January is the perfect time to get your financial act together, by adding a financial checkup to your list of to-dos. Following are a few things you can do now to keep your finances on a good financial note all year!
Review your retirement portfolio
If your financial goals and objectives have changed, it may be time to rebalance your investments to make sure they’re still right for you. If you can spare even a little extra money from your paycheck, increase your contributions to your employer-sponsored retirement plan. One day, you likely won’t be getting a paycheck. So you’ll need to put money away now so you can still have income to live off of later.
Make a contribution
If you haven’t yet contributed to a Traditional Individual Retirement Account (IRA) this year, and you have earned income, contribute now. Depending on your income limit and filing status, contributions may be tax deferred. If you aren’t eligible to deduct a traditional IRA contribution from your income taxes, make the contribution anyhow! The earnings will still grow tax-deferred.
Consider a Roth IRA
Sure, you have to fund your Roth IRA with after-tax dollars, but you’ll also have more flexibility when you want to start making withdrawals. You might consider converting part or all of your Traditional IRA to a Roth IRA. If you meet the criteria to do so, you’ll have to pay ordinary income tax today on the portion you convert, but all future earnings will be tax-free.
Put money away for your children’s education
There are lots of options here. Open a 529 savings plan, a Coverdell Education Savings Account, a uniform gift/transfer to minors account, or a mutual fund account earmarked for education. The earlier you start saving, the more you’ll have when you’re ready to pay for education costs.
Evaluate your financial advisor
Do you hear from your advisor regularly to review your financial situation and/or investments? Or, are you without financial professional who can help you make decisions about all of the aforementioned tactics? If the answer to either of these questions is “no,” or if you need help with any of these strategies, contact a financial professional today.
Contact your bank or Credit Union for help with getting ready for a financially healthy new year.
Article provided by Local Government Federal Credit Union.
The advice provided is for informational purposes only.