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Your fall financial checklist

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Autumn is the perfect time to tackle the financial tasks you’ll want to complete by year’s end to benefit from any potential opportunities — and avoid missing any deadlines.


Open enrollment

Your company’s annual open enrollment period (generally occurring in the fall) is usually the one time of the year that you have the option to enroll in benefits for the first time, make changes to your current plans or coverage amounts or drop coverage completely without having to prove that you’ve experienced a change in status (such as loss of coverage, marriage, birth, adoption, etc.). Because these decisions have a significant financial impact, it’s important to review your options carefully.

Select health coverage that meets all of your needs. For most of us, health insurance represents the largest component of our benefits package, so thoroughly examine the coverage and features of the plans offered, as well as the costs. It’s not unusual for premiums to go up or for employers to regularly change plan providers, so the coverage you have this year may not be the same next year. Beyond looking at your own coverage, be sure to check what your spouse’s benefits may provide. Just because you enrolled in your employer’s plan this year doesn’t mean that’s the best course of action for next year. It might make better sense to switch to your spouse’s plan.

Consider enrolling in a health savings account, if available. If you determine that a high-deductible health insurance plan is most appropriate for coverage, you should consider contributing on a pretax or tax-deductible basis to a health savings account (HSA), provided that you meet the eligibility requirements for an HSA. From paying your health plan deductible to buying braces to getting reimbursed for prescriptions, your HSA allows you to cover qualified out-of-pocket medical expenses on a tax-free basis. If you don’t need the money for current expenses, you can let it accumulate and use the money tax-free for future qualified healthcare expenses in retirement.

While medical coverage might be top of mind during open enrollment, don’t forget your retirement plan; your employee 401(k) contributions are typically pre-tax payroll deductions, and if your employer offers a matching contribution, take full advantage by contributing at least enough to get the full match.

Take into account all aspects of the available plans. You should not only take into account the premiums (which you may be able to pay on a pre-tax basis, which may in turn decrease the payroll tax you pay), but you should also compare deductibles, copays and out-of-pocket limits. A lower premium may seem like a big savings, but you could end up paying more if the deductibles, copays or out-of-pocket limits are higher.

In addition to identifying the plan that is the best value for the coverage required, you should also be familiar and comfortable with the associated healthcare providers. If your existing medical team or other local professionals are not participating in the plan, you may need to change doctors or have to travel a greater distance for care that is fully covered by your medical benefits.

Don’t forget your 401(k). While medical coverage might be top of mind during open enrollment, don’t forget your retirement plan. Most 401(k) plans allow you to make changes throughout the year, but open enrollment is a great time to take a good look at your retirement benefits, especially if it’s been a while. First, make sure you’re participating in the plan. Like health-care premiums, 401(k) contributions are typically pretax payroll deductions,1 and if your employer offers a matching contribution, take full advantage by contributing at least enough to get the full match. It’s also a good time to carefully review your investments. It may be time to adjust or "rebalance" your portfolio to bring it back to your intended asset mix. That could mean putting more of your future contributions toward investments that have lagged behind, or shifting some of the money in the investments with an over-allocation to those that need a boost. Not comfortable with making investment decisions? See if your plan offers an investment service or tool to help you manage your retirement plan account.

IRAs and RMDs

Contribute to an IRA to help maximize potential growth. If you’re planning to contribute to an IRA before the April tax deadline, consider doing so now. Check out this year’s maximum contribution limits for traditional and Roth IRAs.here.

Take any required minimum distributions (RMDs) from retirement accounts to avoid additional taxes. You generally have to start taking withdrawals from your traditional IRA or qualified retirement plan account2 when you reach age 72.3 Visit irs.gov or speak with a tax professional for more information.

Saving and investing

Review your progress on your financial goals to help ensure that you are on track. You may have made some financial New Year’s resolutions at the beginning of the year, such as ramping up your retirement contributions or using online bill pay to meet your monthly obligations more efficiently.

Take advantage of new savings opportunities. If you succeeded in paying off a loan this year, keep your budget lean by redirecting those payment dollars toward your savings. And depending on your salary, you may already have paid the maximum Social Security tax for the year (see for details). If so, put the extra money that’s now in your paycheck into increased contributions to your 401(k) or an emergency fund, or use it to pay down debts.

Review your progress on your financial goals to help ensure that you are on track. You may have made some financial New Year’s resolutions at the beginning of the year, such as ramping up your retirement contributions or using online bill pay to meet your monthly obligations more efficiently. Check your progress on these, and decide if they still work for you.

Taxes

Manage your tax liabilities to retain more of your income. Determine whether you’re withholding too much or too little in taxes. Too little could mean you’ll owe more than you expected at tax time (and potentially be subject to penalties), and too much may tie up cash that could be invested or used to pay down debt. If you expect your income to be higher this year than next, you might start considering whether you can take additional deductions to reduce the amount of your tax liabiltity. If you itemize deductions, consider making your January payment on your mortgage before year’s end which may enable you to deduct the interest this year.

Make major gifting contributions now to maximize the benefit. Whether you’re donating to a charitable organization or gifting assets to your relatives by contributing to a college savings account, consider transferring those assets before the end of the year to make the most of your annual federal gift tax exclusion and take any eligible deductions.

Organizing and records

Take care of health expenses and appointments. If you’ve allocated funds to a healthcare flexible spending account (FSA), be sure to check your employer’s rules for these accounts, because many FSAs require that you use the money you contribute within the calendar year. Also, your insurance plan deductible likely resets at the beginning of the year, so make the most of your benefits by scheduling doctor appointments and taking care of other medical needs before the end of the year. Remember, appointments can be difficult to schedule on short notice, so make them now.

Make sure your account beneficiaries are up to date. Check the beneficiary designations on your banking, retirement and investment accounts and life insurance policies, and update them to reflect any significant changes that may have occurred during the year, such as a marriage, birth, divorce or death.

Get your financial house in order. Organizing your papers and accounts can leave you better prepared for the upcoming tax season and lets you evaluate whether you’re on track with your financial goals. Consider speaking with a tax professional if you have any questions.

At the very least, checking these items off your to-do list can help you be more organized and give you a sense of accomplishment, which is a good end to any year.

Learn more and take action

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    1Federal Taxes are due upon withdrawal and you may also be subject to a 10% additional federal tax if you take a distribution prior to age 59½, unless an exception applies.

    2If you are still working at 72, you may not have to take RMDs from your employer's qualified retirement plan, such as a company 401(k), until the year after you retire (unless you are a 5% owner).

    3The required beginning date for RMDs is age 72. You may defer your first RMD until April 1 in the year after you turn age 72, but then you’d be required to take two distributions in that year. Failure to take all or part of an RMD results in a 50% additional tax applicable to the amount of the RMD not withdrawn. Consult your tax advisor for more information on your personal circumstances.

    This material should be regarded as general information on healthcare considerations and is not intended to provide specific healthcare advice. If you have questions regarding your particular healthcare situation, please contact your healthcare, legal or tax advisor.

    Merrill, its affiliates, and financial advisors do not provide legal, tax or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.

    *The app is designed to work with most mobile devices in most countries. Carrier fees may apply.

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