As the snow melts away and the days get longer, the phrase “spring cleaning” works its way back into our vernacular. The annual ritual of window washing and basement decluttering begins anew.  We can’t help but embrace the spring cleaning idea in financial advising. Here are five things to review in your financial life:

  • If your employer offers a retirement plan such as a 401k or 403b, please review your contribution amounts as well as your company’s match if one exists. Make it a 2018 goal to contribute enough income to your company plan to at least get the full match if available. The contribution limit for 2018 was increased to $18,500, while individuals age 50 and older can contribute a maximum limit of $24,500.
  • The IRA limits were left unchanged for 2018. The contribution limit is $5,500, with individuals age 50 and older eligible to make a $6,500 contribution. However, the Roth IRA income limit did increase. Feel free to contact us to discuss how the Roth IRA income limit applies to your personal situation.
  • If you receive a tax refund in excess of $1,000, you may want to review your withholding elections with your payroll office. While some people like receiving a refund larger than $1,000, it will affect the efficiency of your financial plan as we are essentially giving the government an interest-free loan.
  • The Tax Cuts and Jobs Act is now in effect and will influence the decisions we make in 2018 and beyond. We are recommending that people be proactive in their planning as the legislation is far-reaching. We suggest meeting with your financial advisor to better understand how the law impacts your specific situation.
  • Analyze your debt situation to get a better handle on the interest you are paying as well as the effective term.  An area of debt management that is often overlooked is determining the duration of variable rate, revolving debt. For example, most people have no idea how long they will have to pay on their home equity loan before it is paid in full.  

This is a great time to take a fresh look at your financial plan for 2018.  A little effort in March will set your mind at ease for the busy summer months to come.