3 Financial Moves You Should Make Before the New Year
Don’t miss the year-end deadline to take advantage of several money-saving opportunities.
Laura Adams, MBA
The year is almost up! December 31 is the deadline to take advantage of several money-saving opportunities.
So it’s time to make these important financial moves before it’s too late:
Money Move #1: Review Your Retirement Contributions
Find out how much you’ve already contributed for the year to a workplace retirement plan or an IRA. If you need help getting this information, contact your benefits or plan administrator.
The contribution limits for 2014 are:
- $17,500, or $23,000 if you’re over age 50 for workplace plans
- $5,500, or $6,500 if you’re over age 50 for IRAs
If you can bump up your final contribution(s) to reach the limit, I highly recommend it—especially if you’re expecting a year-end bonus at work.
And if you’re near or over the annual limit, adjust contributions down or temporarily suspend them until after January 1.
If you didn’t get close to maxing out your retirement plan, now is the perfect time to bump up contributions for next year. For 2015, the annual limits have been increased for workplace plans (but not for IRAs) to $18,000, or $24,000 if you’re over age 50.
Make a goal to increase your contribution rate at least one percent each year so you make steady progress on your retirement goals. You probably won’t even miss the money after a couple of paychecks!
Money Move #2: Make Charitable Contributions
December is the most popular month for charitable giving. If you itemize your taxes, you’re eligible for a tax deduction on qualified donations—but they must be completed before you ring in the New Year.
Read Which Charitable Contributions are Tax-Deductible to find out more about the kinds of donations that qualify for a tax break and how much.
Money Move #3: Make Cash Gifts
If you’re thinking about helping out a family member or friend with a big holiday gift, it’s smart to do it before the end of the year. You’re allowed to give annual gifts of up to $14,000 per person, without having to pay a gift tax.
If you want to give more than $14,000, you could make one gift now and another after the New Year to avoid any tax liability.
Read or listen to 5 Best Ways for Making Loans to Family and Friends for more details. You can also check out the frequently asked gift tax questions at IRS.gov.
Other Links You Might Like:
10 IRA Facts Everyone Should Know
25+ Best Financial and Productivity Tools
The Rules for Using a Spousal IRA
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New Years Resolution image courtesy of Shutterstock
About the Author
Laura Adams received an MBA from the University of Florida. She’s an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers is her newest title. Laura’s previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.