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Estate Planning Blog

Spring Cleaning for your Finances

March 6, 2024
Spring Cleaning for your Finances

It is almost Spring! 

As we dust out our homes and clean up our gardens, it is also a wonderful time to tidy up and spring clean your finances!   Here are a few ways:

1 | Front-load Your 401(k) Contributions

Show love to your future self by maximizing your 401(k) contributions early in the year as opposed to spreading them out evenly over 12 months. By reaching the 2024 limits of $23,000 sooner, your investments will have more time to grow, potentially enhancing your retirement nest egg even more. It's a proactive step toward securing financial stability for yourself and your family down the road.


2 | Set Up an IRA for a Child

Want to inspire financial skills in your kids while getting a tax advantage? Teach the next generation the value of financial planning and responsibility by setting up and contributing to an IRA for a child with earned income. Whether it's from babysitting jobs, odd jobs, or working for your business, every dollar invested grows tax-free, providing a solid foundation for their future financial well-being.


3 | Make Donations During Spring Cleaning

As you sift through your belongings, consider the items that no longer serve you but could bring joy to others. From gently used household furnishings to clothing and books, each item holds the potential to make a difference in someone's life.

Here's the cherry on top: for items in good condition, you may claim a charitable deduction on your 2024 income tax return, making your act of kindness even sweeter. So, as you purge the old and welcome the new, keep receipts of your donations – it may add up to some real tax savings.

4 | Establish a 529 College Plan

Invest in the educational future of your loved ones by setting up a 529 plan. While the contributions you make to a 529 account aren’t tax deductible, contributions to these plans grow tax-free and can be withdrawn tax-free when used by your loved one for qualified education expenses like housing, books, tuition, and more. Whether it's for your child, grandchild, niece, nephew, or another family member, a 529 plan is a gift that keeps on giving.


5 | Spread The Love With The Annual Gift Exclusion

Don't underestimate the power of spreading love through financial generosity. Did you know you can gift up to $18,000 per person to an unlimited number of people each year? This allows you to share your wealth with family and friends in a tax-efficient manner. These gifts not only escape taxation but also foster stronger connections and deepen relationships with your loved ones. Whether it's helping with educational expenses, supporting a dream vacation, or simply offering a helping hand, annual exclusion gifts embody the spirit of giving and strengthen the bonds that matter most.

6 | Make an Extra Mortgage Payment

Your home is more than just a place to live—it's also a valuable asset that can offer tax advantages. By making an extra mortgage payment on your primary home loan, you can increase your mortgage interest deductions on your tax return. Not only does this reduce your taxable income, but it also accelerates your path to homeownership, saving you money in the long run.

7 | Complete Repairs on Rental Property

Investing in your rental property not only enhances its value but also offers tax benefits. By completing repairs on your rental property, you can offset rental income on your tax return while providing a better living environment for your tenants. It's a win-win situation that improves your property's profitability and strengthens your relationship with your renters.


8 | Create a Lifetime Asset Protection Trust

Planning for the unexpected is an act of love towards your spouse and children, and when you know the right tools to use (like we do) you can make sure your family is provided for and protected for generations to come. One of my favorite ways to do this is using a Lifetime Asset Protection Trust. This tool allows you to protect the assets you leave for your children from any future financial trouble, like lawsuits, or divorces.


9 | Create Your Estate Plan

Finally, don't overlook the importance of estate planning in showing love to your family. By finalizing your Will, Revocable Trust, Power of Attorney, and Advance Medical Directive, you ensure that your wishes are carried out and your loved ones are protected in the event of incapacity or death. It's a vital step towards providing peace of mind for you and your family, allowing you to focus on enjoying life's precious moments together. And remember, a plan is more than a set of documents. It’s a lifetime of wise decisions about your life and legacy.




Planning for What’s Really Important

While you take steps to secure your financial future, don’t forget to protect everything you’ve worked so hard to build. Your retirement savings is likely the largest asset you own, and making sure it’s managed and passed on in the best way possible is essential for your well-being and the future well-being of those you love.

To make sure there’s a plan for your future, give our office a call. We’d be honored to learn more about your goals for your family and share with you the unique process we use to ensure everything you own and everyone you love is cared for, no matter what.

This newsletter is for educational, informational, and enjoyment purposes and is not intended as ERISA, tax, legal, or investment advice.


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