Financial Planning Tips for the New Year
There is still a way to lower your taxable income for 2021. You have until April 15, 2022 to file your 2021 taxes. Contributing to a Traditional IRA will reduce your taxable income and help you save in a tax deferred account. The maximum amount you can contribute is $6,000 but that rises to $7,000 if you are over the age of 50.
Max out your 401k contributions. If you are unable to contribute the maximum of $20,500, then try increasing your contributions by at least 1%. If you see that the 1% increase does not make a dramatic difference, you can increase it. The more you can save into your 401k now the better off you will be in retirement.
Review your investment portfolios and make sure they are in line with your risk tolerance. This will help reduce stress in periods of volatility.
Review your estate planning documents such as Wills, Living Wills, Trusts, and Power of Attorneys. Make sure they are updated and make any changes as soon as possible to avoid issues later on.
Review your auto and home insurance to make sure you have enough coverage to protect your assets. An inexpensive umbrella policy may be needed and will help protect your assets.
Set up a budget for the year and keep in mind any upcoming expenses such as vacations, home improvements, and children’s expenses.
You also want to create or update your financial plan which will show you where you are and how to meet your financial goals. We will be more than happy to help you put a plan together.
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