The ColoHealth Health & Wealth Newsletter
January 2025
Vol. 15, Issue 1

Smart New Year’s Money Moves for 2025

Well, 2024 went fast, didn’t it!? Seems like everything happened in a flash.

It’s so easy for time to get away from us. That’s why it’s a great idea to take a little time in January each year to get our finances squared away. And set us up for a successful 2025.

Here are some money moves I’m doing this month, and that I encourage all of our clients to do each January, as well:

1.) Max out your HSA contributions.

Contributing to a health savings account is arguably the single best tax move most Americans can make, dollar for dollar.

HSAs provide a triple tax advantage that is unrivaled by any other type of account: 

• Contributions are pre-tax.
• Growth is tax-deferred for life, as long as the money is in the HSA account. 
• Withdrawals to pay for medical expenses are tax-free. So you can effectively pay your healthcare bills with tax-free dollars. 

If you’re eligible to contribute to an HSA (i.e., you’re enrolled in a qualified high-deductiblehigh deductible health plan), you should do two things:

First: Complete your HSA contributions for 2024 by April 15th. For 2024, you can contribute up to $4,150 total as an individual, or $8,300 if you have a family plan. If you or your spouse are 55 or older, you can contribute an additional $1,000 for each partner over 55.

Second, start making your HSA contributions for 2025.

The limits for 2025 have increased to $4,300 for singles and $8,550 for family plans. If you want to automate your contributions in twelve even monthly payments, set your monthly automatic contributions to $358.33 for singles, and $712.50 for families.

If either of you is age 55 or older, you can increase your monthly contribution by an additional $83.33, or $166.66, if you’re both over age 55.

If you do that starting January, you’ll end the year having maxed out your HSA contribution for 2025. 

2.) Fully fund IRAs for 2024.

Again, you have until April 15th to contribute the maximum to your traditional or Roth IRAs.

For 2025 you can potentially contribute up to $7,000 as a single individual, or up to $14,000 if you’re married. Those aged 50 and older can contribute an additional $1,000 each, so up to $16,000 if both halves of a couple are age 50 or older.

Your income may limit how much of that amount you can deduct against your income. But you can make non-deductible contributions up to those amounts.

The maximum Roth contributions are the same, but your income may limit how much you can contribute to a Roth IRA.

To contribute the maximum, you can set your monthly contributions to $583.33 if you’re single, or $1166.66 if you’re married. If you’re both over 50, you can set your maximum contributions at $1,333.33.

Again, your income and whether you’re eligible for a workplace retirement plan will affect your maximum allowable contributions, so work with your tax advisor so you don’t accidentally contribute too much. 

3.) Update your beneficiaries.

Life happens. People get married, divorced, have or adopt children and grandchildren.

That’s why it’s important to go through all your financial accounts, and update your named beneficiaries.

This is critical to avoiding delays, disputes, or accidentally disinheriting a loved one after you are gone.

Review your accounts and policies like life insurance, retirement accounts (401(k), IRA, Roth IRA), health savings accounts (HSA), pensions, bank accounts with payable-on-death (POD) designations, and investment accounts with transfer-on-death (TOD) instructions.

Don’t forget to check annuities and any group benefits through work. A quick update today can save your loved ones significant hassle tomorrow.

4.) Update your life insurance coverage.

Has your income increased? Have you had children, gotten married, or both? Or are you able to afford more life insurance? Do you want to convert term insurance to a permanent policy that will pay out no matter how old you are when you die?

January is always a good time to review your life insurance needs, and make sure your death benefit will be adequate for the people who depend on you.

Your Personal Benefits Manager is a life insurance expert. Reach out and make an appointment for a free life insurance review and consultation. 

5.) Get long-term-care and disability insurance in place.

Most people are woefully underinsured against the loss of their income through disability, or against the need for assisted living or skilled nursing care.

But neither health insurance or Medicare covers these needs.

Speak with your PBM about these issues, too. Do it now, while you’re still in good health and it’s affordable. If you wait too long, a single medical event can make it difficult or impossible to obtain the protection you need.

All these things will either improve your financial position, or better protect you and your family against medical and financial setbacks. Get them done in January, and you can increase your peace of mind for the rest of the year.

Thanks for reading, thanks for being a client, and have a fantastic New Year.

To Your Health and Wealth,

Wiley P. Long III
President- ColoHealth

The ColoHealth Health & Wealth Newsletter is published monthly and emailed to subscribers at no charge. Subscribe now to stay on top of the critical information you need to know about health insurance, healthshare plans and managing your finances to achieve financial security.

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