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Smart Money Moves for 2025

As 2024 wraps, take these steps for a better 2025

By Deborah Jeanne Sergeant

 

To put yourself in a better financial position a year from now takes planning. Here are a few ideas from area financial experts.

 

Tips from Jeff Feldman, Ph.D., and certified financial planner at Rochester Financial Services in Pittsford:

• “One thing I always tell clients is to possibly do a mock tax return before the end of the year to see how much taxable income they’ll have. Some people, especially those who are retired, don’t have enough money to offset the marital or single person standard deduction. Some don’t have that amount of income and they should consider a Roth conversion or withdraw money from IRA accounts to get a free pass. They can do this without paying additional tax. If they’re in a 10%-12% tax bracket, they can do a Roth conversion this year and take advantage of that.

• “As far as IRA contributions, people have until April 15 to make the contributions; they don’t have to do it by the end of the year.

• “For 401k contributions, if you’re under 50, the maximum is $23,000. For those 50-plus, it’s $30,500. If they’ve been under-contributing, they can increase their weekly deductions to take advantage of that. These work on a calendar year basis.

• “529 plans are on a calendar year basis. If they have children or grandchildren who will be looking to go to college, you get a New York state income tax deduction. The maximum is $10,000 for married, $5,000 for individuals.

• “Harvest your losses if you have investments that have lost money. That can offset some capital gains. You can go through your portfolio and sell your losing positions. You might have a lot of capital gains this year, so taking advantage of that, you can look through your portfolio and sell losing positions. Bond funds in general you might have losses. Selling those to offset capital gains might be a good strategy.”

 

Tips from Diana Apostolova, investment consultant with Rochester Investments:

• “If employee benefits are provided, it may make sense to review the plans and make changes by the deadline. Some of the employer benefits changes may include starting or increasing the 401k contributions; updating the investment options in the 401k plan; updating the percentage contribution to each investment option; and health insurance plans, plus group life insurance, group legal, pet insurance, etcetera.

• “Changes to Medicare plan may include a comparison to other plans in terms of costs and benefits.

• “A review of expenses typically includes everything from cellphone bills to gas and electric accounts. Switching providers or getting less services from the current provider may be worth exploring. Looking for high spendings or spendings on things that can be eliminated or reduced may help balance a checkbook.

• “In terms of income, getting a part-time job over the holiday season may bring in some extra cash to pay bills, or use the money to help someone you know.

• “Credit card debt with high interest rates can be a big burden. So if at all possible, changing to no interest or lower interest options may help with paying these loans faster. Ideally new debt should be avoided, or significantly reduced.

• “Once all that is done, mark your calendar and do it all over again each year moving forward.”