Conducting a financial review as you start a new year is an intentional, comprehensive effort that will help you understand your current financial state. During the review, you can see the progress you’ve made over the course of last year and it also ensures you make the most out of your financial accounts.
Review health benefits
The beginning of the year is always a busy time, but in many cases, it’s also your best opportunity to make financial decisions that still count toward the last year, and set yourself up for financial success in the new year. You don’t want to unknowingly leave any money on the table.
Make sure to review your benefit elections. Some company health insurance plans refresh on Jan. 1 and others might start over in July. Either way, taking a few minutes to understand what benefits will be available to you in the new year is a great way to set up your financial success. If you have a health savings account (HSA), you can contribute up to $3,850 for individuals and $7,750 for family coverage in 2025. Unlike flexible spending accounts (FSA), unused money in an HSA rolls over into the next year.”
Confirm tax withholding elections
It’s also important to check your tax withholding elections and visit the IRS website‡ to figure out how much you should be withholding from each paycheck. This will help you determine if you will owe the government in April or if you will get money back as a refund.
Max out tax-deferred retirement accounts
There are a few important deposit deadlines to keep in mind as we enter the new year to maximize your savings and retirement investments.
In 2025, the 401(k) contribution limit‡ increases from to $23,500. It’s always a good idea to check your investment choices, allocations and scheduled contributions to make sure you are making the most out of your 401(k)-retirement account. If you have an individual retirement account (IRA) and have extra cash, try to reach the 2025 maximum contribution of $7,000. Remember, you have until April 15, 2025, to contribute to an IRA that can be realized on your 2024 tax return; however, contributions to your 401(k) start over January 1.
Also, the beginning of the year is a good time to update your beneficiaries on your retirement accounts and insurance policies and be aware of upcoming milestones. If you are older than 50, you are eligible for “catch-up contributions” to your IRAs and some qualified 401(k)s. If you are older than 59 ½,you are eligible to take IRA distributions without a penalty.
If the new year will bring a new addition to your family, you can create or contribute to a 529 account, which is used to cover qualified education costs.
Set new goals
Completing a financial review can be overwhelming as you get started, but it can reveal small actions you can take to better prepare for the future. Don’t be afraid to reach out to a banker if you have questions about how you can adjust your accounts and make contributions to benefit your family and financial picture.
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