The holiday season is around the corner, and with the busy days ahead, 2018 will be here before you know it. Amidst all the action, we understand how easy it is to wait until the New Year to consider financial changes. But taking a few steps now could help you reduce your tax liabilities and start January on a stronger financial foot.
A flexible spending account (FSA) can make paying for healthcare more cost efficient, but the funds typically have a set shelf life. If you have an FSA, you probably are unable to carry over any remaining balance to 2018. Verify the deadline for using the funds in your account, and make sure you spend them in time. From new eye-wear to dental procedures, consider what healthcare expenses you might have and use your FSA money before your annual deadline.
- 401(k) - The most you can contribute to your 401(k) , 403(b) or 457(b) in 2017 is $18,000, and you have until December 31 to do so.
- IRA - The maximum IRA contribution for 2017 is $5,500, and $6,500 if age 50 or older, though there are some limits depending on your income. And while you have until April 15 of next year to make those contributions, it's a good idea to at least have a plan in place now.
- HSA - Don't forget about a health savings account, which is quite possibly the best investment account around! A family can contribute up to $6,750 for 2017 while an individual can contribute up to $3,400.
- If you're self-employed or even freelancing on the side, think about opening a retirement account through your business. That extra savings can be really powerful. For more information, follow this link to our website about Retirement and Tax Planning for Small Business Owners.
- 401(k), 403(b) or 457(b) Employer Plans
- 2018 annual max: $18,500
- Monthly: $1,541.67
- Per paycheck (26 paychecks): $711.54
- Per paycheck (24 paychecks): $770.83
- Age 50+ per paycheck is $942.30
- Traditional or Roth IRA
- 2018 annual max: $5,500
- Monthly: $458.33
- Per paycheck (26 paychecks): $211.54
- Per paycheck (24 paychecks): $229.17
- Health Savings Account
- 2018 annual max: $3,450 individual / $6,900 family
- Monthly: $287.50 / $575.00
- Per paycheck (26 paychecks): $132.69 / $265.38
- Per paycheck (24 paychecks): $143.75 / $287.50
Closely monitoring your credit report is more important than ever. In today's online world, identity theft can happen at any time. And the recent data breach at Equifax, which compromised the personal information of 143 million Americans, serves as an alarming reminder. Every year, you should check reports from all 3 credit agencies - Equifax, Experian, and TransUnion - to look for any activity you do not recognize.
- If you have children, determine how much you'll need to save for future college expenses. If your'e a Maine resident, take advantage of the full NextGen College Savings 529 account match. Click here for more information on the NextGen 529 annual college savings grants.
- If you are caring for elderly parents, investigate whether long-term care insurance or life insurance can help.
- Purchase or review your life and disability insurance for yourself and your spouse.
- Start to plan how you and your spouse will time your retirement, including your Social Security claiming strategy.
- Review your beneficiaries and estate plan. The same changes that would trigger a review of life insurance should trigger a review of your will and other estate planning documents. This is simply to make sure that your family will always be cared for in the way you want.