With Black Friday shopping madness looming and little more than a month left in 2012, now's the time to examine your retirement savings accounts and make sure you're doing right by them.
If you haven't maxed out your 401(k) or other retirement plan at work, now's the time to find the cash and put it in the plan before you're too tempted by holiday spending. At the very least, make sure that you contribute enough to get your full employer match. Otherwise, you're just leaving money on the table and that's really foolish retirement planning.
If you don't have a plan at work, you're self-employed or you run a little business on the side, open or contribute to your own retirement plan. The easiest to manage is a plain-vanilla IRA -- traditional or Roth. You can contribute up to $5,000 -- $6,000 if you're 50 or older. For 2013, you can contribute $5,500, or $1,000 more in catch-up contributions.
If you run a small business, take a look at a SEP IRA. If you're a big earner, you can put away as much as $50,000 in 2012, deferring taxes and lowering the amount of income on which you'll owe them. Another possibility is a SIMPLE IRA. If you're younger than 50, you can put aside $11,500; older than 50, $14,000. (In 2013, the contribution amount increases to $12,000 for those younger than 50.) The deadline to set up one of these this year was Oct. 1, but there's always next year.
But be careful. Last June, the IRS warned that it was cracking down on people who contribute more than the allowable amount to these plans and would fine violators.
The IRS also warned IRA owners turning age 70 that they must start taking required minimum withdrawals from traditional IRAs by April 1 of the year after they turn 70 ½ and promised to be vigilant about enforcing this, too. Bankrate tax expert Kay Bell points out that failure to withdraw triggers an excess accumulation tax. This levy is 50 percent of the required distribution that you didn't take. Uncle Sam doesn't fool around -- so neither should you.