Guess what folks, summer is over and the holiday season is upon us, so the procrastinating you have been doing for the last few months over your personal finances has stretched as far as it can. You barely have enough time to put some things in place, so take heed and take care of these very important points before 2010 is just a memory.
1. According to the experts at Yahoo Finance your taxes ought to be a major focus and they have a few suggestions for cutting costs and saving money. The first thing to do is check to see if you have taken full advantage of your employer-sponsored retirement plan. The limit for contributions for 2010 is $16,500 or possibly $22,000 if you are 50 or older. It might hurt a little to put a squeeze on your paycheck right around the season of giving when you could use the extra cash for purchasing gifts but you simply cannot afford to pass up the compounding tax-deferred income. So, right now you need to throw as much as is allowable into the retirement fund coffers.
2. Here’s a nifty little trick you need to know about. It’s called deferring income and it means if you are going to get a year-end bonus or make a retirement account withdrawal wait for another month before collecting. This is better if you know you will be subject to the alternative minimum tax (AMT).
3. Your IRA is one of the most important pieces in your retirement plan and you need to do everything it takes to nurture it. For example, you need to take your required minimum distribution (RMD) for the year or you will pay a penalty. Make sure you have not made excess contributions or you will pay a 6% penalty. Make sure that if any IRA funds were moved since the beginning of the year that they landed in the correct accounts. One more thing – this is your last opportunity for Roth conversions. Oh, and by the way, in case you were not aware, you can roll old 401(k)s from previous employers to an IRA.
4. Go to your favorite bookstore or library and get some up-to-date material on personal financial strategies that get you off the hook for living totally from paycheck to paycheck. Authors such as Suze Ormon, Kevin Trudeau and Robert Kyosaki can teach you how to get out and stay out of debt or how to invest in assets and stop throwing your money away on liabilities.
5. Look for more ways to be generous and of service for your community. Remember the old adage – “What goes around comes around.” If you don’t quite understand what this means, get yourself a copy of Dr.Wayne Dyer’s book, The Power of Intention.