| November 07 2011
Last week, we reviewed five things you can do before the end of 2011 to make sure your financial life is under control. Today, we offer six more tips to consider.
Take advantage of all employee benefits. Review the benefits offered by your employer and make sure you're taking full advantage of all your available options. Most people are aware of the savings that come from employer-sponsored health, dental, and life insurance, but be sure to look at additional benefits, such as flexible spending accounts for health and childcare, or tax-free transit benefits.
Save for retirement. Employer-sponsored 401(k)s or other retirement plans allow you to contribute pre-tax dollars to save for retirement. In addition, many employers offer to match your contributions, up to a certain percentage. Outside of work, consider contributing to either a traditional or Roth IRA.Convert to a Roth IRA. Tax-deferred retirement savings vehicles offer many advantages, but one disadvantage is that you'll be taxed on distributions when you retire. Roth IRAs allow you to make after-tax contributions now in exchange for tax-free distributions in the future. If you have a traditional IRA, you may want to consider considering converting it to a Roth. You'll have to pay taxes now, but distributions in retirement will be free of tax. In addition, Roth IRAs don't require withdrawals, so you may be able to preserve your account and pass along tax-free income to your heirs.
Conduct an insurance review. Don't make the mistake of being under- or over-insured. Since your insurance needs change over time, coverage that may have been sufficient a few years ago may need to be updated. Conduct a thorough insurance review and make sure your various policies provide the coverage you actually need.
Update your will. If you have an existing will, take the time to review it to make sure that it still expresses your wishes. Also be sure to consider revised estate tax laws and how they might affect you and your family. If you don't have a will, now is the time to create one, as well as to have a power of attorney document drawn up in case you are in a position where you can't manage your own finances.
Get (and stay) organized. All the financial planning tips in the world won't help you much if you can't stay organized. Maintain accurate records, make copies, and keep track of where everything is. Having a clear system for monitoring your financial situation will help you both get and stay organized.
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