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All Contents © 2020The Kiplinger Washington Editors
By Eleanor Laise, Senior Editor
Rachel L. Sheedy, Editor
| December 31, 2018From Kiplinger's Retirement Report
When ringing in a new year, many people resolve to be better organized or improve how they manage their finances. “On January 1st, you should be waking up thinking, ‘What is my overall game plan for this year?’ ” says Sean Scaturro, a certified financial planner with USAA. Scaturro suggests developing a road map for this year’s financial journey. After all, the start of a new year is a great time to assess your financial situation and make plans to improve it.
To make that easier, this calendar highlights the critical dates that are pertinent to preretirees and retirees for 2019, covering categories such as taxes and health care. Miss a deadline, and it could sock your finances. So print out these pages and post them on your fridge, or set reminders on an online calendar to avoid forgetting a crucial deadline.
Jan. 1. After the New Year’s festivities are over, it’s time to get your financial house in order. Preretirees may find it sufficient to review their financial plan once a year, but retirees should consider setting up quarterly reviews. Scaturro suggests reviewing your sources of income along with your budget to make sure your essential expenses will be covered. And keep tabs on how your portfolio is matching up with your risk tolerance and rebalance as necessary.
It’s not too early to start thinking about your 2019 tax bill. If you’re still working, you may want to maximize your 401(k) contributions to take advantage of 2019’s higher limits. Workers of any age can stash up to $19,000 in a 401(k), or about $1,583 a month, while those 50 and older can also make an extra catch-up contribution of up to $6,000 for the year. For the first time in six years, the contribution limit for IRAs goes up in 2019, to $6,000, with those 50 and older able to save up to $1,000 extra. “You want to make sure you’re optimizing your savings plans,” says Mark Bradford, senior vice president and wealth director at Bryn Mawr Trust.
This is also the start of Medicare’s general enrollment period. If you missed signing up for Medicare when you turned 65 or during your “special enrollment period” (for people who had group coverage beyond age 65), you can sign up during the general enrollment period that runs from January 1 until March 31. Coverage begins July 1.
Medicare Advantage’s new open enrollment period also starts on January 1. From this date until March 31, people already enrolled in a Medicare Advantage plan can move to a different Advantage plan or switch to traditional Medicare.
Jan. 15. If you are paying estimated taxes for 2018, this is the deadline for fourth quarter 2018 payments. But you can skip this deadline if you file your 2018 taxes by January 31 and pay the remaining balance at that point.
As you start working on your 2018 tax return, consider whether you should adjust your withholding for this year. “Tax reform lowered tax rates, so you may have had more tax withheld for 2018 than needed,” says Bradford. If so, check to see if you should withhold less for 2019, which will put more money in your pocket now.
Jan. 31. By this date, all 1099s and W-2 forms should be mailed out, says Chad Parks, chief executive officer of Ubiquity Retirement + Savings, a retirement-plan provider for small businesses. Once you receive your forms, review them closely for any errors.
March 31. Traditional Medicare general enrollment and Medicare Advantage open enrollment periods end.
April 1 If you turned 70½ in 2018, April 1 is the deadline to take your first required minimum distribution from your IRA or 401(k). First-timers get this one-time extension on their RMD (subsequent RMDs must be taken by December 31). To figure a first RMD due on April 1, 2019, divide the account’s 2017 year-end balance by a life expectancy factor based on your birthday in 2018. Find the factor in IRS Publication 590-B.
If you turn 70½ in 2019, you might consider taking your first RMD this year, says Bradford. By delaying the first RMD to the following year, you have to take both your first and second RMDs in the same year.
Keep in mind that while Roth IRAs don’t have RMDs for the original owner, Roth 401(k)s do have RMDs.
But if you are working past age 70½, you can skip the RMD from your current employer’s 401(k) if you don’t own 5% or more of the company. You’ll still need to take RMDs from your IRAs and any 401(k)s you hold from prior employers, though.
April 15. The federal tax filing deadline for 2018 returns falls on the regular date in 2019. You can file for a six-month extension if you need more time, but you will still need to pay any tax owed by this date. And Parks notes that you have until this day to fund an IRA for the previous year—those 50 and older can stash up to $6,500 in an IRA for 2018.
If you will pay estimated taxes for 2019, April 15 is the deadline for the first estimated tax payment for the year.
If you have foreign financial accounts whose total value exceeded $10,000 at any time in 2018, this is the deadline to file the “FBAR,” Report of Foreign Bank and Financial Accounts, with the U.S. Treasury.
June 15. This is the deadline to pay estimated tax for the second quarter of 2019.
July 1. It’s officially midyear. In between trips to the beach or elsewhere, make some time to examine your tax picture for 2019. Size up your taxable income and whether there are any moves you can make now to keep your 2019 tax tab in check, such as increasing contributions to tax-advantaged accounts or doing an IRA qualified charitable distribution. Available to those age 70½ or older, the tax-saving QCD move allows the IRA owner to directly transfer up to $100,000 annually from the IRA to charity. The money can count toward the IRA RMD for the year, but it doesn’t show up in adjusted gross income.
Sept. 15. This is the deadline to pay estimated tax for the third quarter of 2019.
Sept. 30. By this date, you should receive an “annual notice of change” from your Medicare Advantage or Part D prescription-drug plan. Carefully review the notice to learn about any changes in cost or coverage that will take effect January 1.
If you inherited an IRA from an owner who died in 2018, this is also the deadline to split up the inherited IRA if multiple beneficiaries were named to the account. Heirs who want to stretch the account but forget to split it will have to take required minimum distributions based on the lifetime of the oldest beneficiary.
Oct. 15. If you filed an extension to turn in your 2018 tax return, time’s up—Uncle Sam needs your return by today.
Medicare open enrollment begins. From today until December 7, you can switch Medicare Advantage, traditional Medicare and Part D plans, with coverage effective January 1, 2020.
Nov. 1. In most states, early retirees who buy health insurance offered on exchanges under the Affordable Care Act can shop for 2020 coverage from today to Dec. 15.
Dec. 7. Medicare’s open enrollment period ends.
Dec. 15. The ACA’s open enrollment period ends.
By year-end, you must have required minimum distributions out of your retirement accounts. But “don’t wait to the last minute,” says Scaturro. He says he considers December 15 a hard stop for taking RMDs. Fail to take the RMD in time, and you will be subject to a 50% penalty on the shortfall.
Dec. 31. Any last-minute tax moves to shave your 2019 tax tab need to be made by today.
Dec. 31 is also the deadline to make 401(k) contributions or do Roth conversions for 2019.
Also, be sure you’ve made any charitable donations you want to count for 2019 tax purposes. And, notes Bradford, if you want to use the annual gift-tax exclusion of $15,000 per recipient to make gifts to individuals for the 2019 tax year, do so by this date.