Your year-end investing checklist

As the year comes to a close, it's a good time to check in on your investing plan and set yourself up for the year ahead.

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Checklists make life easier. But if they get too long, they become overwhelming. That’s why our year-end checklist only has five items on it.

How to use this checklist: Take five minutes to review the checklist. For each relevant item, schedule an hour of time to sit down and start completing the task. Your future self will thank you.

Here's your 5-point checklist:

  1. Max out retirement account contributions: Various retirement accounts like 401(k)s and IRAs have different maximum contributions with different benefits. If you have a traditional 401(k), every dollar you invest lowers your taxable income. Keep in mind the deadline to contribute is December 31. For IRAs on the other hand, you have until tax day, allowing you more time to invest. And in a Roth IRA, these dollars grow tax-free once invested.
  2. Plan next year's retirement account contributions: Examine your current 401(k) or IRA contributions. Experts typically recommend saving 10% to 15% of your income for retirement. This can be difficult, so we recommend saving as much as you can and automating it ahead of time using scheduled deposits or contributions. At the very least, if your employer offers a 401(k) match, see if you’re able to contribute enough to get what is essentially free money.
  3. Consider a rollover: If you have retirement accounts at other providers, review your fees and investment options. If you find higher-than-average fees or limited investment choices, consider if a rollover is right for you. Additionally, rolling over other retirement accounts into a Betterment IRA can streamline your finances by consolidating investments on one platform.
  4. Double-check your beneficiaries: Beneficiaries are the people who receive your money if something happens to you. It’s important they stay updated on each account, especially given that beneficiary designations normally take precedence over what’s listed in a will. We recommend reviewing beneficiaries annually or as life changes.
  5. Review your goals for next year and beyond: A new car, a vacation, a home renovation, child care—the list goes on. Taking just a small amount of time can set you up to save the money needed to reach your goals (and needs). For short-term goals, we recommend a high-yield cash account to keep your money safe as it grows. For long-term goals, we recommend a diversified portfolio of stocks and bonds. Or both! It’s a new year and a chance to put your financial plans first.

Remember: Tackling just one item from the checklist above can make a big difference in your financial life. You got this!

Have a savings goal in mind? Open an account today and we’ll recommend a portfolio of stocks, bonds, or cash to get you on the right path.

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