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Making Sense of The Chaos

Amid the Financial Changes Are Some Opportunities

As a control freak I hate all the changes and uncertainty floating around the financial world that may or may not affect my personal economy in the near future. Will the mortgage interest deduction be cut, will the 401k deduction be lowered, will education tax credits be voided? Why is the Federal Reserve Chair, Janet Yellen being replaced?

It seems everything is up for grabs and so it’s important to take advantage of financial opportunities immediately, because they may literally be gone tomorrow. I wanted to update you on a few things that I’m still happy about that you might want to take advantage of.

I-bonds:

On November 1, 2017, the new I-bond rates moved to a recent all-time high of 2.58%. This is not only an awesome rate but it’s a very safe investment that you can throw money into if you have any concerns about the extended bull market that we are currently in.

Savings accounts:

American Express Personal Savings currently has an interest rate of 1.25% and they work to stay competitive. I’ve received notices that my interest rate was going up no less than three times this year. You can find a higher rate of 1.30% at Barclays and Goldman Sachs, to name a few. But ultimately, you’ll have to decide which bank gives you the most of what you want and then stay awhile. I never found it worthwhile to chase fractional rate increases. Pure Point online bank also offers a 1.30% interest rate but it requires a $10,000 minimum to open. This is the highest that online bank rates have been in a long time. It’s nice to see the pendulum swinging in the savers’ direction.

401k’s and IRA’s:

The 401k contribution limit has increased $500. That brings the yearly maximum to $18,500. The increase was given to cover inflation. As for the IRA, both traditional and Roth, the maximum will remain at $5,500 per year. However, if you are 50 or older you can make catch-up contributions, which allows for an additional $6,000 into your 401k and $1,000 into your IRA (Roth and traditional). That means if you are 50 years old or older, your 401K maximum for the year is $24,500 and your IRA maximum is $6,500 (Roth and traditional).

I don’t have a 401K at my current job and this would have been a major disappointment, but my last job didn’t offer one either (even though they continued to promise they would implement one). I thought I was going to be at my last job for the long haul, so I had to really educate myself on 401K alternatives two years ago.

These are some of the many financial fine tunings I have planned for the new year. What are some of the financial fine tunings you plan to make as you march to financial wealth?

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Copper Cotton

Written by Copper Cotton

Copper2Cotton is a money blog following one person's journey to reach $1 million net worth. This blog will not only show the author's progress, but also give financial tips and insight for anyone who wants to be wealthy.

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