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Why you should check into your retirement plan now | Money Talks

With half of 2021 already over, it's time to check in on your finances to make sure everything looks good!

TEMPLE, Texas — We have reached and now passed the halfway point of 2021, which means that it could be time for a financial tune-up for the second half of the year. What should that entail?

Well, many of us have a retirement plan at work and as we've been paid here in 2021, those funds have been making money this year for sure. If you're someone who doesn't check in on that account often, Certified Financial Planner Neil Vannoy says, now is the time.

“If you have a retirement plan like a 401(k) or a 403(b) through your work, take time to review how much you're contributing," Vannoy said. "Start making contributions if you haven't started yet and increase the amount you're already saving if possible. And make sure you put in at least enough to get the full match offered by your employer."

You can also invest outside of work or if you don't have a work sponsored plan. 

"The IRA contribution limit for 2021 is $6,000, or $7,000 if your age 50 or older, as long as you have at least that amount of earned income during the year," Vannoy said. "Starting monthly contributions now, or increasing the amount of your current contributions, will help you reach the maximum contribution for 2021 by the deadline of April 15, 2022."

It's also time to see, based on your age, if your retirement goals and strategy is lining up for the future. 

"The stock market has been doing well this year, so your stock holdings might be higher than your target allocation," Vannoy said. "Mid-year is a great time to rebalance your portfolio back to your target stock and bond percentages. This is also a great time to check any individual stocks you hold – especially if you own stock in the company you work for – and consider selling those shares in favor of a low-cost, diversified mutual fund or ETF."

Finally, start thinking about the income taxes that you will owe, or you will be getting back next spring when you file your taxes for 2021. 

"Consider changing your withholding if you received a large tax refund this year or owed a lot of money at tax time," he said. "If you received a large refund, you can lower your withholding so you can keep more of your money throughout the year. If you owed money this year, then you can increase your withholding to avoid having to come up with money for ‘Uncle Sam’ at tax time next year."

Vannoy went on to say it's no secret that the holiday season can strain our budgets. By starting to plan now for the expenses associated with travel and gift giving at the end of the year, you can avoid getting yourself into financial trouble, because the holidays we be here before you know it! 

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