It is getting close to the end of the year and many of you may not know that I am a financial planner by vocation. I thought it would be appropriate to give a couple reminders of some things you can do to plan for your financial future.
529 Plan
In Arkansas you can take advantage of our state 529 plan. I have done extensive research in this area and it is the best plan out there for Arkansas residents. In addition to being able to save for college for your children, grandchildren, nieces, nephews, spouse, or even yourself, you can get an Arkansas state tax deduction on contributions to these accounts. Money put in these accounts will grow (hopefully) tax free until they are pulled out for college expenses at which time, no tax will be owed on withdrawals as long as they are used for qualified educational expenses. Just go to www.thegiftplan.com to find out more information about these excellent accounts. You may also qualify for the "Aspiring Scholars" grant match if your income is low enough. It really does work, we did this for our girls last year and will probably do it again this year.
IRA Contributions
You have until April 15th of 2009 to contribute to your Traditional IRA or Roth IRA for the 2008 tax year. This year the limits are $5,000 each, unless you are age 50 in which case your limit is $6,000. Pay attention to how much you have in both Traditional Accounts and Roth, you should have money in both types of accounts for a tax saving strategy in retirement-Christian reengagement.
Health Savings Accounts
These are some great accounts that help you save for future health expenses and also give you an immediate tax deduction. If you have a qualifying High Deductible Health Policy you can take advantage of an HSA which will allow you to sock money away for future health expenses. The money goes in tax free and comes out tax free when used for qualified health related expenses, including over the counter medication.
Let me know if anyone has any questions about these tips.
Wednesday, December 10, 2008
Year End Financial Tips
Posted by JB at 10:55 AM
Subscribe to:
Post Comments (Atom)
Posts
6 comments:
Are HSAs with HDHPs a good idea if you are older? Say 35 or above? Are they better for some than others?
Chuck Flurry
You may want to clarify that you are talking about 4-15-09 when you say April 15th of this year.
Good info!
Since the economy has been down I have been thinking about getting a couple of credit cards and to live off of credit for a while. Is that a wise move?
Chuck,
Good question. These are a good idea for anyone who has a health insurance plan with a high deductible. They are also good for people who have had some health issues in the past, and whose insurance premiums are really high. They are really good for self-employed people who have to pay for their own insurance. They could be good for anyone.
About the only people that probably shouldn't get them are people in child-bearing years, for whom it is highly likely that they will meet their deductible in the next couple years.
mom, good point.
Adam- ha
As a clarification:
Health Savings Accounts (HSAs) work with High Deductible Health Plans (HDHPs), and in order for you to be eligible for an HSA you must have an HDHP. I kind of lump them together in the answer I gave to Chuck's question above. So, it may be a good idea for people who have had health issues in the past whose health insurance premiums are really high to get a new quote with a higher deductible, and then to participate in an HSA. If you know for sure that you are going to be having multiple children in the next few years it probably isn't a great idea to get a HDHP anyway, and therefore you won't qualify for the HSA.
I hope this makes things more clear.
Post a Comment