It’s time for us to think about New Year’s resolutions. Most of us know we should be healthier in multiple ways, but all of us should consider making financial resolutions that will help us in future years. The following items are suggested resolutions that will make you more financially secure.
Do what you can and pick one or more for 2020:
Increase your TSP contributions. In 2020 you can contribute up to $19,500 – $500 more than in 2019. Once you reach the year in which you turn the age of 50 you can contribute an additional $6,500 – also $500 more than in 2019.
Review your household budget. You do have one, don’t you? Are there places where you can adjust your spending?
Emergency Fund. If you don’t already have an emergency fund of three months’ worth of expenses, start building one up. You don’t want to get caught flat footed by the next furlough and have to take a hardship withdrawal from your TSP (as many folks did in 2019).
Fund IRAs for 2019 and 2020. You have until April 15, 2020 to make 2019 contributions to Individual Retirement Arrangements, and you can make 2020 contributions beginning the first of the year. You can contribute $6,000 and another $1,000 beginning in the year you turn 50; these amounts are the same for 2019 and 2020. Contributing to the TSP does not preclude you from funding an IRA.
Rebalance. If your Thrift Savings Plan account has grown unevenly, consider rebalancing your TSP by means of an interfund transfer.
Education savings account. Contribute to a 529 plan or a Coverdell ESA for the education of your children or grandchildren. You might get a state income tax deduction for doing so.
Social Security. Sign up for a mySocialSecurity account so that you can access your Social Security statement at any time. See also, Social Security Benefits in Federal Retirement at ask.FEDweek.com.
FSAs. Pay attention to your flexible spending accounts. Don’t leave 2019 money sitting on the table and be sure to set aside money for 2020.
Review your insurance coverage. Consider all types of insurance; life, disability, long-term care, property and health. Do you need more or less coverage? Remember that you don’t need an open season to change your Federal Employees Group Life Insurance (FEGLI) coverage. Employees and retirees can cancel or reduce their coverage at any time. Employees can enroll and/or increase their coverage due to a qualifying life event, or by going through underwriting if it has been over one year since they waived FEGLI coverage.
Charity. If it appears that you will benefit from itemizing tax deductions this year, make charitable contributions and pre-pay your January mortgage this month.
And, most importantly, resolve to pay attention to items that will affect your financial life. Best of luck in the new year!