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October 19, 2020
It’s that time of year when you’ve swapped swimsuits for sweaters.
Fall is also the time when adults tend to get back into the swing of things – including their finances.
While you still have time to enjoy the temperatures (if you live somewhere with the four seasons) and a few weeks before the holiday madness ensues, here are five financial actions to consider.
When interest rates are falling, a fixed-rate no-penalty CD can be a great way to lock in rates without sacrificing the flexibility of being able to access your money. How long your money needs to stay in place after you’ve funded the account depends on your bank – it will usually be at least seven days. But once you pass that hands-off period, no-penalty CDs don’t charge a withdraw penalty for taking out your money before the CD term expires.
That means if you’re saving for a goal – like next summer's big family reunion – and want a high-interest earning account with fewer restrictions than a traditional CD, no-penalty CDs might be good for you.
We know we mentioned you don’t have to worry about this just yet, but it never hurts to plan ahead. Whether it’s assuming that you’re hosting Thanksgiving or calling your sister to see if she’s finally going to pitch in, it could be good to start with at least an idea of how generous (or not) you’ll be during the holidays.
From there, you can get as specific as you want. Drill in on who gets what on your in-laws’ side and scour the stores to land the best deal on turkey. You can also keep it really high level and just know you’re the generous Santa type because it brings you joy.
Whether it’s your 401(k) through your employer or an IRA, now is the time of year to think about topping off your retirement contributions. The 2020 limits for 401(k)s are $19,500 with an additional $6,500 allowed for those 50 and older. For Traditional and Roth IRAs, this year’s limits are $6,000, plus an additional $1,000 for those 50 and older.
If you have some extra funds and can afford to put some money here, consider doing so. Your future self will probably thank you.
If you have a Flexible Spending Account (FSA) as part of your healthcare plan, you probably know that these are “use it or lose it” accounts. The maximum individuals could contribute for 2020 is $2,750.
Start by figuring out what you contributed and what you’ve already used. Now, what’s leftover? Whatever it is, this is the time of year to use it up.
Book that dreaded dentist appointment, see the dermatologist because you can, or stock up on some common over-the-counter meds. There are ways to get creative here (hello new glasses!), but you’ll want to check with your insurer to see exactly which expenses are covered.
Because you’re a good person and it’s always a good time to give back, right? Plus, if you do donate to charity it could also mean you get a tax deduction.
Whether it’s giving a dollar amount or items of value – like school supplies for an education nonprofit – you may be able to deduct qualified donations on your tax return. A tax deduction effectively lowers your taxable income. Translation: you’re taxed on less money in the eyes of the IRS.
This article is for informational purposes only and is not a substitute for individualized professional advice. Articles on this site were commissioned and approved by Marcus by Goldman Sachs®, but may not reflect the institutional opinions of The Goldman Sachs Group, Inc., Goldman Sachs Bank USA or any of their affiliates, subsidiaries or divisions.