Why not spend some time now, while the year is young, taking the steps that will bring you closer to your financial goals for 2018 and beyond? Kiplinger has some great pointers to share in the recent article, “12 Smart Financial Moves for the New Year.”
1. Increase your retirement-savings contributions. If you’ve been maxing out your 401(k) or are turning 50 this year, up your automatic contributions to take advantage of higher limits and catch-up opportunities. You should also set up automatic monthly contributions from your bank account or paycheck into an IRA. This will allow you to save before you have an opportunity to spend it.
2. Make a charitable-giving plan. When you earmark funds for charity, think of the ways you can contribute—by writing a check, giving appreciated securities, giving to a donor-advised fund, or making a tax-free transfer from your IRA (if you’re older than 70½). Ask your estate planning attorney how the new tax law may impact your charitable-giving strategies.
3. Make the most of the new tax law. Speaking of the new tax law changes, look at how it may affect your charitable giving, IRA conversions, home-equity loans, medical-expense deductions and 529 college-savings accounts. There are some key financial strategy changes. Speak with your estate planning attorney to learn if there are new opportunities for your estate plan. Don’t miss out!
4. Plan for your RMDs. If you’re already older than 70½, or if you’re reaching that milestone in 2018, start planning for your required minimum distributions (RMDs). Determine from which IRAs, 401(k)s, or other accounts you’ll need to take money from and consider which investments from which you would like to draw. You may also want to investigate making a tax-free transfer of your RMD to charity, which will become more common now that fewer people will be itemizing under the new tax law.
5. Make some Medicare decisions. If you’re going to be 65 this year, start thinking about Medicare. If you don’t have health insurance through a current employer (or a spouse’s current employer), then you’ll need to enroll within the three months before the month you turn 65 and the three months after that. If you’re still working and have health insurance through your employer (or if you’re covered by your spouse’s employer), you may not need to sign up just yet. However, be very careful to avoid paying a late-enrollment penalty or missing out on important coverage. You should also plan how you are going to fill in the gaps in Medicare—like with a Medicare supplement policy and Part D prescription-drug
Most importantly, as you strive to set yourself up for success, make sure you contact those on your professional team, like your estate planning attorney and financial planner, to make sure you are on the right track.
For more information on how Family Estate Law Planning Group can help you with your plan to get closer to your financial goals for 2018 and beyond, visit our website and today to schedule your consultation!
Reference: Kiplinger (January 5, 2018) “12 Smart Financial Moves for the New Year”