The end of the year is here. These financial moves can help set yourself up for success.
End of the year is the perfect time to take a good look at your finances and make important moves that not only help right now, but can help position you for a much stronger future. You may still have time to review tax breaks and employee benefits before the end of the year, and make some key decisions for open enrollment. Also, take some time to step back and consider your financial goals for next year and beyond. It’s a good time to reassess what you want to accomplish financially and how you plan to reach those goals. The following steps can help.
Check on how much you’ve contributed to your 401(k) or other retirement plan at work so far this year, and boost your contributions for the last few paychecks of the year if you can afford to add more.
Plus, you may be able to get even more money from your 401(k) if your employer matches your contributions. Some employers may offer a percent, say 2% to 6%, of matching contributions based on what you contribute. Don’t miss the opportunity to get that extra money
If you have a health insurance policy with a high-deductible policy, you may be eligible to contribute to a health savings account (HSA). You can also open an account if you have an eligible health insurance policy on your own. The contributions are pre-tax if you make them through your employer (or tax-deductible if on your own), the money grows tax-deferred, and it can be used tax-free for qualified expenses at any time. In addition, unlike a flexible-spending account, you don’t have to use the money by the end of the year. You can typically use the money for your health insurance deductibles, copayments, prescription drugs, and over-the-counter medications. You can also use the money for dental and vision care and other out-of-pocket medical expenses.
Even though you can use the HSA money for a wide variety of expenses at any time, you can also let the money grow tax-free in the HSA for the future. After you enroll in Medicare at age 65, you can’t make new HSA contributions, but you can withdraw money tax-free from the HSA to pay premiums for Medicare Part B, Part D, and Medicare Advantage.
If you contribute to a medical or child-care flexible-spending account (FSA) at work, check on the balance now and make plans to put that money to good use before the end of the year or before the employer’s deadline (some employers give you to March 15) or let you roll over $500 from one year to the next If you don’t use the money before the deadline, you’ll lose it.
You can use the money in an FSA for many out-of-pocket medical expenses, so this may be a good time to schedule appointments with the eye doctor and dentist, buy glasses or prescription sunglasses, stock up on over-the-counter medications, and find out what drugstore items, such as certain sunscreens and menstrual products, are eligible for FSA withdrawals. Find a list of eligible items at FSAStore.com.
If you have a dependent-care FSA, check on how much money is left in that account, too. You can use the money for child-care costs for kids under age 13. Eligible expenses include preschool, daycare, a nanny or babysitter while you work, before- and after-school programs, and even summer day camp. Be aware of eligible expenses over of the end of the year, and dig up any receipts for earlier expenses that may qualify.
This is also the time of year to make decisions about your employee benefits. Don’t just keep these choices on autopilot; make sure you’re making the most of all of your options. If you have several health insurance choices, consider your family’s medical expenses and medications for the year, as well as the doctors included in the plan’s network. If your spouse has coverage at work, consider whether you may get a better deal joining that plan instead, or including your kids on one plan or the other. Also consider the benefits of choosing a high-deductible health insurance policy that could make you eligible for HSA contributions, especially if your employer contributes to the account.
If your employer gives you the option to buy more disability insurance coverage, consider this benefit, too. Your employer may already offer some sick leave and disability benefits for all employees, but they may also let you buy additional coverage, which can provide additional benefits if you become sick or injured and unable to work.
Make the most of other benefits offered by your employer, such as gym memberships, healthy living programs, commuting benefits, and a financial wellness program. All of these benefits can help you get even more from your employer.
This is also a good time to step back and assess where you stand in your financial goals, or think about whether you want to revise some of those goals. Did you have to adjust to a lower income or different expenses? Have your financial priorities changed? Take some time before year-end and think about these big-picture issues. This may be a good time to work with a financial professional who can help you reassess what is important to you and help you make a plan to help reach your financial goals.
A version of this article originally appeared on HerMoney.
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