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Common Sense Party

(14,139 posts)
Sun Dec 11, 2011, 01:32 AM Dec 2011

The End-of-Year Retirement Checklist

Analyze Roth conversion scenarios: If you have an existing IRA and want to convert it to a Roth IRA, the deadline to convert (so that you pay the income taxes in 2012 rather than in 2013) is Dec. 31, says Wall. This is sometimes confusing to people, he says, because you typically have until April 15 to fund your retirement accounts for the previous year. The main reason for converting to a Roth IRA is to pay the income tax now instead of in the future (as you would with a traditional IRA), which could be a good idea if you’re in a lower tax bracket now than you will be going forward.

Max out 401(k) contributions: Americans also have until Dec. 31 to max out their 401(k) contributions for 2011. “This is huge for two reasons: It’s a deduction on your taxes and if you haven’t already contributed enough to get the match, you are giving away free money.” Unfortunately, he adds, some plans don’t let you change your contribution amounts except at certain points in the year. Check with your 401(k) plan provider.

Take required IRA distribution if you’re 70 ½ or older: If you’re 70½ or older, the IRS requires you to withdraw a certain amount from your IRA each year by Dec. 31. “If you don’t take this money out, you’ll get hit with a penalty of 50% of what you should have taken out,” says Wall.

Meet with your accountant and financial planner: It can also be helpful to meet with both your accountant and financial planner just to make sure you’re on track for the following year, says Wall. Make sure that you’re not going to miss out on any tax breaks and that your retirement income strategy is still intact, he says.

More, including some links: http://blogs.smartmoney.com/encore/2011/12/09/the-end-of-year-retirement-to-do-list/?mod=rss_&link=SM_home_blogsum

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The End-of-Year Retirement Checklist (Original Post) Common Sense Party Dec 2011 OP
One other thing you may want to do if you're trying to max out your retirement savings... Common Sense Party Dec 2011 #1

Common Sense Party

(14,139 posts)
1. One other thing you may want to do if you're trying to max out your retirement savings...
Sun Dec 11, 2011, 01:34 AM
Dec 2011

...is increase your contribution amount on your 401(k)/403(b) so that it will go up in January.

The new 401(k) contribution limits for 2012 are $17,000 if you're under age 50; $22,500 if you're 50+.

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