8 (easy but powerful) Things To Do Before Year-End

There is a lot to do between Thanksgiving and New Years – lots of shopping, eating, visiting, giving…but, don’t forget to take care of yourself and your finances.

There are several items that have a year-end deadline that you’ll want to make sure you take care of before December 31.

  1. Clean out your Flexible Spending Account.
    Many employers require you to use up the money in your FSA by December 31 or lose it (although many companies offer a grace period to March 15, so ask your employer for its deadline). You can use your FSA money tax-free for out-of-pocket medical expenses such as deductibles, co-payments, prescriptions, glasses, contact lenses, and many other bills. This is your money – don’t lose it!Also, the IRS has loosened these “use it or lose it” rules for 2014. The new rules allow you to roll over up to $500 from your FSA from year to year. This makes the annual task of estimating your medical expenses a little less scary. Your employer can choose whether or not to offer this rollover benefit to you, though, so check with your HR department.
  2. Take your Required Minimum Distribution (RMD)
    After you turn age 70½, you must take required minimum distributions from your traditional IRAs and your 401(k) accounts (although there are some exceptions). You have until April 1 of next year to take your first RMD, but you must make your required withdrawals by December 31 every year after that.The penalty for not taking your RMD is to pay the IRS half of what you should have taken! Trust me, taking your RMD may cause you some pain, but, not taking it is too expensive.
  3. Make your 2013 IRA contribution
    Okay, you have until April 15th of 2014 to do this, but why wait? The limits for 2013 are $5,500 if you are under age 50 and $6,500 if you are over 50. These contribution limits stay the same for 2014. Do it.
  4. Increase your retirement plan contribution 1%
    I promise you won’t miss it, and you’ll be so happy you did it when you’re 65! If this will put you over the $17,500 annual contribution limit, you may need to do some math to make sure you get all of the company match you’re entitled to. Contact me and a 5 minute conversation can put extra money in your account.
  5. Get in last minute charitable contributions
    The end of the year may really be the point at which you can survey the past 365 days and say, “Yeah, I had a good year. Time to give back.” That’s nice. Here are some ways to make sure you get your contribution in by the deadline.
  6. Review all beneficiaries
    Again, once a year could do the trick here – review the beneficiaries you have on retirement accounts – including employer retirement and IRAs, life insurance, annuities, etc. Don’t forget the life insurance you may have through work!
  7. Update your Lock & Key
    Your L&K will make life infinitely easier for someone, someday. But, not if it’s out of date. Once a year, look this over and make sure it’s complete. Check here if you need an extra copy.
  8. Back-up your hard drive
    Keep everything on your computer? Who doesn’t? Ever get that horrible feeling in the pit of your stomach when your computer takes a little too long to pull up a file? You know you need it, a backup will ensure that your precious files live on.

If you need any help getting your finances in shape for 2014 call us today at 610-648-3814.

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