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Ten financial moves to save 2017, get a head start on 2018

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Eleven months ago, when you watched the New Year’s Eve countdown and raised your glass to 2017, did you make any resolutions to put your finances first this year?

If so, you’re not alone. Finance-related resolutions are the third most popular New Year’s resolution, following self-improvement and weight loss.

Millions strive to get out of debt, save more or accomplish a financial milestone, whether that’s buying a vacation home or retiring.

If you fall into this camp, how did you do? Did your resolution fall to the wayside, as resolutions often do?

The good news is it’s not too late to make headway on 2017 goals, but you need to start now. Get a jump-start on these 10 financial actions before ringing in 2018:

(1) Make the most of retirement savings

If possible, max out contributions to your 401k by the end of the year. For 2017, you can contribute as much as $18,000 (or $24,000 if 50 or older).

You might also consider contributing to a Roth individual retirement account, if eligible. For 2017, you can contribute as much as $5,500 (or $6,500 if 50 or older).

(2) Use medical and dental benefits

Did you have good intentions of taking care of dental work, blood tests or other medical procedures?

Now’s the time to take advantage of health care needs before your deductible resets. Dental plans, in particular, often have a maximum coverage amount.

If you haven’t used up the full amount and anticipate treatments, make an appointment before Dec. 31.

(3) Verify expiring sick and vacation time

Sick or vacation time might expire at the end of the year, depending on your company.

If sick or vacation time expires, fit in a last-minute vacation, staycation or trips to the doctor to use up these benefits.

(4) Use a flexible spending account

Use flexible spending account dollars by year’s end. Your benefits won’t carry over and you’ll lose unspent money in your account.

Check the restrictions to see how the money can and cannot be used.

(5) Double check RMDs

If you’re retired, review your retirement accounts’ required minimum distributions. An RMD is the annual payout savers must take from retirement accounts, including 401k’s and various IRAs when they turn 70½.

If you don’t, you may face the steep penalty of 50 percent of the distribution you should have taken. To calculate your RMD, use one of the Internal Revenue Service worksheets.

(6) Stay on top of charitable contributions

If you made a charitable contribution this year, you might be able to lower your total tax bill when you file early next year. It can be especially advantageous if you donated appreciated securities to avoid paying taxes on gains.

Along with other tax documents, find and organize receipts from donations to charities, whether it was a cash, securities contribution or other type of gift.

(7) Review insurance coverages

A lot can happen in a year. As you experience life changes, from the birth of a child to marriage to a new career, regularly review insurance coverages and beneficiaries.

Now is the ideal time to re-examine insurance policies and make sure they are up-to-date.

You also might want to evaluate your need for other types of insurance, such as long-term care.

(8) Discuss loss harvesting with your adviser

If you invest in bonds, mutual funds or stocks in accounts other than your 401k or IRA, review realized and unrealized gains and losses. You might be able to offset some gains by selling some losses.

Tax-loss harvesting can help save on taxes, but be sure the move also makes financial sense. Talk with your adviser about harvesting losses. If it makes sense for you, it must be completed by Dec. 31.

(9) Make sure your estate plan is up-to-date

If you have an estate plan, check in periodically to ensure all documents are current and no major details have changed.

Any major life event is a good time to think about updating estate documents. If you change any of the beneficiaries in one place, such as a life insurance policy, make sure they are consistent with other documents so there is no confusion.

(10) Give without tax consequences

It’s never too early to start planning for the legacy you want to leave loved ones without sharing a good portion of it with Uncle Sam.

Each year, you can gift up to $14,000 to as many people as you wish without those gifts counting against your lifetime exemption of $5 million.

If you’ve yet to gift this year or haven’t reached $14,000, consider gifting to your children or grandchildren by Dec. 31.

Lisa Strohm is founder and CEO of The Athena Network, a financial and life management firm based in Upper Saucon Township, providing investment advice and financial planning offered through Good Life Advisors LLC, a registered investment adviser. (The Athena Network and Good Life Advisors are separate entities.) She provides fee-based financial planning and investment management for women, their spouses and extended families. She can be reached at 484-224-3439 or lisa.strohm@the-athena-network.com.

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