Posting on behalf of Manisha Thakor, CFA

When it comes to numbers – we are all swimming in them. We have our home phone numbers, our cell phone numbers, our bank card PIN numbers and the list goes on and on. So when it comes to getting your finances back on track, here are three numbers that everyone should know as they head into 2009!

* $16,500 – This is maximum amount that you can contribute to your 401(k) plan if you are under the age of 50. With the scary market of 2008, a lot of people decided they didn’t want to go there. However if history is any guide, this is a great time to be adding to your retirement funds if you are young. The market is low and if you are under 50 you have time on your side. If you are over 50, the government is giving you some added turbo juice – you can put in an extra $5,500 for a total annual contribution of $22,000. A couple things to note. First, if your employer matches – meaning for every $1 you contribute they will put in $0.50 or $1.00 up to some predefined amount – you DEFINITELY want to do this. It’s free money. Second, it’s not enough to just sign up for your 401k / 403b / 457 plan, you have to specify what you want your funds invested in. If investing over whelms you, a target date retirement fund can be a great keep it simple option. Third, don’t touch this money unless it’s a life or death emergency.

* $5,000 – This is the maximum amount you can put into an IRA (individual retirement account) if you are under the age of 50. A lot of people don’t realize that you can have both a 401k and an IRA. If you are single and make less than $104,000 or less a year – or if you are married filing your taxes jointly and make less than $166,000 a year you can contribute to a special kind of IRA called a ROTH IRA These are special because you pay taxes on the money before you put it into the account but then when you take it out in retirement it’s all yours, no more taxes ever. Oh, and if you are over 50 you can add an extra $1,000 a year for a total contribution limit of $6,000.

* $5,950 (& $3,000) – This is the maximum amount a family (& a single filer, respectively) can contribute to an HSA (Health Savings Accounts). These are “tax-advantaged” savings accounts available to anyone who has a “high deductible” or “catastrophic” health insurance plan (“HDHP”). An HDHP generally costs less than what traditional health care coverage costs, so the money that you save on insurance can therefore be put into the Health Savings Account. You get an “above the line” tax deduction on the money you contribute and you do not have to pay taxes on the money you take out if the funds are used for qualified medical expenses. As an added bonus, unlike flexible spending accounts, the money can roll over from year to year and be used for any qualified medical expense (withdrawals for other uses will be taxed in a similar fashion to early withdrawals on IRAs)

No doubt, it’s scary out there. Our economy is going through a very rough patch. The best thing each of can do to protect ourselves is to focus on we can control. If you’d like to learn more about taking charge of your financial life, visit my site at

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