The Early Bird Dividend

The Start of the Year Offers Some Unique Opportunities to Feather Your Nest.

- Kelley Holland

PROCRASTINATORS, LISTEN UP. By checking certain financial tasks off your to-do list now instead of leaving them for the last minute, you won’t just feel better—you’ll also bank some serious coin. Contribute to an IRA in January instead of next April, for example, and you could be sitting on thousands of extra dollars come retirement. “The impact can be significant over time,” says Maria Bruno, CFP, a senior investment strategist at Vanguard. Here are six smart first-minute moves to get 2017 off to a profitable start.

FUND YOUR ACCOUNTS

Get a 15-month head start.

Nearly one-quarter of all IRA contributions for 2017 won’t be made until next April, just before the taxfiling deadline. But you can boost savings by 10% or more if you contribute as soon as the law allows (see the chart below). To take full advantage of the extra months of growth, make sure your money is invested from the get-go in an age-appropriate mix of stocks and bonds or a target-date fund. Vanguard studied how people invest their IRA contributions and found that four months out, roughly two-thirds was still parked in low earning money-market funds.

Maximize tax benefits.