For the self-employed. First, if your tax return is on extension, you still have time to make a contribution to a SEP-IRA for 2010. If you file a corporate return, your deadline is September 15, and if you are a sole proprietor the deadline is October 15. You can either contribute to an existing account or open a new SEP.
Consider a Solo 401(k). Contributions to a 401(k) must be made by December 31. This is also the deadline for starting a Solo 401(k) for the current year. Additional profit sharing contributions for 2011 must be made by the date you file your tax return, including extensions. The maximum combined contribution is $49,000 ($54,500 if you are 50 or over by the end of 2011). The contribution limits are a bit different if you are a sole proprietor. It's best to consult with your financial or tax adviser here.
401(k) participants should review their accounts. Is your allocation where it should be? This is an especially timely question given the market volatility lately. Should you use your plan's target date fund option? If yes, are you in the right target-date fund for your situation? Remember, the target-date fund with the date nearest to your projected retirement date is not necessarily the right choice for you.
For business owners and other 401(k) plan sponsors. This is a good time to take a look at your company's plan. New disclosure rules for plan expenses come online in 2012. If you don't use one already, why not hire an independent adviser to fully review your current plan and ensure that your plan is well run with solid funds and low expenses? Better to take a proactive stance here than to be unpleasantly surprised when your employees start asking pointed questions about the plan.
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Evaluate your employee benefits. Fall is the time for open enrollment. For those of you who are corporate employees, this year pay close attention to the materials that you receive from your company. Many companies will continue to make benefit changes in light of last year's health care legislation and continuing efforts to contain benefit costs. Your benefit package is a significant portion of your compensation, make sure that you are taking full advantage of what is offered to you and that your elections reflect your family's needs.
Review beneficiary designations. Whether on insurance policies, annuities, retirement plans, or individual retirement accounts (IRAs), review beneficiary designations every year to ensure that they are correct and reflect your current wishes. It's always better to be safe than sorry. These elections rule in the event of your death even if they don't reflect your wishes.
Review your estate plan. You should do this every few years as a routine part of reviewing your overall financial situation. If you have experienced a "life change," such as a marriage, a divorce, or the birth of a child, this might require a more formal review or even an update to your documents. If you have children that are minors and don't have a basic will naming a guardian in the event of your death, I urge you to take care of this situation today.
Get a financial plan in place. If you don't have one, you need one. If you have one, but you haven't looked at it in a while, there is no better time than now. If you are a do-it-yourselfer and you're convinced that you can do this yourself, have you? Don't put this off, hire a financial professional if needed. Perhaps I'm biased, but I think you will find the expense is far outweighed by the value received.
This list is not meant to be exhaustive. What is on your financial to do list for the rest of 2011?
Roger Wohlner, CFP®, is a fee-only financial adviser at Asset Strategy Consultants based in Arlington Heights, Ill. where he provides advice to individual clients, retirement plan sponsors, foundations, and endowments. He recently cofounded Retirement Fiduciary Advisors to provide direct investment and retirement planning advice to 401(k) plan participants. Follow Roger on Twitter and LinkedIn.