Planning for the New Year
By Phil Bollin, Bollin Wealth Management

2007 is now history. Did you accomplish everything you set out to in the past year? If you are like most people, there is a pretty good chance that you didn’t reach all of your financial goals. So why not take some steps now that can help ensure that you reach your financial goals for 2008? We can’t control what happens day-to-day with the economy or the investment markets, but we can control our own actions and habits. Here are a few things that you can do to help you reach your 2008 financial goals.

Are you saving enough?

Max out your 401(k) and IRA contributions. For 2008 the maximum contribution amount for a 401(k) plan participant is $15,500. For 401(k) participants age 50 and over, an additional $5,000 “catch-up” contribution is permitted. If you aren’t in a position to maximize your 401(k) contributions, are you at least contributing enough to receive your employer’s match? If not, you are leaving money on the table.

For Roth and traditional IRA accounts, you can now contribute up to $5,000 in 2008, up from the limit of $4,000 in 2007. If you are over age 50, you are allowed to make an additional $1,000 “catch-up” contribution. (Remember, the $5,000 limit is for any combination of Roth and/or traditional IRA.) And thanks to the IRS, the door isn’t closed on 2007 just yet. You have up until April 15th to make your 2007 IRA contribution.

Finally, the deduction and phase-out limits have been adjusted for inflation in 2008. You can take a partial traditional IRA deduction if your modified AGI falls between $85,000 and $105,000 (married filing jointly) or between $53,000 and $73,000 (single or head of household). You can take a full IRA deduction in 2008 if your modified AGI is under $85,000 (married filing jointly) or $53,000 (single or head of household). Your ability to contribute to a Roth IRA is now phased out at modified AGI levels between $159,000 and $169,000 (married filing jointly) and $101,000 to $116,000 (single or head of household).

Have you reviewed your investment portfolios recently?

Despite what turned out to be a pretty lackluster year for investments, your investment portfolio has probably changed significantly over 2007. Have your investment allocations changed over the past year? If so, it may be time to rebalance your portfolio. Have you had a significant change in your life? If you experienced a retirement, marriage, spouse’s death, divorce or birth of a child, you will want to determine whether your current strategy is appropriate for you.

If you are working with a financial professional schedule an appointment in the first quarter to review 2007 and strategize for 2008. If you aren’t working with a financial professional, would you benefit from professional financial advice?

Are your affairs in order?

By far the worst part of my career is dealing with the deaths of clients. Death at an early age is made all the more tragic when proper estate planning hasn’t occurred. There is a common misperception out there that estate planning is only for the very wealthy. While some estate planning strategies are more appropriate for those of considerable wealth, no matter what age you are or your financial situation, everyone should have a will and have some basic estate planning in place, especially where families and children are involved.

If you haven’t me t with an estate planning attorney yet, resolve to do so this year. If you have an estate plan that is more than a couple years old, you should review the plan to make sure it is up to date.

Help your tax professional

Speaking on behalf of all my tax and accounting professional friends, there are some things that you can do to help them do a better job for you. First and foremost, don’t wait until the last minute to get your information to them. By the end of January, you should have received all of your 1099 and/or W-2s so why not get your information to your professional in early February?

Organizing your receipts can also be a big help to your tax/accounting professional. The more prepared you are, the less time your professional will have to spend organizing your materials, which will give him or her more time to do a better job of tax planning for you for the 2007 and 2008 tax years.