EAST PROVIDENCE, R.I. (WPRI) — With the new year quickly approaching, time is running out for anyone planning to get a little more money into their retirement plans.
Financial planner Donna Sowa Allard tells Eyewitness News there are some important deadlines to consider before ringing in the new year.
Allard said there’s still time to contribute to your 401k to reach the $19,000 employee contribution limit.
“If you’re a working person, I would take a look at how much money you have going into your retirement plans,” Allard said. “There’s one more payroll left probably before the end of the year so if you want to get a little more money into your plan, you can adjust your withholdings.”
If you’re at least 70-and-a-half years old you’ll have to make sure you’ve taken the required minimum distribution from your retirement accounts by Dec. 31.
“If you haven’t taken it yet, be sure to do it because in addition to owing taxes on the distribution you will owe a penalty of up to 50% of the amount of the distribution if you don’t take it,” Allard said. “That’s a lot of money, there’s no reason not to take it.”
It is also important to look ahead to 2020. Allard said if you didn’t hit those saving and spending goals in 2019, you should look at how you can do better for next year.
“Set up a really good monthly budget, look at your income, look at your expenses and make sure you’re paying yourself first on the saving side,” Allard said.
One more thing to consider, according to Allard, is if you have a flexible spending account — use that money on qualified medical expenses before the rest of the year.