Here are the last minute money moves to make as 2024 comes to an end.
Transcript:
CONWAY GITTENS: So what are some of the year end moves we should be making in order to set us up for a good new year?
LAZETTA BRAXTON: I really encourage people to take a look at their paycheck and see what they have contributed to their retirement accounts year to date, we’re getting close to the end of the year, so it may be difficult to reach those limits. So I’ll share what the limits are for 2025. So for everyday 401(k), 403(b), et cetera, retirement plans and individual can contribute up to $23,500 for 2025. So now check with your payroll department. If you are on 26 pay periods, you can divide that amount over the course of the year and start setting a goal. If you can’t reach the $23,500, at least what it is for next year. The other idea is, for those who are age 50 or older. You get a catch up contribution as well too. And now with the new law, for those who are 60 to 63, you can have a catch up of up to $11,250. I know these sounds like big numbers, but it’s good to have goals and work towards them. And then for those who are eligible for IRAs, that’s another way to invest. But that’s based on your adjusted gross income.
CONWAY GITTENS: If there are big numbers but there are only big numbers if you don’t make them digestible. If you take a look at your paycheck and say, OK, this is the goal that I want to make at the end of the year out of every paycheck. It is this amount. It is actually may not be that daunting of a challenge. If you look at it. This is how much money I need to take out of my paycheck every paycheck.
LAZETTA BRAXTON: Yeah, and that’s why I said no. How many pay periods you pay. Some people pay monthly. Some people pay twice a month or the typical 26 pay periods in a year. So if you take that number, let’s say $23,500, it’s roughly like seven. I mean, $900 a pay period. And why have people look at that paycheck. Because they usually are contributing based on a percentage, so they have no idea what that dollar amount equates to. So you’re right. Bite size pieces per paycheck. Know what that dollar amount and keep moving towards those annual IRS limits.
CONWAY GITTENS: Are there any more retirement planning tips or tools that we should be looking at. Besides that, as we head into the end of the year and going to the beginning of the new year?
LAZETTA BRAXTON: Now, I mentioned the IRAs that you can invest in. The nice thing about those is that you can contribute up to the tax filing date of April 15. When we’re talking about employer plans, that is a hard stop at the end of the year 12/31 pay period. Some investors are also looking at ways that they can sell some securities or stocks that haven’t done so well. So they’re taking the loss and applying it to some of the capital gains that they may have incurred by holding ETFs in the exchange traded funds. So that’s called tax loss harvesting. That could be a great strategy for investors as well too.
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