Set Yourself Up Now For A Financially Successful 2020 -
Friday , 30 October 2020

Set Yourself Up Now For A Financially Successful 2020

Spend 15 minutes and make sure you’re doing all you can to take advantage of 2019 and setting yourself up for a successful 2020.

  1. Evaluate this year’s financial plan progress:
    • If you created a plan for 2019 how did you do?…
    • How much have you spent and saved?
  2. Take another look at your 401(k): 
    • Does your employer match your 401(k) contributions?
      • Now would be a good time to make sure you aren’t leaving any money on the table in the form of matching contributions because once the calendar turns to 2020 you won’t be able to go back and make up those missed contributions.
        • For 2019 you can contribute up to $19,000 to your 401(k) and
        • an additional catch up of $6,000 if you turned 50 this year.
  3. Have access to a Health Savings Account (HSA,) max it out: 
    • HSA accounts are like the fountain of youth for the financial planning world. They’re almost too good to be true. This is the only account in the world that will give you a triple tax benefit. Money goes in tax free, grows tax free and if used for medical expenses comes out tax free…but here’s the kicker. If you really want to maximize these plans you need to try to pay for current medical expenses out of pocket and let these funds grow.
      • In 2019 individuals can contribute $3,500 and a family can contribute $7,000.
  4. Use the balance of your Flexible Spending Account (FSA): 
    • If you have an FSA, now is the time to spend that unspent balance.
      • Some plans will allow you to carry over a small amount of the funds to next year, but many won’t so, use it, or lose it.
  5. Review your Insurance Coverage: 
    • If you have life, health, disability, homeowners or long- term care insurance make some time to review your policies.
      • Has anything changed with your policies, have premiums gone up?
      • In regard to your life insurance have you had any life events that would warrant a change in your coverage?
  6. Review or Create Estate Planning Documents: 
    • …Stop denying the inevitable, you’re going to die, make sure your loved ones are taken care of the way you wish.
  7. Review Expenses: 
    • Many people have no idea how much they spend each month or where they are spending their money. This goes back to #1 evaluating your progress in your plan.
  8. Have a Conversation with your Tax Advisor: 
    • ….Chat with your tax advisor to ensure you aren’t leaving any deductions on the table before we get into 2020 and it’s to late. Everyone likes to reduce their tax bill.
  9. Roth Conversions: 
    • Find out if you have any room for a Roth conversion…They’re not for everyone, but these can be a great tool to give you more flexibility in retirement.
  10. Sell Losers to offset Gains:
    • Tax loss harvesting is an easy way to lower your taxes on a year to year basis. Do you have any gains for the year and hold positions with losses?
      • Realize your losses to offset those gains. The losses will offset your gains dollar for dollar.
      • You can also use an additional $3,000 to offset other income and if you have more than $3,000 in excess losses you can carry that over indefinitely until those losses are exhausted.

Achieving your financial goals is a never-ending process and staying on top of financial planning is imperative to your success…

Editor’s Note:  The above excerpts from the original article by Danny Ratliff have been edited ([ ]) and abridged (…) for the sake of clarity and brevity.  The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.  Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor. Also note that this complete paragraph must be included in any re-posting to avoid copyright infringement.