Financial Planning for the Year Ahead
- Details
- Written by Remar Sutton
- Category: Articles
Tips for wrapping up this year and getting a jump start on the next.
The end of the year is fast approaching and many people are thinking of things other than finances. Yet, taking some time now to review your financial plan for this year and next may save you time and money later.
Taking some time now to review your financial plan for this year and next may save you time and money later.
Savings Tips
Do you know that you can have multiple savings accounts? In addition to your general savings account you can use other accounts for specific purposes such as saving for holiday spending, travel, a new vehicle or a home. By using a separate account, you can easily see progress toward your saving goal. Make deposits into the account periodically or have a specific amount transferred automatically every week or month. Specially designated holiday or travel accounts may have withdrawal and other restrictions.
Meritrust CU offers Christmas Club and Vacation Club savings accounts. The funds will be automatically transferred into your checking or savings account on November 1st for Christmas Club and June 1st for Vacation Club. You will pay a penalty if you make any withdrawals before the funding date.
College Financial Aid
Do you have kids in college or starting college in 2018? You can submit the FAFSA for the 2018-2019 school year now. Submitting it sooner can be better because some financial aid is awarded on a first-come, first served basis and funds are limited.
Healthcare Tips
The fall is the time of the year to review your healthcare coverage for the next year. Now is the time to determine what changes you should make for next year. You can usually make changes to employer provided healthcare benefits during the open enrollment period offered toward the end of the year. Open enrollment for insurance obtained through the Affordable Care Act is much shorter this year and runs from November 1 to December 15th. Open enrollment for Medicare runs from October 15 to December 7.
If you have a Health Flexible Spending Account (FSA), you should spend the balance in the account before the end of the year or you will lose it. Your account may allow a carryover of up to $500 for next year. Review your expenses for this year and determine if you need to change your contribution for next year.
Retirement Savings Tips
Are you contributing the maximum to your 401(k) or other tax-advantaged retirement plan? If not, consider increasing your contributions for this year and next. The contribution limit for 2017 is $18,000 and increases to $18,500 in 2018. Those age 50 and over can contribute another $6,000.
Tax Tips
If you itemize deductions, you can deduct contributions you make to qualified charitable organizations. You will need to make any contributions before December 31st to deduct them from this year's taxes.
If you have a Health Savings Account (HSA) you do not have to use the funds in the same year in which you contributed them. This is a good incentive to consider making the maximum contribution each year.