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4 Money Tips for the New Year


4 Money Tips for the New Year

January is the time to look forward to how you’ll make your life more financially secure in the New Year.  Whether you are working or retired, these four tips will help you get off to a financially smart year:


Healthcare Costs– A New Year means a deductible reset so most of us will have out-of-pocket costs in the early months of the year.  And remember, your co-insurance rates on healthcare services and prescriptions may have changed from last year so check before you go to the doctor or pharmacy to see what your new costs will be.

 Medicare Part A and Part B deductibles and co-pays for 2017 are listed here.

 If elective surgery is on your calendar for this year, get it done early in the year so you’ll be more likely to complete post-surgery follow-up appointments and prescriptions without having to pay another deductible.


Raise Your Savings

If you are starting the New Year with a raise, first reward yourself with an increase in your savings whether for an emergency reserve (you should have 6 months of expenses in a liquid account) or increasing retirement savings by upping contributions to your 401K or IRA.  Always make sure that you are contributing enough to receive the full match from your employer if there is one. Try to set aside 15% or more of your income for retirement.


Reducing Debt

Whether it is credit cards, auto loans, student loans or a mortgage, more of us are carrying more debt. In 2016, the typical household carries $16,061 in credit card debt and $49,042 in student debt, according to NerdWallet

 Make this the year you tackle your debt and reduce the amount you are paying to financial institutions to carry that debt. Set a specific amount for how much you will pay and when.  The U.S. Federal Reserve interest rate hike of 0.25 in December, 2016 means that credit with a variable interest rate will cost you more.  And we are likely to see more rate increases as the year progresses so your cost of credit could be even higher.


In Retirement


Turn 70 ½ this year and have IRAs?  Then you’ll need to plan for taking your required minimum distribution (RMD).  This is a calculation you’ll want to make sure you get right because the penalty is 50 percent tax on the amount that was not taken out as required! The IRS provides worksheets and your tax professional or financial advisor can help you determine the timing and the amount.

Most of us fail to save more – spend less when we set New Year’s goals that are too vague or unreachable. Start with a few specific things that you can do to get your new year off to a great financial start.

3 Tips on Health Care Costs in Retirement
Medicare Costs in 2017

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