STRATEGIES

A lot of staying safe has to do with relaxing and sticking to the plan you have, writes MoneyShow's Terry Savage.

Relax. The headlines tell you that there’s a fiscal Armageddon ahead—and right now, there’s nothing you can do about it. You’ve had your chance to speak by voting. Now, hopefully our representatives will listen.

Despite all the headlines, and the political posturing, your financial life will go on. And there’s nothing you can do now about tax rates or tax breaks that will apply to next year.

Any changes in the tax code will have an impact on our collective behavior in the year ahead. You can be sure of that. But for the year 2012, which is about to go into the record books, your options are limited. Stick with your plan.

So here are some financial things to think about as we head into year end. These are steps you can take to move your life forward, without waiting to see what Congress does next to place roadblocks—or give you an assist—toward your goal of financial independence.

1. Keep Saving
It doesn’t matter what the tax rates will be on dividends or capital gains. In fact, higher taxes mean you need to save even more to build your future. So make sure you’ve taken advantage of all opportunities.

Check with your employer to make sure you’ve maxed out your 40l(k) contributions—or at least up to the employer match. Now is the time to make arrangements to have more taken out before the end of December. And if you qualify for a Roth IRA (adjusted gross income under $125,000 on a single return, or $183,000 on a joint return, make a contribution to grow tax-free for retirement (up to $5,000, or $6,000 if age 50 or older).

2. Keep Investing
Yes, there are dozens of reasons for the stock market to decline—and most of them center around Washington, and the possibility of an economic slowdown.

But every summer for the past four years, there have been predictions of another recession around the corner. And predictions of a stock market decline. Don’t follow the crowd—stick with your regular monthly contribution to your retirement plan, whatever the level of stock prices.