There are only two days left of 2010, but there's still time to take a few last-minute retirement planning steps.
- Save more. Hurry down to human resources and contribute enough to your 401(k) retirement account to get the full employer match for 2010. Otherwise, you are throwing away money.
- Take your RMD. If you're older than 70½, the IRS requires that you withdraw a required minimum distribution from your retirement accounts, including IRAs, some traditional 401(k)s, 402(b)s, 457s and the federal Thrift Savings Plan every year. If you fail to do it by Dec. 31, you pay a significant penalty. Calculate the RMD here.
- Donate from your IRA. The new tax law reinstated the ability of taxpayers older than 70½ to donate up to $100,000 of their IRA assets to charity annually. It's good to get this done by Dec. 31, but the new law makes the deduction retroactive. Donations made in January 2011 will count as 2010 charitable contributions and as your timely 2010 RMD.
- Clean out the garage. Neither your kids nor your grandkids want that stuff you've been saving for them. If you drop it off at the Goodwill or Salvation Army by Friday afternoon and you keep records of what you donated, you can probably deduct the "fair market value" of your donation from your 2010 taxes. You'll need Goodwill's Federal Identification number when you file your taxes. That number is 39-0808491. The Salvation Army has a different tax number for each geographic region.
- Take another look at your Medicare plan. Dec. 31 is your last opportunity until next year to change your plan. It's particularly important to review whether your Part D prescription drug plan is still the least expensive available to you. Here are instructions for figuring it out.