Now that summer is just about over, this is a good time to think about doing some of those things that you may have been putting off while you’ve been fishing, camping, grilling, swimming–or whatever it is you do during the summer. There is sort of a lull now between summer activities and the onset of fall, making now a good time to do these five financial things.
Your will and power of attorney
If you don’t have a will, you should. It’s the only way you can take care of your family financially should something suddenly happen to you. You don’t have to wait until a life-changing event such as the birth of a child to review your will. Also, if you don’t already have a financial power of attorney, you should make one. If you do have one, check to make sure the people that you have designated to make decisions if you become incapacitated are still mentally and physically up to the task.
Your insurance policies
Get out your insurance policies and reread them to make sure that you still have the right coverage and that you’re not paying too much in premiums. For example, if your family is now more reliant on your income for some reason, you might consider increasing your life insurance coverage. If your expenses have gone up due to the birth of a child, a new mortgage or college tuition, you might need more coverage. Do you have life insurance coverage through your employer? Then you should increase the amount of this coverage first as it is usually the cheapest you can buy.
You might also want to adjust your homeowners insurance if the value of your home has gone down or up this year. If you purchased or inherited any antiques or valuable jewelry, you should talk to your agent about getting a rider to cover them.
Investments
If you have a 401(k), 521 college savings plan or some other kind of investment plan, and you received a raise during the recent year, you might want to boost your contributions. Did you celebrate your 50th birthday this year? Then you can start doing catch-up contributions to your 401(k) or IRA. If you have a 401(k), that’s an extra $5500 you can contribute on top of the $17,000 you are allowed to contribute this year. And if you’re turning 70¼ this year, remember that you will have to start taking the minimum required distributions from your 401(k) plan.
It’s important to use up the tax-free money in your flexible spending account before the year ends. Otherwise, you may lose it. If you still have a good-sized balance, treat yourself to new prescription glasses or stock up on Band-Aids. Be sure to check with the IRS publication 502 at www.irs.gov to see what does and what doesn’t qualify.
Family gifts and charitable donations
Now would be a good time to work on your annual charitable giving particularly if it’s to be a non-cash donation to a nonprofit organization. You can also give as much as $13,000 in cash this year to each of as many people as you would like with no tax consequences.
Tax rates
If the Bush tax cuts are allowed to expire next year and with other tax changes coming, be prepared. As an example of this, the top tax rate on long-term capital gains may increase to 20% from the 15% that it is now. And qualified dividends could go to ordinary income rates instead of being taxed at a top of 15% as they are now.
Get out of debt
If you’re having serious problems with debt, none of these suggestions can help. So, you should make getting out of debt number one on your list of things to do. This is where we can help. Our debt relief providers offer a simple 100% satisfaction guarantee. We’re so confident that we can help you achieve your goal of becoming debt-free in a reasonable time, that if you are ever unsatisfied with our recommended debt relief programs you can cancel at anytime without any penalties or fees.
Call our toll-free number or fill out the form below to get a free quote. It’s just a smart thing to do.