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Four financial moves to make before Jan. 1
The end of the year is fast approaching, and it’s around this time that many people begin to think about New Year’s resolutions. While the most popular resolutions typically revolve around health and lifestyle goals, Nielsen found that one-quarter of people say they want to focus on better financial management in the year to come. While the clock is ticking, there is still time to make some positive money moves before 2017 rolls around.
These tips may give you a place to start, but before pursuing any financial plan, it’s good to check in with a professional to see what works best for your particular financial situation.
Contribute to retirement
If you don’t have a retirement account of any kind, now is the perfect time to make one. Why? Because the sooner you begin saving for retirement, the more you’ll be able to save.
Different types of retirement accounts have different rules about how much you can contribute each year. They also differ in terms of the last day you can put money in and still claim deductions on your 2016 taxes:
• Traditional or Roth IRA: You have until April 17, 2017, to contribute up to $5,500 if you’re younger than 50 years old, or $6,500 if you’re 50 or older.
• Employer sponsored 401(k): You have until Dec. 31, 2016, to contribute up to $18,000. Keep in mind, this total includes both your contributions and your employer match.
Check to see how much you’ve contributed so far this year. If you can afford to max these out, do so.
Start saving for college
A 529 college savings plan is a great financial tool that can help your children or other family members pay for school later on, plus you’ll get tax benefits for making contributions now. Just be aware of how much you’re putting in; if you give any one beneficiary more than $14,000 throughout the year through this plan plus any other gifts, there could be tax consequences.
Go to the doctor
While scheduling a doctor’s appointment might not seem like a money move at first glance, there could actually be some financial benefits to it — as well as health advantages, too. If you’ve already met your health insurance deductible, take advantage of the final few weeks of the year to get something checked out that you might have shrugged off before. If a minor pain turns into something major after the new year, it’ll be more expensive to get it looked at.
If your health insurance plan is complimented by a Flexible Savings Account, go ahead and spend that money before it disappears Jan. 1. Double check whether your employer has a grace period to use that money after the new year. If so, you may be able to get away with putting off appointments until January or February, but getting them scheduled can only help.
Get ready for tax season
Your W-2s should arrive sometime in January, and you have a little more than two months to file your taxes. If last year’s tax season seemed like a mad dash to find all of the necessary paperwork, get ready now by creating an organization system. When your W-2s and other documents come in, file them accordingly.
It’s easy to put off financial tasks until the new year, but getting these things taken care of sooner rather than later will benefit you come tax season, and also let you cross a few things off your to-do list.