Happy 2025, 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.
For 2025, you can contribute up to $23,500 ($31,000 if you’re 50 or older)
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? See if we’re right for you to create a personalized tax-efficient retirement strategy.
For 2025, the IRA contribution limit is $7,000, with an additional $1,000 catch-up contribution if you’re age 50 or older. Remember, contributions for the 2025 tax year can be made until April 15, 2026.
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 you need accessible funds for emergencies and opportunities. However, keeping three to six months’ expenses in a traditional savings account earning minimal interest means your emergency fund isn’t working for you. There are smarter strategies to maintain the liquidity you need while still generating meaningful returns. See if we’re right for you to explore how we help clients balance accessibility with growth.
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.
Conclusion
These six resolutions are designed to strengthen your financial foundation in 2025. Ready to put them into action with a personalized strategy? See if we’re right for you to schedule a 20-minute intro call and discover how we can help you maximize your financial potential this year.
