It is the most wonderful time of the year — time to go through your end-of-year financial and retirement planning checklist. We understand that you might have much more pleasant and enjoyable things on your to-do list during the holidays. However, it is important to take time to make sure that your finances are in sync with your future retirement plans. Because you cannot take advantage of some financial moves after the first of the year, our lawyers suggest that you review your financial plans now and consider making an appointment with one of our Michigan retirement planning lawyers.
A Few Retirement and Financial Planning Tips for 2017
Below are just a few of the retirement and financial planning areas you might want to review for 2017.
- Fully Funding Your Individual Retirement Accounts
Taking advantage of funding your Individual Retirement Account (IRA) before the end of the year helps you plan for retirement and may help you at tax time. Almost anyone under the age of 70 ½ at the end of 2017 can fund a traditional IRA. However, funding a Roth IRA is a bit more complex because of the statutory maximum income levels and the annual income test. Our Michigan retirement planning attorneys can help you plan your IRA contributions to maximize the benefits to you and your family. In addition to your personal IRAs, you also may want to consider funding a Roth IRA for a child. Also, do not forget that you can play “catch up” if you turned 50 during 2017. Under this provision, you can deposit additional funds into your IRA.
- Required Minimum Distributions
When you reach 70 ½ years of age, you are required to begin required minimum distributions (RMD) from your IRAs. Roth IRAs are not subject to the RMD. If you have not taken your RMD for 2017, you have until April 1, 2018, to take an RMD for 2017. However, postponing a distribution until next year could significantly impact your marginal tax rate for 2018. If you have questions about IRA distributions, call our Michigan retirement planning attorney to discuss your options and the best option for your financial situation.
- Education Savings Accounts
Education Savings Accounts (ESAs) can offer tax benefits in addition to saving for your child’s or grandchild’s college education. For example, you have until April 1, 2018, to fund a Coverdell ESA. The maximum contribution to a Coverdell ESA for 2017 is $2,000, provided your household income is less than $110,000 or $220,000 for couples filing joint tax returns. We can help you choose ESAs that provide the best benefits for you and your loved ones.
- Gifting Strategies
Gifting to your loved ones can be a good strategy to reduce estate taxes. However, you must be careful not to exceed the maximum annual amount to any one person. If you are searching for another option to gift income or property, you might want to consider a gift through a trust. Our retirement planning attorneys can discuss several options that might work well for you and your family.
- Charitable Giving
Charitable giving is another useful tool if you need to reduce taxable income. You can give cash or property to various charities, appreciated stock, or a donation from an IRA. You might also consider setting up a Donor Advised Fund or a Private Foundation for charitable giving.
- Maximize Company Retirement Plan Contributions
In some cases, it might benefit you now and in the future to contribute additional funds to your employer-sponsored retirement plan. For example, if you know you will receive a year-end bonus, you might want to direct all or a sizable portion of the bonus to be deposited into your 401(k) account. By doing so, you can increase your retirement savings and decrease your taxable income for 2017.
- Review Health Savings Accounts and Flexible Spending Accounts
Be sure to check your Flexible Spending Account (FSA) to ensure you have used the funds so that you do not lose these funds at the end of the year. Also, it is a good idea to review your Health Savings Account (HSA) and your health insurance to determine if you need to make any changes for 2018.
- Estate Planning
Estate planning is a vital element of retirement planning. If you do not have an estate plan, you need one. Our Michigan estate planning attorneys can help you devise a plan that ensures your desires are carried out after your death or incapacitation.
- Plan for 2018
It is never too early to begin financial planning for 2018. Our retirement planning lawyers can help you devise a plan for 2018 that meets your current objectives and sets you on a path to meet all long-term goals.
The above suggestions are only a few of the areas that you need to review. Our attorneys can help you review all financial issues to ensure you are on track with your finances and retirement plans.
The Elder Care Firm of Christopher J. Berry, CELA
Contact our office at 888-390-4360 or use the contact form on our website for more information or to schedule an appointment.