As we embark into the last month of 2024, it’s helpful to reflect on the past year to ensure your financial life is working towards your goals. To do this, here is a simple checklist to consider before setting new goals for 2025.
1. Review and revise your budget.
Looking back at the year, evaluate how well you stuck to your budget, paid down debt, and reached your savings goals. It’s a great time to adjust your budget for the new year.
2. Maximize your 401(K) contributions for 2024.
Between now and December 31, 2024, there’s still time to make contributions to your 401(k) account up to $23,000 ($30,500 if you’re 50 or older). Even if you don’t hit this maximum limit, your contributions will have a big impact by lowering your taxable income for 2024.
3. Think about maximizing your IRA contributions.
The contribution limit for most IRAs in 2024 is $7,000 ($8,000 if you’re 50 or older). With IRAs, you have until Tax Day (April 15) to contribute so you can assess your year-end financial situation before doing so.
4. Review your beneficiary designations.
Beneficiary designations often supersede will and trust directives in court, and not updating them is a common and potentially expensive mistake. It serves you and your loved ones to review and update them as needed each year.
5. Take your required minimum distribution (RMD).
If you're required to take your RMD, you'll want to act before the end of the year to avoid paying a penalty. If you turned 73 this year and are taking an RMD for the first time, you have until April 1, 2025, to withdraw your RMD. After that, you'll need to take it before the end of each calendar year.
6. Take advantage of charitable giving tax benefits.
Charitable giving offers a way to financially support your favorite charities while enjoying tax benefits with your generosity. If you’re 70.5 or older, you can make a qualified charitable distribution (QCD) directly from your traditional IRA without paying taxes.
7. Review your insurance policies.
Look at your home, auto, life, and long-term care insurance policies to ensure they still meet the needs of you and your loved ones. These policies can be life-changing when they are a part of your comprehensive financial planning.
8. Review your estate planning documents.
Look over your will, health care power of attorney, advanced medical directive, and general power of attorney to ensure all names are up to date and each document continues to reflect your wishes.
9. Share any major life events.
Weddings or divorces, births and deaths, career changes, relocations… these crucial life events impact your spending, budgets, and personal investment planning, so take a moment to keep your financial planning team updated.
10. Meet with your financial advisor.
Our team is here to guide clients year after year toward pursuing financial goals. If you don’t yet have a financial advisor and a retirement income plan, we are here to help. We meet with clients every day to turn their dreams into an actionable and well-managed plan. If you’d like to talk, you can call or text our office at 970.622.2366.
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Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.
Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax.