Strategic Investment Moves to Consider Before Year-End
The end of 2024 is upon us and we’d like to remind you of some strategic investment moves.
1. Be sure to take all your Required Minimum Distributions (RMDs)
Generally, taxpayers age 73 or older must take minimum distributions from their tax-deferred retirement accounts by the end of the year. (Individuals who reached RMD age in 2024 have until April 1 to take their first distribution.)
2. Maximize contributions to your workplace retirement plan
First and foremost, if your employer matches contributions, be sure to contribute enough to your tax-deferred workplace retirement plan to get the full match amount. That said, consider contributing the maximum allowed—$23,000 ($30,500 if age 50 or older) in 2024 for 401(k)s and similar plans—if you have the means. Not only can this help reduce your taxable income for the current year and boost your overall savings, but doing so can also be a great tax-planning strategy if you think your tax rate will be lower in retirement than it is today.
On the other hand, if you believe your tax rate will be higher during retirement, funding a Roth account could be a better strategy. If your employer offers the option and you haven't already maxed out your traditional 401(k), you can make after-tax contributions to a Roth 401(k) up to the $23,000 limit ($30,500 if age 50 or older), minus whatever you contributed to your traditional 401(k).
3. Help out your loved ones with tax-free gifts
In 2024, you can give away up to $18,000 ($36,000 if married) per person to an unlimited number of people without eating into your lifetime estate and gift tax exemption. This won't reduce your taxable income for the year, but it will allow you to strategically transfer wealth to your heirs, tax-free.
4. Make College 529 deposits
Don’t forget to make contributions to your children’s or grandchildren’s 529 plans. Some states allow for a state tax deduction on your contributions each year.
We're here to help you incorporate any year-end tax updates. Contact us at 215-579-5601.
And, as always, if you have any life changes or updates (i.e., new job, promotion, marriage, new baby, new grandchild, etc.) that may affect your current insurance and investing strategy, please call us at 215-579-5601.
Stacy Brilliant, Chief Operating Officer
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