Early in the new year is a great time to take advantage of new opportunities to save and improve your finances. Here are 10 financial moves to make in the next few months.
1. Stash more money in your retirement accounts. The new year brings new contribution limits for 401(k)s, 403(b)s, 457s and the federal government's Thrift Savings Plan. Maximum contributions rise by
2. Automate your savings. The contribution limit for IRAs remains at
3. Master new strategies to save money on medical expenses. Picking the right health insurance policy is just one of many ways to save on health care. Now that most people are shelling out for higher deductibles before coverage kicks in and paying coinsurance based on a percentage of the cost of care, it is more important to become a smart health care shopper. Learning a few key strategies and taking advantage of your insurer's shopping tools can save you hundreds--or even thousands--of dollars in medical expenses throughout the year.
4. Get extra cash from wellness programs at work. Even if in the past your employer offered a wellness program that didn't seem worth the hassle, take a second look. One of the biggest trends in employer health care is providing added incentives to get employees to participate in wellness programs. You might get some extra cash, too--many employers give employees
5. Get triple tax savings in a health savings account. If you have a high-deductible health insurance policy, contributing to an HSA can be one of the most valuable ways to save. You can build up a tax-free stash of money to use for health care costs either now or in the future--and you can save for out-of-pocket medical expenses and
6. Fix the rest of your insurance. You can save a lot of money--and protect your savings--by making sure you're getting the right coverage, at the best price, for all of your insurance, not just health coverage.
7. Make a charitable plan. Rather than scrambling in December to write checks to charities, you may be able to make a bigger impact (and get a bigger tax break) if you create a charitable plan to follow throughout the year. Think about stocks you may want to transfer to charity when they reach a certain price, or consider opening a donor-advised fund to build your charitable savings over several years (while getting a current tax break). You can also start setting aside money for bigger gifts, such as a scholarship fund, or build a charity "slush fund" so you have some extra money ready to give quickly after a natural disaster or other emergency.
8. Start planning for your required minimum distributions. You have to take required minimum distributions from many of your retirement accounts after you reach age 70½ (although you can delay taking withdrawals from your current employer's retirement plan if you're still working). Because your required withdrawals for 2015 are based on your life expectancy and your account balance as of
9. Squeeze some extra tax savings. Start gathering your tax files now so you don't miss out on valuable deductions when you do your 2014 tax return. Don't forget about the tax break for summer day camp and other child-care costs if your kids are younger than 13; the retirement savers' tax credit for low- to middle-income people who save in an IRA, 401(k) or other retirement plan; and tax breaks for college costs and continuing education.
10. Give yourself a financial checkup. Now is also a great time to make sure you're still on track to reach your financial goals. Consider enlisting help from a financial planner to get a one-time financial checkup or to get more frequent help with saving and investing. While you're at it, visit www.annualcreditreport.com to check your credit report with each of the three bureaus to look for any errors or to spot areas you'd like to improve.
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Kimberly Lankford is a Contributing Editor at Kiplinger's Personal Finance magazine. .