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Tie up end-of-year loose ends

By Jennie L. Phipps ·
Monday, December 24, 2012
Posted: 7 am ET

There are only a few days left in 2012. Don't let the year come to an end without tying up these retirement planning loose ends.

  • Max out your 401(k) at work. At the very least, put in enough to get your complete employer match. Otherwise, you're just leaving money on the table.
  • Take your RMD. The IRS requires that retirement account holders take a required minimum distribution beginning in the year they turn 70 ½. You can delay the first one until April 1 of the year following the year in which you turn 70 ½. But every year after that, you must take the RMD by Dec. 31 -- or risk a 50 percent penalty.
  • Use up your flexible spending account. It's a use-it-or-lose-it situation, and at our age we need all the money we can get. You can purchase some items with FSA money without a prescription. Alternatively, you can ask your doctor to write a prescription, for FSA purposes, for over-the-counter products such as aspirin that the doctor might have urged you to take.
  • Give to charity. The value will be tax-deductible when you pay this year's taxes -- as long as you itemize.
  • Consider selling stocks. Capital gains taxes are likely to rise next year, but if you are in one of the two lowest tax brackets, you can sell appreciated stocks this year and pay no taxes on the gain. To qualify, your taxable income can't exceed: $35,350 if you are single; $47,350 if you are a single head of household with dependents; or $70,700 if you are married filing jointly.
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