whatever Holiday you and your family celebrate this time of year we at the Financial Planning Association wish you a joyous Holiday Season. For those still working through community storm damage or personal situations that life always seems to bring our way we hope that the proverbial ‘light at the end of the tunnel’ will see your delighted emergence soon.

‘Year End Financial Planning Presents for You’
Here are some for you to unwrap and enjoy.

  • Gifting. As we think about gifting to our local place of worship, our alma mater, or to a cause we support, are we optimizing our gift to charity? Giving cash allows us a tax deduction but giving appreciated stock of the same value gives us the same tax deduction (for the most part) that giving the cash did but we also might avoid the capital gains taxation. So in general, it is better to give gifts of appreciated property when we are thinking of gifting.

We can gift $5,120,000 in 2012 without paying gift taxes even though we would have to file a gift tax return to claim the $5.12M gift tax exclusion. For those capable and for whom the transfer is appropriate, this is an unprecedented wealth transfer opportunity that will sunset December 31st of this year. Alternatively, we can gift $13,000 per individual in 2012 without having to pay a gift tax or having to file a gift tax return. Learn more about Charitable Contributions at

  • Investment Tax Management. As the year closes, as we always do, we should look over our portfolio to see if there are any tax losses or tax gains that would be appropriate to recognize before the year end. This year end is particularly important given the potential change in capital gains taxes and the health care taxes on investment income that are coming. It might be appropriate to recognize a gain this year even though your intent is to hold the asset for more than a short term period. As always, never let the tax tail wag the investment dog, run the numbers to see what the appropriate strategy is for you. Learn more about Investment Income and Expenses at
  • Retirement Tax Management. If it would benefit you, the last day to set up a 401k plan for your business activity is December 31st. You can fund the amount by the tax due date, plus extensions, but it must be set up by the December 31st deadline. If it would benefit you, December 31st is the last day that a defined benefit plan can be established. It has the same funding time requirements as the 401k. You can still establish an IRA up to April 15th (or tax due day if different) but it has to be funded by the due date.

Converting a Traditional IRA to a Roth IRA before December 31st might be considered. A few of many factors to consider are:

    • the tax hit you take today to get the tax free (under current law) benefit you are paid later and will you be better off and
    • where will those taxes be paid from today to make the conversion – from the IRA or from ‘outside’ assets like your personal savings account.

Learn more about Retirement Plans for Small Business at

  • Estate Planning. Take a moment to review your beneficiary designations on your retirement accounts, annuities, life insurance contracts, or any other beneficiary ‘capable’ asset to see if your testamentary intentions are still the same. If you haven’t had your living trust or estate plan reviewed in a while you may want to make sure they still have legal effect and that Advanced Directives are HIPAA compliant. Stay tuned to what our legislators have in mind with respect to estate taxation when a tax agreement comes about. Estate tax laws revert to prior law unless Congress takes affirmative action. That would mean, again, barring action that estates in excess of $1 million would be subject to a 55% tax rate next year (35% top rate in 2012). Learn more about Estate and Gift Taxes at
  • Wealth Management. My fellow FPA blogger, Mary Beth Storjohann, provides us a great blog on her thoughts on Holiday spending ( We are so tempted by the spirit of the Season to indulge ourselves and why not! We should be able to enjoy the spoils of our labors with some indulgences but we do need to be financially prudent. I know for me, just the time with family, or the gift of a ‘mini’ weekend vacation with all of us together, is, as the advertisement says, priceless. What would that ‘priceless’ gift be for you? I hope it is in the gifts to you this year!

Have a wonderful Holiday Season and a fabulous New Year!

David Bergmann, CFP®, EA, CLU, ChFC
Managing Principal
The David Bergmann Group
Marina Del Ray, CA

Author: David Bergmann, CFP®

ACADEMIA David has been an instructor in UCLA’s CFP Board Accredited Personal Financial Planning Certificate Program since 1995 and he is a member of the Program’s Academic Review Committee. David has taught both the Financial Analysis and Employee Benefits/Retirement Plan courses and regularly teaches the Federal Income Taxation in PFP class. He is also the instructor for the Ethics course and oversees the internship program. PROFESSIONAL CONTRIBUTIONS David has served as an editorial reviewer for the Journal of Financial Planning since the magazines inception. He has been a reviewer for the FPA’s Financial Planning Perspectives publications and other various National publications. David served from 1988 through 1990 as President of the Los Angeles Society of the Institute of Certified Financial Planners (ICFP). He also served on the National Board of the ICFP from 1988 through 1993 having chaired The Education, The Communications, The Regional Directors and The Case Law Oversight Committees as well as serving a year on the Executive Committee. David has been a mentor and since 2006 has been a Dean in the nationally recognized FPA’s Residency Program. PROFESSIONAL ACTIVITIES The David R. Bergmann Group is a comprehensive services firm supporting the work the firm does in, and with the process of, comprehensive Life Financial Planning. In our life financial planning process we focus on the client’s life goals and individual passions in the context of what brings joy, purpose, fulfillment and sense of valued legacy and then we structure their financial affairs and personal resources to enable, inspire and empower them to live their impassioned and fulfilled life. David was twice named as one of the Top 100 Financial Advisors in the country by Mutual Fund Magazine. He has appeared on CBS Nightly News and in many National print publications, including the Wall Street Journal, Investor’s Business Daily, Business Week, and others.

One thought on “Nine Candles or Twelve Days Of

  1. I completely agree that quality time together as a family is the best present of all. I think this becomes more and more important the older I get. Thanks for a helpful and useful post.

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