5 Key Financial Moves to Make Before Year End

5 Key Financial Moves to Make Before Year EndThis is the perfect time to take advantage of some savings opportunities, tax breaks, and other key strategies to improve your financial situation before the end of the year.

Bump up your retirement savings. You have until the end of the year to add to your retirement savings for 2018.Even increasing your savings a little bit can make a big difference over the long run. For example, increasing your bi-weekly 457 plan contributions by $20 every year can give you an extra $268,000 in savings after 35 years, if your investments return 5 percent per year (see the Savings Boost calculator at www.icmarc.org/savingsboost).

Set your short-term and long-term goals. Start setting aside money for holiday gifts and travel or summer vacation, which can help you avoid expensive debt.

Pay down your debt. It's also a good time to make paying off any high-interest debt you already have — such as credit card debt — a top priority. When you're no longer paying high interest rates, you'll have much more money for your other goals.

Review your investments. Make sure your investments match your time frame and risk tolerance. If you have decades before retirement, you may be able to afford more risk in stock funds, for example. A target-date fund provides a portfolio to match your time horizon (see InvestingSpotlight for details).

Make the most of tax breaks. If you contribute to a retirement-savings plan, you may be eligible for the retirement savers' tax credit, which can reduce your tax bill by up to $1,000 if single or $2,000 if married filing jointly (see www.icmarc.org/saverscredit).

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