Tips for Your Year-End Financial Review
As 2016 comes to a close, it is important that you do not forget your year-end financial review in the shuffle. At the end of the year, it is important to review your budget, investments, and financial goals. In this article, we will outline some financial steps you should take before 2017.
Max Out Retirement Plan Contributions
It is important to take advantage of employer matching for retirement plans. It is free money you should be taking advantage of! Doing so will double your money. But if you do not contribute, neither will your employer. If you do not have contributions set up, it is something that you should take care of before January.
Contributing to retirement plans also has tax advantages. They are tax deductible, up to a certain limit set out by the IRS each year. The limit also differs for each type of retirement plan, so check with the appropriate department at work to see what your plan limits are.
Review Your Insurance Coverage
A lot can change in the course of a year. It is important to make sure your insurance coverage reflects those changes. If you purchased a new home, a new car, started a business, got married, had a child, or started a new job, your insurance coverage may no longer be adequate. Have your insurance agent review your life and health policies to ensure you are fully covered. You may also want to review your auto and home policies to see if you have enough coverage and that your premiums are still competitive.
Check Your FSA and HSA Accounts
If you have an FSA or an HSA, now is the time to review them and check if you took full advantage of their benefits. If you have a Flexible Spending Account, you are able to contribute up to $2,550. This money is put into your FSA pre-tax and allows you to pay for certain out-of-pocket health care costs with tax-free money. As an added bonus, your $2,550 contribution is also tax deductible.
Health Savings Accounts are available to those with high-deductible health insurance plans. HSAs are also funded with pre-tax money. You can contribute up to $3,400 if you are single, or $6,750 if you have a family. These contributions are tax deductible and they allow you to pay for qualified health care costs with pre-tax money.
If you have an HSA make sure that you max out your contribution limit before the year’s end. FSAs are little more complicated, you should talk with your plan provider before making any contributions. You should also plan ahead for next year so that you can budget the necessary amount to reach your contribution limits.
Set Goals for Next Year
Financial success is based on goals; setting them, working to achieve them, reviewing your progress, and adjusting them as necessary. At least once a year you should take the time to sit down and assess your current goals. Get rid of goals that are no longer relevant and add new goals that reflect your life changes over the past year. If you reached goals, mark them off and replace them with new goals. If you currently do not have any financial goals in place, now is the time to set them! The sooner you start planning, the more successful you will be. If you’ve been wanting to start a business, now is the time to do it. Starting a business does seem difficult, but it’s a lot easier than some people might think. Once the product or service is created, business owners only have to work out their sales strategy and then they can start selling. Maybe some people would like to look into the subscription revenue model for their business. This could help them to sell more items and it ensures that customers repurchase the items again. Maybe that could help a business to grow. If becoming a business owner is your goal, then you should start working towards it now.
Annual Financial Review
You should meet with your Certified Financial Planner at least once a year. They will be able to update your financial plan to reflect your new and adjusted goals. An updated plan will also show you the progress that you have made over the last year. Your review will highlight any changes that you need to make for the following year. If you do not have a financial plan, get one! A professionally prepared financial plan is the key to a successful future.
The end of the year is coming fast! Do not delay, put these year-end financial review tips into practice and start 2017 out right.
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