You’ve probably heard that most New Year’s resolutions end up in the bin of regret, with few people who make them actually following through.
To have a successful year, resolutions alone aren’t enough, especially when it comes to making a personal financial plan. Unlike a resolution, which tends to be a (short-lived) test of willpower, a plan has specific goals and tangible strategies to turn your aspirations into reality. Consider a detailed quarterly strategy for your money—one that highlights key dates, important tasks and handy reminders. These tips can help you manage your money wisely in 2018.
Remix: As you’re planning 2018, be sure to examine your portfolio’s asset allocation mix. If it needs to be rebalanced, take care of it now.
Tax time: If you’re self-employed, your final estimated tax payment for 2017 is due January 16. While you’re at it, note the dates that quarterly payments are due for 2018 on your calendar and set alerts.
Use it or… If there’s money left in your 2017 health care flexible spending account (FSA), you may have until March 15 to spend it—or forfeit it. Check with your employer for details. Not that an FSA is different from a health savings account (HSA). In an HSA, your money carries over, so you don’t have to spend it in any particular year.
Pay yourself: If you have a traditional IRA, turned 70½ at any point in 2017, and haven’t taken your first required minimum distribution (RMD), do so before April 1 to avoid a hairy 50% penalty. (You’ll have to take another one by December 31.) And if you have a 401(k)—unless you’re still working with the same 401(k) account employer—the same rules apply to it.
File it: Tax returns are due on April 17. Even if you’re requesting the six-month extension, pay what you owe today—otherwise you could face penalties and interest later.
More deductions: Remember that April 17 is also the last day to make a contribution to an IRA for the 2017 year.
Policy check: Review your home, auto and life insurance policies. Life events such as divorce, remarriage or illness could require you to adjust your coverage. Talk to an agent before you get distracted by summer travel to make sure you’re getting the proper policy at the best price.
Social Security check: Review your Social Security benefits statement and check for errors. Social Security bases your payout on the 35 years when you earned the most. If your earnings aren’t reported correctly, you won’t receive all the benefits you’re entitled to.
To your health: Each fall, employees can tweak their contributions to health savings accounts (HSAs) and flexible savings accounts (FSAs). Confirm your employer’s open-enrollment period (it varies from company to company) so you can get the most from these pretax plans.
Savings reminder: If you’re self-employed and paying estimated quarterly taxes on September 15, make sure that you’re also on track to contribute the maximum to your retirement accounts. Calculating the allowable amount for your SEP-IRA can be complicated, however, so you may want to consult a tax professional.
Take credit: Get free copies of your credit reports from the official site authorized by federal law. A little credit housekeeping now can set the stage for better rates on a home, car, business loan and more later.
Time’s up: If you requested an extension on your taxes, October 16 is the last day to file returns.
Your legacy: Before the end of the year, organize your estate planning documents. A living will (also called a health care directive) gives instructions for your care in case you’re unable to make those decisions yourself.
Changing names: Review the beneficiaries on your retirement accounts and make any necessary changes that might be triggered by a divorce or remarriage.
Do good: Make tax-deductible contributions to your favorite charities before the holidays distract you. Also, be sure to take advantage of the annual gift tax exclusion for personal gifts to loved ones.
As you map out your plan for the year, make sure it’s customized to suit your needs and goals. This calendar, just like your finances, can’t live in a “set it and forget it” space. Stay on top of deadlines with phone or email reminders, and adjust your plan as curveballs (say, planning a child’s wedding) inevitably come your way.
What you can do next
- Financial planning doesn’t have to be stressful. Spreading out tasks can help you manage your finances more effectively and bring you closer to achieving your goals. All it takes is a proactive strategy. Reach out to a Schwab Financial Consultant, or learn about creating a customized financial plan and investment portfolio with Schwab Intelligent AdvisoryTM.
- Visit a Schwab branch or call us at 800-355-2162.
- View more tax-related content by visiting the Schwab Tax Center.