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Investing moves to be done by the end of the year

Give your 401(k) a raise

If you can, boost your 401(k) savings rate by that amount in the new year.

The beauty of an employer-sponsored 401(k) — especially one where you’re automatically enrolled — is that inertia works for you. You don’t have to keep remembering to sock away money into your retirement account. Your company automatically does that for you with each paycheck.

Fix your mix of stocks and bonds

“We’ve hit more than 45 new highs this year alone,” says Joe Garza, a Dallas tax lawyer. “Chances are, rebalancing will be an issue.”

So take care of it now, to set your portfolio up for success in the coming year.

If you started out with a moderate 60% stock/40% bond portfolio five years ago—and neglected to routinely reset that mix back to your original strategy—your portfolio would have drifted into a far more aggressive 75% equity/25% fixed-income strategy. That may seem harmless, but in the event of a market downturn, having 75% of your nest egg in stocks will lead to far greater losses than a moderate 60% equity stake.

Maximize your other tax shelters

Start with your IRAs. While most Americans with income have access to at least one type of individual retirement account—a traditional IRA, a Roth, a spousal IRA, or even a nondeductible account—only 33% of Americans currently contribute to these accounts. You can save up to $5,500 in 2018, or $6,500 if you’re 50 or older.

In addition to IRAs, don’t overlook health savings accounts. “HSAs are kind of a stealth retirement savings vehicle,” says Rob Williams, director of income planning for the Schwab Center for Financial Research. That’s because HSAs are triple tax advantaged: Money goes in tax deferred, grows tax sheltered, and, if withdrawn for qualified medical expenses, comes out tax-free.

You’re doubtless to own many those prices in retirement, which, if not addressed , will irritate your nest egg. A recent Fidelity analysis found that a typical 65-year-old couple retiring this year will expect to pay $275,000 in health-related expenses throughout the course of their retirement.

To qualify, you’ve got to be lined by a high-deductible health arrange. In 2018 the utmost contribution for Associate in Nursing eligible individual is $3,450. For families, it’s $6,900. like alternative tax-deferred accounts, it is vital to hit if you’ll be able to, however solely V-J Day of HSA users really do.

Harvest your tax losses.

Hate it when the government takes a cut of your profits every time you sell any investment that has gone up in price? Get Uncle Sam back by making him share your pain when you sell investments that have lost value. It’s called tax-loss harvesting, and “now’s the time to be looking at that strategically,” says Schwab’s Williams.

Isn’t selling at a loss admitting defeat? It doesn’t have to be. When you sell a stock or fund at a loss, you are realizing the loss for tax purposes. And you can use that loss to reduce your taxes—by offsetting gains elsewhere in your portfolio or reducing ordinary income up to $3,000.

But you can turn around and reinvest in the same type of asset, as long as it’s not “substantially identical.” Or wait 30 days and step back into the exact same investment.

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