Despite the potential long-term benefits of reviewing personal finances on an annual basis, it seems that many Americans still don’t make it a priority to do so.
Have you already taken steps to give yourself a fresh financial start next year? It’s still not too late to begin.
Aim Higher for Retirement
Today, workers are eligible to contribute more money than ever to their employer-sponsored retirement plans. For most workers, the maximum annual pre-tax contribution is $18,000 in 2015. If you’re at least 50 years old, you may also make additional contributions — known as catch-up contributions — of up to $6,000. That amounts to a $24,000 overall contribution limit this year.
Search for Savings
Even if you can’t contribute the maximum, a reality for many given life’s various financial challenges, seek out opportunities to set aside more money for retirement whenever possible.
Consider creating a comprehensive household budget that allows you to plan and track spending on an ongoing basis and includes among your listed expenses a commitment to “pay yourself” in the form of retirement savings. More than likely you’ll find some “fat” in your budget, even just a little, that can be trimmed to free up savings dollars.
The U.S. savings rate recently hit its lowest level in almost half a century, due in part to higher rates of borrowing and credit card debt. If debt is getting in the way of your long-term goals, consider strategies for chipping away at it:
- Transferring high-interest debt to a credit card with a lower rate.
- Trying to pay at least twice the minimum required payment.
- Using a tax-refund to pay off outstanding loans.
For more ideas on how to get a fresh start, talk to your financial advisor.
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