Happy 2024, Investors!
It’s that time of year for new beginnings and setting solid, actionable investing resolutions. This year, let’s go beyond general advice and focus on specific steps that can truly elevate your investment strategy. Ready to make some impactful financial moves? Let’s jump in.
1. Max Out Your Employer’s 401k Match
One of the most effective ways to build retirement savings is to fully utilize your employer’s 401k match. This is essentially free money, offering an immediate risk-free return on your investment. It’s vital to understand your employer’s match policy and contribute enough to get the full match.
2. Contribute to a Supplemental IRA
Supplement your 401(k) efforts by contributing to an Individual Retirement Account (IRA). This step not only diversifies your investment strategy but also takes advantage of unique tax benefits. Choosing between a Roth IRA and a Traditional IRA depends on your current tax situation and future expectations. Not sure which IRA is right for you? Speak with a financial advisor to tailor your retirement plan to your needs.
For 2023, the IRA contribution limit is $6,500, increasing to $7,000 in 2024. If you’re age 50 or older, you can contribute an additional $1,000 as a catch-up contribution. It’s important to note that contributions for a specific tax year can be made until the tax filing deadline of the following year, which is typically around April 15th.
3. Pay Down High-Interest Debt
High-interest debt, like credit card balances, can severely impede your financial growth. Tackling this debt is akin to securing a risk-free return on your investment, as the interest you avoid paying can be substantial. Prioritize paying off high-interest debts to free up more resources for investment and savings.
4. Build an Emergency Fund
Life is full of unexpected events, and an emergency fund acts as a financial buffer against such surprises. Aim to save enough to cover three to six months of living expenses. This fund should be readily accessible and kept separate from your investment accounts, ensuring you have a safety net without disrupting your long-term investment strategy.
5. Commit to Monthly Investing
Consistent investing is key to building wealth over time. By committing to regular, monthly contributions, you’re practicing dollar-cost averaging, which can help mitigate the risks of market volatility. This disciplined approach ensures you’re continuously investing, regardless of market highs and lows, paving the way for potential growth over the long term.
6. Establish an Estate Plan
An often-overlooked aspect of financial planning is estate planning, crucial for ensuring your assets are distributed according to your wishes. A simple yet effective step is to attach beneficiaries to your investment accounts. This process, known as a ‘transfer on death’ (TOD) designation, doesn’t require an attorney and can expedite the inheritance process, ensuring your assets go directly to your designated beneficiaries without the need for probate.
These six investing resolutions for 2024 are designed to strengthen your financial foundation and propel you towards a more secure future. By taking these actionable steps, you’re not just planning for the year ahead but for many years to come. Don’t let another year pass without maximizing your financial potential.
Take control of your finances today—start by scheduling a consultation with a financial advisor to personalize your investment strategy, or if you’re ready, dive right in and adjust your contributions to make the most of your retirement accounts. Remember, the best time to start investing in your future was yesterday; the next best time is now. Act today for a prosperous tomorrow!