Holiday To-Dos

The holidays are right around the corner, and now is the best time to work on your retirement finances.  Below is a list of finance needs to get out of the way so you can start enjoying the holidays:

• 401(k). The current 401(k) contribution limit is $17,500.  For individuals 50 and older, you can add up to another $5,500 as a catch-up contribution.  Right now you should check your 401(k) account to see how much you have contributed since the beginning of the year.  If you have not maxed out your 401(k), this is your last chance to increase your contribution for 2014.
• Roth IRA. The Roth IRA contribution limit is $5,500 for those under 50. If you are 50 or older the limit is $6,500.  Now is a good time to check your contributions and see if you can add any money to a Roth IRA account for 2014.  By contributing to a Roth, you will never have to pay tax on any gains after you meet withdrawal qualifications.
• 529 Savings Plan. If you have a child, there is even more savings to do.  If you have any money leftover after taking care of retirement contributions, consider adding to a 529 college savings plan.  This can offset your state income tax and save you some cash next year.  The fund will also grow tax free for the purpose of funding higher education.  Since tuition costs are rapidly increasing, this may not be a bad idea.

See Joe Udo, 5 Financial Matters to Resolve Before the Holidays, Yahoo Finance, Nov. 20, 2014.