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As the end of the year approaches, the time comes to evaluate your retirement plan and amend any lapses where you didn’t take advantage of what was available to you. It is key to audit your retirement plan and make any changes or new contributions before the year comes to an end, as you could stand to miss out on financial benefits and added security when you retire. Here are a few strategies to employ if you haven’t already.

Max Out Your 401(k) Contributions

The deadline for 401(k) contributions is the end of the year. For individuals below the age of 50, the contribution limit for 2020 is $19,500; anyone over the age of 50 can make an additional $6,500 catch-up contribution. Contributing to your 401(k) not only helps prepare you for your future; it can also decrease your tax bill.

Take Advantage of CARES Act Provisions

Individuals over the age of 72 are typically required to take distributions from their 401(k) plans on an annual basis, risking penalties if they fail to do so. However, a CARES Act provision allows retirees to skip minimum distributions this year. Retirees who do not need the extra money should leave their retirement funds alone, as this will save them money when it comes time to file their taxes and will ensure they have a larger fund to draw from in the future.

Keep Contributing to Your IRA

While contributions to your 401(k) are due by the end of the year if you want to count them on your 2020 taxes, you can keep contributing to an IRA until April 15 of 2021. You will need to indicate that contributions made after the start of the new year are for 2020 for them to be counted when you file your taxes.

Make Some Charitable Donations

Prior to the end of 2020, you may consider contributing to charities; the CARES Act allows individuals to claim a higher amount of charitable donations on their taxes for 2020, and these donations can be deducted from your tax bill when you file. Those with an IRA can also directly withdraw funds from their IRA and donate them to charity; this is considered a QCD (Qualified Charitable Distribution) and can count towards your minimum distribution, so individuals who have already withdrawn funds from their retirement accounts can deduct these direct donations from their taxes when they file next year. Keep in mind that there is an age requirement of 70 ½ years to request a QCD.

Securities offered through Kalos Capital, Inc. and Investment Advisory Services offered through Kalos Management, Inc., both at 11525 Park Woods Circle, Alpharetta, GA 30005, (678) 356-1100. Retirement Income Strategies is not an affiliate or subsidiary of Kalos Capital, Inc. or Kalos Management, Inc.