- Take full advantage of your IRA contributions. For those age 50 and over, you’re allowed $6,500 and if you’re under age 50, $5,500. It may also be of benefit to see if you qualify for a deductible IRA contribution or if contributing to a Roth IRA makes sense.
- Make the maximum contribution to your employer sponsored retirement plan. Granted, there may not be much time left in the year to do this, but there is plenty of time to do so for 2016. Many companies have access to their plans online and employees can change contribution amounts when necessary. If you’re not already doing so, consider saving at least 10 percent of your gross income. Aim for 15 to 20 percent if you can. Pay yourself first and live off of the rest.
- Consider starting or contributing to a 529 college savings plan. Many children received gifts of money this Holiday season. Parents can help compound that gift by saving for college. Contributing to a 529 plan allows money to grow tax-deferred and qualified education expenses taken from the plan are tax-free. Some states allow tax deductible contributions.
Come soon we’ll have a great list of financial things to consider for a prosperous and financially sound 2016.