3 Financial Gifts to Give Yourself in 2020

Do you have your holiday shopping done yet? It’s that time of year again. Time to buy gifts for spouses, children, and all the other friends and family who play a meaningful role in your life.

If you’ve already bought gifts for all your loved ones, you may want to think about a gift for yourself. You could splurge on an expensive item you’ve had your eye on. Or you could give yourself a financial gift that will pay benefits long into the future.

This holiday season consider giving yourself the gift of a stronger financial future. Below are three steps you can take to improve your finances today and in the future. If you aren’t currently implementing these steps, now may be the time to do so.

Use a budget.

Nearly 60% of Americans don’t use a budget.1 Are you among that group? If so, make 2020 the year you start using one. A budget is one of the most powerful financial tools at your disposal. You can use it to identify areas where you’re spending too much. You can then make adjustments and keep your expenses under control, which will allow you to boost your savings.

The good news is it’s never been easier to keep a household budget. There is a wide range of apps and software that make it as easy as clicking a few buttons. In fact, your bank may even have built-in budgeting features that sync directly with your accounts.

Of course, you don’t have to use an app. You can also do it the old-fashioned way with a simple pen and paper. Choose the method that works best for you. Any approach that gets you to use a budget is a good one.

Increase your savings.

Do you make retirement contributions to a 401(k), IRA, or another qualified retirement plan? These types of accounts are powerful retirement savings tools because of their tax-deferred status. You don’t pay taxes on growth as long as the funds stay inside the account. That may help your qualified savings compound at a faster rate than they would in a taxable account.

Consider increasing your contributions to your 401(k) or IRA in 2020. You can contribute up to $19,500 to a 401(k) in 2020. That number increases to $25,500 if you are age 50 or older. You can also contribute up to $6,000 to an IRA, or up to $7,000 if you are 50 or older.2

Guarantee* your retirement income.

Are you approaching retirement? If so, this may be the time to start thinking about your retirement income. You’ll likely receive income from Social Security. Maybe you’ll even receive income from a defined benefit pension. However, you also may need to take distributions from your 401(k), IRA, or other retirement savings.

Often those withdrawals aren’t guaranteed*. A potential risk of a market downturn could limit your ability to take retirement income. Or if you withdraw too much in the early years of retirement, you may not have assets left in the later years.

Fortunately, you minimize these risks by creating guaranteed* income from your retirement savings. There is a wide range of financial vehicles available that you can use to convert a portion of your retirement savings into income that is guaranteed* for life, regardless of what happens in the market or how long you live.

Ready to give yourself the gift of financial stability? Let’s talk about it. Contact us today at Protecting Your Retirement LLC. We can help you implement a strategy. Let’s connect soon and start the conversation. Our Telephone number is 913-648-2700.

1https://money.cnn.com/2016/10/24/pf/financial-mistake-budget/index.html

2https://www.irs.gov/newsroom/401k-contribution-limit-increases-to-19500-for-2020-catch-up-limit-rises-to-6500

*Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values.

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19503 – 2019/11/21