4th Quarter 2016

Financial Strategies For The New Year

Financial StrategiesThe new year is a good time to make the most of new savings opportunities to improve your future finances.

Save a little more. You can contribute up to $18,000 to your 457 in 2017. If you receive a raise, using some of it to increase your savings can make a big difference over the long run. If you boost your biweekly contributions by $50 at the beginning of each year, you’ll have an extra $360,000 over 25 years, if your investments earn 5 percent per year. Run your numbers with our Savings Boost calculator at

Build tax-free savings in a Roth. If your income is less than $118,000 if single or $186,000 if married filing jointly, then you can contribute up to $5,500 to a Roth IRA in 2017 (or a smaller amount if your income is up to $133,000 if single or $196,000 for joint filers). Money in the account will grow tax-free for retirement (not just tax-deferred as in a traditional IRA). You can withdraw your contributions at any time without penalty, and you can tap the earnings tax-free after age 59½ if you’ve had a Roth for at least five years.

Get an extra tax break for saving. You can claim the retirement savers' tax credit if you earn less than $31,000 if single or $62,000 for joint filers. The credit is worth 10 percent to 50 percent of the first $2,000 you contribute to a 457, IRA, or other retirement account. See

Find easy ways to save money. Review your monthly bills and keep track of your daily expenses for at least a week. Study the results to look for ways to cut back by eating out less, paying off high-interest debt, switching cell phone plans, or other strategies. Use our Small Change, Big Savings calculator at to see how much the extra money can grow over the long term.

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