Investing your money in different accounts throughout the year can literally pay off in the future. Your investing accounts can grow your retirement fund and help you save money in the present. Here are a few investment accounts that you should be sure to max out before the end of the year.
A Roth IRA
First of all, you should definitely try to max out your Roth IRA account. This year, the maximum contribution that you can make to this account is $6,000, or $7,000 if you’re older than 50. You can split up your contributions to automatically transfer with your paychecks, or you can make bigger contributions. Your Roth IRA has a calendar year limitation, which means that you can only contribute to that year’s amount by the last day of December. If you want to max out on your Roth IRA, make sure you add in your max amount of money by December 31.
An HSA
You should also try to max out on your HSA account before the end of the year. An HSA helps you pay for medical expenses not covered by health insurance. Most individuals cap out at around $7,050 for their max contribution, but depending on your health insurance coverage, you might be able to contribute up to $7,300. Some employers will match your HSA contributions to incentivize you to stay healthy. If this is the case with your employer, all the more reason to contribute as much as possible.
A 529 Education Plan
If you have children, you may have been adding to a 529 education plan to save up for your child’s future education. The money you contribute to such a fund can grow tax-deferred, and you can usually use it for your child without contributing taxes. This can be a great way to save for your child’s future. While there technically isn’t a maximum contribution amount you can make to a 529 plan, if you add more than $14,000 at a time, your child or recipient might need to pay a gift tax at some point.
So, if you’re budgeting for your end-of-year expenses and are trying to figure out how you can best help your investments, remember these tips. Make sure that you are maxing out your contributions to your Roth IRA, your HSA, and your 529 education plan for your children. This will help you to use your money wisely now as you save for the future.
Check out this article on how to use an HSA for beginners!
