Year End Financial Tips

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.