NEW HAVEN, Conn. (WTNH) — It’s the end of the year, and while many of us are ready to say goodbye to 2020, your bank account may be saying “not so fast.”
News 8 is stretching your dollar with end of the year financial moves you may want to consider.
It’s not a year many of us want to remember, but as we look forward to a clean start, financial experts remind you to make moves now to set your bank account up for success in the new year.
“One thing I tell people to do is review those retirement plan contributions,” said Chartered Financial Consultant, John Caserta.
He said there could be a retirement tax break you don’t want to miss out on. Make sure you’re maxing out your contributions if you can and taking advantage of any matches your company provides. Also, consider Roth Conversions.
“With a Roth Conversion, you’re taking a traditional retirement plan, which you’ve gotten a tax deduction, and you’re converting it to a Roth, which means you’re paying taxes you haven’t paid yet. So, ultimately, you could have tax-free income in the future, if your income is low because of interruptions from the pandemic, it might actually be a good time to do that.”
If you’re struggling this year, Caserta suggests you contact your creditors and lenders to find out who’s providing relief programs so you don’t start the new year with any negative reports against you.
“Another thing people can consider are charitable contributions. Even though the standard deduction is pretty high, and most of us don’t itemize deductions, you can still get up to a $300 deduction for a contribution through the CARES Act.”
And there’s the obvious, go into the year with a plan to pay down debt and build up any kind of savings you can.
Remember if you have a flexible spending account, that’s usually a “use it or lose it program.” However, there are some changes with the latest economic relief package. If you still have money in there, you want to contact your employer or financial advisor to find out if that can roll over for you. Many exceptions are being made this year.