Smart year-end moves—like upping retirement contributions, using new OBBA tax breaks, and spending your FSA money—can strengthen your financial position heading into 2026. https://t.co/EhQagZQi5b ...

Retirement Account Contributions - For 2025, contribution limits are $23,500 for employees under 50, $31,000 for those 50 and older, and $34,750 for those 60 to 63 [2] - Many individuals save approximately 9% of their income towards retirement, including both employee and company contributions [3] - Increasing retirement savings contributions can lower taxable income for 2025 [3] Affordable Care Act (ACA) & Health Savings Account (HSA) - Enhanced advanced premium tax credits may disappear, potentially increasing premiums for those above 150% of the federal poverty line [6] - When choosing an ACA plan, prioritize the network of doctors over the premium cost [7] - HSA limits are $4,300 for individuals and $8,550 for families [8] - HSAs are designed for long-term healthcare savings, similar to an IRA, and should be invested for growth, such as in an S&P 500 index fund [8][9]

Core Insights - The primary mistake individuals make regarding retirement savings is maintaining flat contribution rates year after year, which can significantly hinder their financial security in retirement [2][3]. Contribution Strategies - A 2024 Federal Reserve survey indicates that nearly half of households have less than $65,000 saved for retirement, highlighting the importance of increasing contributions over time [3]. - For an individual earning $70,000, a constant 3% employee contribution results in only $2,100 saved annually, insufficient for replacing income in retirement [3]. - Maximizing retirement contributions, especially through employer matching, is crucial for financial success during retirement [3][4]. Employer Matching - Employer matching contributions can significantly enhance retirement savings, with a 50% match on the first 6% of pay being a compelling incentive [4]. - Employees not reaching the maximum employer match level miss out on potential "free money," which cannot be recovered later [4][5]. Investment Considerations - Employees should reassess their risk appetite in investments as they approach retirement, considering a balanced portfolio strategy [5][6]. - Investing in assets that provide a steady income stream, such as dividend-paying stocks, money market funds, or bonds, is recommended [6].

Retirement Planning - Pausing retirement contributions can be more expensive than debt [1] - Proven payoff strategies exist to balance debt and retirement savings [1] - Aim to retire stronger by balancing debt payoff and retirement contributions [1]

Saving Strategies & Trends - "Revenge saving" is emerging as people prioritize saving due to economic concerns and inflation, shifting from post-pandemic "revenge spending" [1] - A study indicates that 7 out of 10 Americans are prioritizing emergency savings and changing their savings approach this year to save more [2] - Financial advisors suggest "taking your financial temperature" to gauge savings based on income, expenses, and savings goals, rather than emotions [3][4] - Reverse budgeting is recommended, prioritizing savings goals first and then allocating funds for expenses or discretionary spending [4] - Separating finances into different accounts, such as two checking accounts (one for fixed expenses/long-term savings and another for other expenses), is advised [5] - Automatically increasing savings by 1% every six to twelve months, even from zero, is a manageable way to boost savings [6] - Maximizing retirement contributions to 401(k)s, IRAs, or individual retirement accounts is encouraged [9] Retirement & Emergency Funds - Individuals should check for forgotten 401(k)s from previous employers, potentially worth $90,000 over a lifetime [7][8][9] - Contributing to a Roth IRA is beneficial, as withdrawals are tax-free [10] - A Roth IRA can serve as an emergency fund alternative, allowing contributions to be withdrawn at any time without penalties or taxes [11][12] - While a high-yield savings account is ideal for emergency funds, a Roth IRA can be a viable alternative [13] - The maximum contribution for a Roth IRA is $7,000 [10]

Retirement Contributions - Australian workers will receive more money into their mandatory retirement contributions [1] News Source - Bloomberg provides the best of Australia Briefing from the region and beyond [1]