Your 2019 Finances and Steps You Can Take Now
by Pattie Christensen, ChFC, RICP
Fall is a busy time for everyone. We see back to school sales, then suddenly Thanksgiving is right around the corner! The new year may seem far off, but now is the perfect time to look ahead at your finances. Here are a few options to consider that may help your financial fitness:
Starting a Health Savings Account
Healthcare costs can add up. If you are enrolled in a Consumer-Directed Health Plan, you may want to think about enrolling in a Health Savings Account (HSA), which enables you to put money aside from your paycheck and pay healthcare costs using pre-tax dollars. Putting those dollars aside before taxes are taken out saves you money, which gives you more money to pay your bills.
Both you and your employer can contribute to your account, all funds deposited belong to you, and they grow tax-free. You have the flexibility to pay for a medical expense with money from your HSA account, or out-of-pocket, and if you change employers or retire, in some cases, you can take your HSA account balance with you.
Learn more about starting a HSA and review the health insurance information under the “Insurance” tab. Click here if you are clergy, and click here if you are a lay employee.
Housing Allowance Resolution for Clergy
If you are clergy, a critical financial step you can take for 2019 is to make sure that you are getting the most from an important tax benefit, your clergy housing allowance. Whether you are in church-provided housing or own or rent your home, your vestry must adopt a housing allowance resolution prior to the new year in order for you to be eligible for a housing allowance exclusion. Otherwise, you could lose this important tax benefit.
If you are receiving your pension benefit, 100% of it is designated as a housing allowance. However, it’s up to you to determine how much of your pension benefit is actually excludible from your gross income for Federal income tax purposes based on IRS regulations.
Want to know more about this? We thought so, which is why we created a short Clergy Housing Allowance eLearning Course. You can also learn more by reviewing the 2018 Tax Guide for Episcopal Ministers or calling our Tax Hotline (Nancy Fritschner, (877) 305-1414 or the Rev. Bill Geisler, (877) 305-1415).
Looking to lower your federal taxable income in 2019?
We all want to keep more money in our pockets and give less to the IRS. The good news is that you can. Consider increasing your pre-tax contribution from your paycheck to your retirement savings plan. You’d be surprised what a difference a 1% increase in your contribution may make.
To increase your payroll contribution: Log into your Fidelity NetBenefits Account. If you are not yet enrolled in a retirement savings plan and wish to learn more, contact CPG’s Client Services at (866) 802-6333, Monday–Friday, 8:30AM–8:00PM ET (excluding holidays).
Pattie Christensen serves as Vice President for the Education & Wellness Department of the Church Pension Group. She has oversight responsibility for the development and management of financial and health education programs and resources. Pattie has received both the ChFC® (Chartered Financial Consultant) and the RICP® (Retirement Income Certified Professional) designations through the American College of Financial Services.