Financial Resolutions Worth Keeping in 2016: Tips from U.S. Bank Coach Margaret Paddock
December 18 2015 - 9:00AM
Business Wire
Going into a new year, many start thinking about
resolutions–eating healthier, reading more or giving up bad habits.
However, whether you’re a millennial with student loans or a baby
boomer about to retire, one of the best things you can do for the
new year is reassess and take control of your financial situation.
The new year is a great time to create a financial plan and to set
financial goals.
“For most people, personal finance is not the most exciting
topic to think about come January 1, but it is one that individuals
must continually address and strategically tackle. By setting
attainable goals each year, you can start taking charge of your
finances, and be better poised for financial success,” said
Margaret Paddock, Twin Cities market leader of The Private Client
Reserve of U.S. Bank. “Your goals should resonate with you and
align with your priorities – retirement, education, a new home or a
family vacation – everyone’s goals will be different. Throughout
the year you should track your progress, and you will soon develop
new healthy financial habits.”
Paddock is part of the U.S. Bank Coaches program, which is a
team of experts offering practical insights and advice on relevant
and important financial topics.
Before the 2015 New Year’s Eve ball drops in Times Square, she
counts down some financial tips to kick off 2016.
10) Order your free credit report. You should regularly
check your report to be sure it’s accurate. A lower score can cost
you!
9) Rebalance your investment portfolios. Fluctuations in
the stock market may have you owning too much or too little in
various funds or sectors.
8) Get automated. Now is the time to move all of your
finances online or set up automatic payments. Most of your regular
monthly payments can be scheduled for you. It is also a great time
to set up an automatic transfer to a savings or brokerage
account.
7) Re-check debt. Take a look at all of your debt. Check
car loans, mortgages, lines of credit, and credit cards. You may be
able to find more favorable terms or rates to save you money in
2016.
6) Review your estate planning. Make sure all your
documents still align with your wishes. And if you don’t have this
yet created, you can start building it now.
5) Examine 2015 charitable giving. Determine whether
making additional charitable gifts may be beneficial from an income
tax perspective. If possible, make gifts using appreciated stock
that you've held for more than one year to avoid incurring capital
gains.
4) Check with your employer to determine whether you have
maximized your 401(k) contributions. If not, consider
making additional contributions by year-end to reach your maximum
annual contribution amount (for 2015 and 2016 $18,000 per year and
a $6,000 catch-up contribution if over age 50).
3) Don’t forget your RMD. If you are age 70½ and
older and have a qualified retirement plan such as a 401(k) or IRA,
make sure that you have taken your required minimum distribution
(RMD) prior to year-end. If you anticipate that you will never need
the income to support your living expenses, consider converting
your 401(k) or IRA to a Roth IRA, which does not require RMDs.
2) Care for the elderly. With the aging population,
eldercare planning is becoming vitally important. Consider
reviewing your or your parents’ durable powers of attorney and
health care directives to ensure that they include language about
gifting to protect against possible elder abuse. Also, if there is
a health decline, make sure that assets that have significantly
increased in value are not given away inadvertently as those assets
will receive a basis step-up at death.
1) Check Social Security benefits. Be aware that
the Bipartisan Budget Act of 2015 made significant changes to two
popular Social Security claiming strategies and created three sets
of rules based on one’s birthday. The “File-and-Suspend” strategy
will be phased out by April 30, 2016 (must be 66 by May 1, 2016)
and the “Restricted Application for Spousal Benefits” Social
Security option will no longer be available for those born on or
after Jan. 2, 1954. The “File and Suspend” strategy can still be
used to fix a “mistake” of taking benefits early by suspending
Social Security at full retirement age and restarting it at a much
higher level at age 70 (no one can collect benefits during the
suspension period). The new rules also takes away the ability for
those faced with a change of circumstances (serious illness) to
receive a lump sum payment in lieu of receiving delayed retirement
credits for the period that Social Security was suspended. Although
the popular claiming strategies are going away—planning
opportunities still exist.
So while you are making your 2016 New Year’s resolutions,
remember these top 10 tips and be prepared to celebrate your
renewed financial health as you track your progress throughout the
year.
About The Private Client ReserveThe Private Client
Reserve serves individuals and families, business owners, including
corporate executives, professionals and others who have complex
financial interests and needs. Key services include investment
management, private banking, trust and estate services and wealth
planning. The Reserve is committed to providing consistent
high-quality advice and individualized attention. For more
information, visit reserve.usbank.com
About U.S. BankMinneapolis-based U.S. Bancorp (NYSE:USB),
with $416 billion in assets as of September 30, 2015, is the parent
company of U.S. Bank National Association, the fifth largest
commercial bank in the United States. The Company operates 3,151
banking offices in 25 states and 5,001 ATMs and provides a
comprehensive line of banking, investment, mortgage, trust and
payment services products to consumers, businesses and
institutions. Visit U.S. Bancorp on the web at www.usbank.com.
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