5 Tips for a Head Start on Your 2024 Finances
Article written by Scott M. Kahan in Stroll Chappaqua - January 2024 Magazine
It’s a new year, and whether you make resolutions or not, now is the perfect time to put your finances in order for the year ahead. Don’t put this off. Tackling a short list up front will set you up for financial success so you can stay on track to meet your goals. Here’s where to start.
FUND YOUR RETIREMENT ACCOUNTS
Make sure you’re fully funding your retirement accounts. Contribution limits for 401(k) and,403(b) plans for 2024 increased to $23,000 for individuals or $30,500 if you’re 50 or older. If you’re funding at the same percentages as last year, you might be underfunding. Adjust your plan to maximize your contributions.
TAKE SMARTER RETIREMENT WITHDRAWALS
As of 2023, age 73 is when you have to start taking your Required Minimum Distribution (RMD) from an IRA. If you make contributions to charities, consider a Qualified Charitable Distribution (QCD): donating up to $100,000 of your IRA distribution. Doing this reduces your taxable income and works exceptionally well if you don’t itemize on your tax return.
If you’re not 73 and still want to make a charitable contribution through your IRA withdrawal, you can,provided you’re over 70.5. Review the rules carefully
with your accountant or Certified Financial Planner™ professional to see if it makes sense for you.
DO INCOME TAX PLANNING
Now that you’re starting to get your 1099s and W-2s, it’s a good time to do tax planning for 2024. Gather your documents and begin preparing the necessary paperwork for your accountant. Often, people wait until the last minute to do their taxes. Start early and see if you are due a refund or owe money. Make changes to your withholding or estimated taxes as needed. Take care of this now, and you will be better prepared for 2024.
TEND TO COLLEGE SAVINGS
If you have children or grandchildren, fund a 529 College Savings Plan, an investment account that helps you save for higher education while offering
significant tax benefits. The money you invest in the New York state plan (nysaves.org) is deductible from your New York state tax return—up to $5,000
annually if you’re single and $10,000 if you’re married. Start funding it early in the year to take full advantage of tax fee growth.
REVIEW YOUR PORTFOLIO ALLOCATIONS
If you haven’t reviewed your allocations recently, now is a good time to rebalance your portfolio so you’re invested to meet your goals. Don’t get caught up trying to figure out what the market will do in 2024. We’re in an election year and market predictions are all over the place. Make changes based on what your target allocations should be and stick to them. Block out all the noise. With a little planning now, you’ll start the year strong.