How can I make meaningful resolutions that will help my family?
The holidays are over and Donna has yet to announce her “new year, new me” resolutions. Donna wants more than a good workout routine for her family; she wants to make sure they are financially secure.
Can you relate?
It’s not easy to make financial resolutions, but with the right plan, Donna (and you) can rest easy about the future.
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Up Your Retirement Contributions
In 2020, Donna can contribute more than ever to her retirement accounts. Because she’s still working, Donna can stock away $19,500. If you are expecting a raise, bonus, or can sock away a little extra, consider upping your contributions this year. Donna knows, even the smallest increase can have a large impact down the road.
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Make Catch-Up 401(k) Contributions
Since Donna is over 50, she can play “catch-up” with her retirement savings. This means she can contribute an extra $6,500 to her 401(k), maxing out at $26,000 in 2020. If your birthday falls anytime in 2020, you can start making these contributions as early as January 1, 2020. Think of it as a birthday present to yourself 😉
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Max Out Your IRA Contributions
As long as Donna or her husband are earning income, she can put $6,000 into a traditional or Roth IRA, assuming she meets the income threshold. Donna can contribute up to $7,000 since she’s over 50. Certain situations allow for backdoor Roth contributions if you can’t deduct your IRA contributions.
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Start A Health Savings Account (HSA)
Did you know HSAs have triple tax-free benefits? Donna can take tax deductions when funding the plan, her money will grow tax-free, and it’s not taxed on withdrawals when used for health care expenses after the age of 65. You can contribute $3,550 as a single or $7,100 as a family.
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Design a Comprehensive Financial Plan
Donna has real, tangible ways she can work to prepare for her future, but she’s not done yet. She wants to meet with her financial planner and make sure she’s on track to meet her retirement goals. The ups and downs of the market are so much easier to follow when you have a solid plan to follow.
With the right planning and professional help, Donna can take advantage of various retirement plans and stow away a substantial amount each year for her future. Sounds like a pretty good New Year’s Resolution to me.
Talk to your financial advisor or accountant. Let’s make 2020 the best year yet!