3 Financial Moves to Consider Before Ringing in the New Year

3 Financial Moves to Consider Before Ringing in the New Year

December 01, 2021

Although you don't have to wait until January to begin working on your financial goals, a new year may bring a much-needed fresh start on your spending and saving goals. Read on for three financial moves you may want to consider before ringing in the New Year.

Open a Health Savings Account (HSA)

If you have a high-deductible health plan (HDHP), taking advantage of an HSA may provide you with one of the most tax-advantaged accounts available. As long as funds are spent on qualifying healthcare expenses, an HSA typically offers tax-free contributions, tax-free growth, and tax-free withdrawals. For 2022, you may be able to contribute up to $3,650 (if you have individual coverage) or $7,300 (if you have family coverage).1 These contribution limits increase by $1,000 for those who are age 55 or over, which means you may contribute $4,650 for individual coverage or $8,300 for family coverage.

Decide Between a Traditional or a Roth IRA

Even if you contribute to a 401(k) at work, individual retirement accounts (IRAs) offer some distinct advantages over an employer-sponsored 401(k). Not only are these accounts typically portable, allowing you to move them to the retirement custodian of your choice, but they may also serve as a rollover account for your old 401(k)s if you leave your employer.

Like a 401(k), a traditional IRA allows you to deduct your contributions (if you don't exceed certain income limits) from your taxable income, reducing your overall tax bill. When you withdraw IRA funds in retirement, you typically pay taxes on them then. A Roth IRA, on the other hand, allows you to make post-tax contributions and then withdraw them tax-free in retirement.

Get a Quote on Refinancing Your Mortgage

Mortgage rates remain near their 2020 lows but seem poised to increase soon.The higher your interest rate, the higher your monthly payment, which means that reducing your interest rate is one of the most effective ways to make a parcel of property more affordable.

Between increases in real estate values throughout the country and these low interest rates, refinancing to a lower rate may help you eliminate private mortgage insurance, lower your monthly payment, or even allow you to pay off your loan sooner. You may also qualify for a cash-out refinance, which may help free up some extra cash to make home improvements, pay off other debt, purchase a new car, or even buy an investment property.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing. Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal.  Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax.


The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, as long as they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

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