Each plan has rules about how to contribute and the maximum amount allowed. Up to the levels allowable by law, these contributions are made on a pre-tax basis. They have the added benefit of reducing your adjusted gross income, the basis for determining many of the itemized deductions. Year-end is a good time to review your current levels of contributions and related investments in order to plan and implement changes in the year 2000. Under many plans you may now adjust your contributions anytime during the year.
New provisions allow for more flexibility in planning.
You also may periodically ajdust your investment choices offered within the plan. It is recommended that you review your investment strategy and results on a quarterly basis. You may wish to consider ways to leave it to family members and charity while at the same time minimizing your tax liability. For some people this makes the Roth IRA a useful retirement and estate planning tool. Contributions for 1999 may be made anytime up to April 15, 2000.