You know how setting up a system that is intended to save you lots of time always takes less time than you thought?
The Washington Post’s recent article, “Got an hour? Chalk up 4 quick financial wins,” gives us a couple of financial tasks that could save you a lot of money and stress in the future. Each of these can also be accomplished in 15 minutes or less, once you’ve decided on a plan and have your information ready.
Adjust Your Withholding. With the tax reform legislation passed last year, you should look at the new tax brackets and the elimination of deductions. It could mean that you’re withholding too much or too little. Don’t wait for April for an unpleasant surprise: do this now!
Draft Powers Of Attorney. You should have at least two estate planning documents. You grant the authority to those you name to make decisions for you, if you become incapacitated. With a medical power of attorney (also known as an advance health care directive), name your toughest advocate—the person who’s devoted enough to carry out your wishes and stand up to doctors or any of your relatives who disagree. With a financial power of attorney, you designate the individual who’s good with money and extremely ethical. You should also name backups to both positions.
Start College Saving. If you have children, they’re going to need some schooling or post-secondary training to succeed. Consider a state-run 529 college savings plan to save. You don’t have to use your own state’s plan, so if you don’t qualify for a tax benefit in your own state, look at one of the plans Morningstar named as best in the country. These were Illinois’ Bright Start Direct-Sold College Savings Program, Nevada’s The Vanguard 529 College Savings Plan, Utah’s my529 and Virginia’s Invest529 plan.
Roll Over A Retirement Account. Is your current 401(k) plan better than the one you had at your old job? If so, ask if they’ll accept a rollover from the previous account. Ask for help and let them guide you through the process so you don’t make any expensive mistakes.
Don’t overlook another option. You are allowed to roll that old 401(k) into an IRA, which may have more investment options. You should also ask for help with these transactions. They can be complicated, and mistakes can be costly.
Reference: Washington Post (September 10, 2018) “Got an hour? Chalk up 4 quick financial wins”