Good news: There’s still time.
There’s still time to get your retirement planning affairs in order before the end of the year—to ensure that 2014 ends up a successful, savvy year for your own long-term financial preparation.
Before too much more time passes, take just a few minutes to read through our end-of-the-year retirement planning checklist, and make sure you take any actions needed to maximize your savings.
Do you have a 401(k)? Then consider boosting your contributions—hitting the maximum contribution limit, if at all possible. You may have been a bit lethargic in your contributions this year, but that doesn’t matter if you try to make up some lost ground now. But remember: You only have until December 31.
If you have an IRA, on the other hand, then you have a little bit more time to play with—until April, actually—but that doesn’t mean you shouldn’t be planning on hitting the contribution maximum there, as well. If you’re eying a holiday bonus or some other supplemental income, consider putting some of it toward your retirement fund.
Meanwhile, if you’re past age 70 ½ and have either a traditional or a Roth IRA, you’ll need to take your minimum distribution. Following the year you turn 70 ½, you have until April 1 for this—subsequently, it’s December 31—but why not get the distribution now, or at least put it on your calendar so that you don’t forget? The penalties for not taking the minimum distribution are significant. This same advice holds true for those with 401(k)s as well—again, assuming you’re past 70 ½ years old.
Don’t just take your minimum distributions, but also brainstorm some ways to use that money wisely. Do you have some idea as to what April’s tax bill will look like? You probably do, and may wish to set aside this money to help cover it.
Some of you may have direct deposits set up for your retirement accounts. That’s excellent, but remember that the contribution maximums are actually increasing in 2015, so you may want to reset your deposits accordingly. We’ve blogged about this a bit here.
Finally, call or e-mail your financial planner and set up a time to talk, to review your plans and your accounts and simply to reflect on your expectations for the future. Financial plans should be revisited and revised as needed, and now is as good a time as any to do exactly that.