Financial planner offers end of year money advice

Local News

As the year comes to an end, a Certified Financial Planner shared some tips with NBC4 about how you can maximize and save your money.

“It’s just a matter of being aware,” said Brad Huffman, the co-founder of Future Finances, Inc. “Everybody’s still in the holiday mode, which is great. Hopefully that continues, but you really do want to pay attention to see what, if anything, you can do to help your financial situation before 2020 kicks off.”

Huffman offered suggestions on how to save with regard to your flexible savings account, your IRA, your college funds and tax loss harvesting, which is the selling of low-performing stocks.

Below, is what he had to say about these topics:

Flexible spending accounts

“If you have a flexible spending account and you’ve been setting aside money in that to help pay for medical expenses, chances are if you don’t do something before the end of the year, you risk possibly losing that money. If you have a prescription to fill, or maybe you can make a quick visit to the doctor — I know a lot of doctors’ offices get busy this time of year because people are doing that — but you don’t want to let that money go away. Find a way to empty it [the account] out. Some plans may give you an extension, but again don’t wait until January 1 to ask that question. Make sure you take a look at it, right now.”

IRA

“If you’re over 70.5, you have an IRA, a retirement account, or an old 401(k) of some sort, there’s actually a really important rule that requires you to take a certain amount of money out of that account every year. If you’re not aware of this, you really should be because if you don’t take this required minimum distribution by the end of the year, you can actually face a penalty that equals 50 percent of what you should have taken out.”

College funds

“Maybe you’ve got a 529 college account, or you have one for a grand child or something along those lines. In the state of Ohio you can take a state income tax deduction of up to $4000 per year, per beneficiary. So, if you still have some money in your pocket after the holidays, which isn’t always a guarantee, but if you have that, you can add it to that account and get a state income tax deduction if it’s done before December 31.”

Tax loss harvesting

“We’re getting near the end of the year. This has been a really good year in the market, but maybe you have a few stocks or a few funds that haven’t done great. Well, if you want to help yourself a little bit at tax time, you can actually sell those losers, if you will, to help offset some of the gains in your portfolio, or potentially take that deduction on your income tax return.”

Most importantly, Huffman also advises the public to always look to the future, when financial planning.

“You spent a lot of money probably in the last couple of months, but now is the time to think about how to continue to build,” he said.

Copyright 2020 Nexstar Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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