Get Your Financial House in Order
Dear Clients,
As we enjoy the slow bake of summer in Texas and around the US, make your indoor time count. Here are some items you can do to get your financial house in order:
1) Ensure you have downloaded your SSA benefits statement and provided to your financial advisor. If you do not have a Social Security online account, please sign up for one here: https://www.ssa.gov/myaccount/. Remember to sign in and review your SSA benefit statement every year to ensure your earnings history is accurate!
Thinking of taking SS benefits in the next 3 – 5 years, speak with your financial advisor or SS benefits advisor. Here is someone we have used:
David Zander, CFP
Backnine Financial Investments
2) Review your annual credit bureau reports to ensure all information is up to date and accurate. This is where you can access the report (the official website): https://www.annualcreditreport.com/index.action
3) Schedule your bi-annual financial review with your financial advisor. Now is the time to review your unrealized gains and losses and develop a tax plan to harvest them.
4) Review your current employer retirement savings plans. Can you increase your deferrals into the plan, change your elections between 401K and Roth 401K. The bare minimum to put in would be what is needed to get the full match from your employer, if they match.
5) Review your health expenses and expectations and see if a High Deductible Health Plan for 2025 makes sense for you and your family so you can start saving into an HSA.
6) Turning 50 in 2024, you are eligible to make the “catch-up contribution” to your 401K plans and IRA’s even if your birthday is 12/31/2024.
7) Turning 55 in 2024, you now are eligible for “catch-up contribution” to your HSA. Start the increase now! NOTE: most HSA banks allow you to invest your HSA money in the stock market giving your market returns on the investment. Check it out.
8) Turning 59 ½ in 2024, you have the opportunity to move your 401K money to your IRA’s. Not happy with the returns in your employer’s 401K account? If your Employer’s plan allows an in-service withdrawal, and most do, you can move money out of your unmanaged 401K account into your IRA’s which should be managed by your financial advisor. You may be able to double your returns on the money. Granted, you normally don’t pay fees to your 401K plan and you may be subject to management fees by your financial advisor but those fees may be negotiable depending on the amount you are permitted to move.
NOTE 1: JCA recommends you do a direct rollover of the money to the IRA and not take a check distribution as you will need to deposit the check within 60 days and the 401K will report the distribution as taxable. We would need to report the rollover on your next tax return to avoid taxation. Direct rollovers are generally not reported to the IRS and if they are, they are shown as non-taxable.
NOTE 2: If you are under 59 ½ in 2024, you can still do an in-service withdrawal, if your employer’s plan permits, but you can only withdraw the employer’s contributions and earnings to the IRA. Your deferral must stay in the 401K until you reach 59 ½ or your will pay a 10% penalty.
9) Received a raise, bonus, get a second job or second income in the household or other income in 2024 which you did not have in 2023, maybe you sent up a time for us to talk to review your current withholding from your paycheck. Making more money in your business in 2024 than in 2023; we should talk about adjusting your 9/15 and 1/15 ES tax deposits.
10) Own your business or are self-employed, now is the time to catch up on your income/expenses, tax summaries.
Are your receipts all saved and readily available?
Bank Accounts/Credit cards reconciliation up to date?
Is your mileage log up to date?
JCA is enjoying summer hours from Memorial Day to Labor Day. Office is closed on Fridays.