| Special to USA TODAY
What to do with your 401(k) in an unstable marketCoronavirus has created instability, but it’s important not to panic and don’t lose your cool about your 401(k) either.Buzz60If you’re excited to see the end of 2020, you’re quite obviously not alone. But don’t be in too much of a hurry because these last few weeks offer a great opportunity to set your financial life on the right path as 2021 begins. In many respects, the last 12 months have been financially painful for tens of millions of Americans. But as the economy begins to recover, it’s vital to resist the urge to let the pain linger and paralyze you from restrengthening your own position. It’s important you begin to map out next year and consider its overall impact on your financial future. Always start with topping-off tax-advantaged accounts for the current tax year (2020).This means stuffing some additional funds in employer-sponsored retirement plan, Individual Retirement Accounts (whether Traditional or Roth), 529 college savings plans (which could have state tax benefits depending on what state you live in), and Health Savings Accounts (HSA).A better year ahead?More than half of Americans are optimistic about their finances in 2021Can manufacturing come home? American manufacturers pine for home as COVID disruptions, Trump tariffs shake up suppliesNot only will this help build savings for long-term stability, it will also help mitigate tax obligations.Boost 401(k)s, lower taxesYour 2021 becomes instantly better when you owe less in taxes for 2020 than you thought. This will result in either a lower tax payment come April 2021 or a more substantial tax refund in early 2021. Talk about an instant boost in cash! If you play your cards right, your end-of-the-year tax strategy should always provide dual victories (increased long-term savings and decreased tax obligations). Depending on the benefits elections you likely made in late fall, your January 2021 net pay could look much different than it did this month (December 2020). Simply put, your monthly health insurance premium increase, assuming your premiums went up, will impact your take-home pay. And whether or not you have a pay increase on the horizon in the new year, you should take advantage of your net pay change, to further your financial stability even more. In other words, if you’re going to be forced to reconfigure your budget, go ahead and increase your retirement plan contribution by a percent or two while you’re at it. You’ll hardly notice the difference.For example, let’s say you earn $50,000 annually and you want to increase your retirement plan contribution by 1%. If you get paid bi-weekly, increasing your contribution would decrease your gross pay by only $19 per pay period, and the net decrease would be even less than that, depending on your tax rate. If this doesn’t scare you, increase your contribution by 2%. Again, not only will this help create more long-term stability, but it will decrease your tax liabilities as well (if you’re making pre-tax contributions). You don’t have to make New Year’s resolutions to make the beginning of a new year matter. I don’t quite believe in resolutions but if you feel like they give you that fresh-start feeling, then do it. However, the real goal is to create sustainable, positive momentum.The problem with 2020 was that many people had a devastating March, and then they scrambled deep into the fall to regain their financial footing. If that footing has returned, you should absolutely be intentional about swinging the momentum back the other way.Both good fortune and bad fortune can happen to you randomly, but good financial planning can ensure your path forward is more positive than negative. Invest the time here in the final weeks of 2020, and you’ll reap the rewards for years to come.Peter Dunn is an author, speaker and radio host, and he has a free podcast: “Million Dollar Plan.” Have a question for Pete the Planner? Email him at AskPete@petetheplanner.com. The views and opinions expressed in this column are the author’s and do not necessarily reflect those of USA TODAY.