Financial Resolutions Worth Keeping in 2016: Tips from U.S. Bank Coach Margaret Paddock

MINNEAPOLIS--(BUSINESS WIRE)-- Going into a new year, many start thinking about resolutions–eating healthier, reading more or giving up bad habits. However, whether you’re a millennial with student loans or a baby boomer about to retire, one of the best things you can do for the new year is reassess and take control of your financial situation. The new year is a great time to create a financial plan and to set financial goals.

“For most people, personal finance is not the most exciting topic to think about come January 1, but it is one that individuals must continually address and strategically tackle. By setting attainable goals each year, you can start taking charge of your finances, and be better poised for financial success,” said Margaret Paddock, Twin Cities market leader of The Private Client Reserve of U.S. Bank. “Your goals should resonate with you and align with your priorities – retirement, education, a new home or a family vacation – everyone’s goals will be different. Throughout the year you should track your progress, and you will soon develop new healthy financial habits.”

Paddock is part of the U.S. Bank Coaches program, which is a team of experts offering practical insights and advice on relevant and important financial topics.

Before the 2015 New Year’s Eve ball drops in Times Square, she counts down some financial tips to kick off 2016.

10) Order your free credit report. You should regularly check your report to be sure it’s accurate. A lower score can cost you!

9) Rebalance your investment portfolios. Fluctuations in the stock market may have you owning too much or too little in various funds or sectors.

8) Get automated. Now is the time to move all of your finances online or set up automatic payments. Most of your regular monthly payments can be scheduled for you. It is also a great time to set up an automatic transfer to a savings or brokerage account.

7) Re-check debt. Take a look at all of your debt. Check car loans, mortgages, lines of credit, and credit cards. You may be able to find more favorable terms or rates to save you money in 2016.

6) Review your estate planning. Make sure all your documents still align with your wishes. And if you don’t have this yet created, you can start building it now.

5) Examine 2015 charitable giving. Determine whether making additional charitable gifts may be beneficial from an income tax perspective. If possible, make gifts using appreciated stock that you've held for more than one year to avoid incurring capital gains.

4) Check with your employer to determine whether you have maximized your 401(k) contributions. If not, consider making additional contributions by year-end to reach your maximum annual contribution amount (for 2015 and 2016 $18,000 per year and a $6,000 catch-up contribution if over age 50).

3) Don’t forget your RMD. If you are age 70½ and older and have a qualified retirement plan such as a 401(k) or IRA, make sure that you have taken your required minimum distribution (RMD) prior to year-end. If you anticipate that you will never need the income to support your living expenses, consider converting your 401(k) or IRA to a Roth IRA, which does not require RMDs.

2) Care for the elderly. With the aging population, eldercare planning is becoming vitally important. Consider reviewing your or your parents’ durable powers of attorney and health care directives to ensure that they include language about gifting to protect against possible elder abuse. Also, if there is a health decline, make sure that assets that have significantly increased in value are not given away inadvertently as those assets will receive a basis step-up at death.

1) Check Social Security benefits. Be aware that the Bipartisan Budget Act of 2015 made significant changes to two popular Social Security claiming strategies and created three sets of rules based on one’s birthday. The “File-and-Suspend” strategy will be phased out by April 30, 2016 (must be 66 by May 1, 2016) and the “Restricted Application for Spousal Benefits” Social Security option will no longer be available for those born on or after Jan. 2, 1954. The “File and Suspend” strategy can still be used to fix a “mistake” of taking benefits early by suspending Social Security at full retirement age and restarting it at a much higher level at age 70 (no one can collect benefits during the suspension period). The new rules also takes away the ability for those faced with a change of circumstances (serious illness) to receive a lump sum payment in lieu of receiving delayed retirement credits for the period that Social Security was suspended. Although the popular claiming strategies are going away—planning opportunities still exist.

So while you are making your 2016 New Year’s resolutions, remember these top 10 tips and be prepared to celebrate your renewed financial health as you track your progress throughout the year.

About The Private Client Reserve
The Private Client Reserve serves individuals and families, business owners, including corporate executives, professionals and others who have complex financial interests and needs. Key services include investment management, private banking, trust and estate services and wealth planning. The Reserve is committed to providing consistent high-quality advice and individualized attention. For more information, visit reserve.usbank.com

About U.S. Bank
Minneapolis-based U.S. Bancorp (NYSE:USB), with $416 billion in assets as of September 30, 2015, is the parent company of U.S. Bank National Association, the fifth largest commercial bank in the United States. The Company operates 3,151 banking offices in 25 states and 5,001 ATMs and provides a comprehensive line of banking, investment, mortgage, trust and payment services products to consumers, businesses and institutions. Visit U.S. Bancorp on the web at www.usbank.com.

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Source: U.S. Bancorp