Welcome to Financial Wellness Month, January 2025—a perfect time to take control of your financial health. The new year brings a fresh opportunity to reflect on personal financial goals and make decisions that can enhance your long-term financial stability. As we navigate through 2025, we face both challenges and opportunities, including legislative changes, increased savings options, and emerging financial technologies. Here are some key areas to focus on to establish a solid financial foundation for the year ahead.

Enhance Your Health Savings

With healthcare costs continually rising, it’s vital to maximize the benefits of a Health Savings Account (HSA). For 2025, the annual HSA contribution limits have increased to $4,300 for individuals and $8,550 for families. HSAs offer triple tax advantages: tax-free contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses. Consider maximizing your contributions to cover future healthcare costs while enjoying these tax benefits.

Prepare for Potential Tax Changes in 2026

Anticipate shifts in tax law when the Tax Cuts and Jobs Act expires in 2026. Tax rates, deductions, and credits are expected to change, including the return of the alternative minimum tax and adjustments to state and local tax deductions. Plan now to minimize your tax liability, possibly with the guidance of a tax professional, to stay ahead of potential increases.

Take Note of the 401(k) Automatic Enrollment Under SECURE 2.0

The SECURE 2.0 Act mandates automatic enrollment in 401(k) and 403(b) retirement plans starting in 2025, with exceptions for small businesses. This measure enhances participation, benefiting employees and employers alike. Stay enrolled unless a compelling reason exists to opt-out, as it's a robust tool for building retirement savings.

Plan for Higher Retirement Account Catch-Up Contributions

Under SECURE 2.0, individuals aged 60 to 63 can leverage increased catch-up contribution limits in their retirement accounts. The new limit allows up to $10,000, or 50% more than the regular catch-up amount. Use these higher limits to bolster retirement funds during the critical pre-retirement phase.

January is the perfect time to take stock of your personal finances and prepare for the future. Stay informed about legislative changes, retirement planning, tax preparation, healthcare savings, and technology adoption. By making small, proactive changes today, you'll position yourself for lasting financial stability and success. Review your current financial plans, explore new tools, or consult a financial advisor to optimize your financial health for 2025. Start now by staying informed and proactive, ensuring you’re well-prepared for the year and beyond.