Are you Financially Ready for 2023?

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Are you Financially Ready for 2023?

Another year is coming to an end, but if you’re in the midst of planning for your golden years, the best time of the year is often the busiest time of the year. Here’s what you should be keeping up to date with as we approach 2023.

Did you make any resolutions concerning your personal finances last January? How would you say those goal played out?

For many people, this year has been quite a roller coaster ride. With inflation, war and the aftermath of the pandemic, you may have been met with unprecedented uncertainty about your financial future. Fortunately, there is time left to evaluate, assess, and prepare to rebuild your financial foundation for 2023 with one key planning strategy…

Year-End Checklist

If you’ve been slow to tackle your financial to-do list this year, consider completing your checklist before the end of the year. The last month of the year are a perfect time to create and go over a Year-End Financial Planning Checklist—ideally in partnership with your trusted financial advisor.

Your year-end checklist should include:

Tax Advantaged Accounts Limits 2023

For people who have a retirement account outside of their employer, annual contribution limits have increased for both traditional IRAs and Roth IRAs. In 2023, eligible individuals can contribute up to $6,500, up from $6,000, to their IRAs.

Having a tax meeting at the end of the year means you are taking a proactive approach to tax planning – including important updates and changes – which better ensures that you won’t end up giving the IRS any more of your hard-earned money than you absolutely must. Including changes like…

Charitable Donations

Don’t let the IRS take your charitable contribution deductions.

One very useful and popular potential tax strategy to look at before the end of the year is charitable contributions since the deadline for deducting contributions is traditionally December 31. Annual income tax deduction limits for gifts to public charities, including donor-advised funds, are 30% of adjusted gross income (AGI) for contributions of non-cash assets, if held more than one year, and 60% of AGI for contributions of cash.

Rather than donating cash, some people donate appreciated securities, which may also allow you to avoid a capital gains tax.

Estate Planning

As you get older, the likelihood that a significant portion of your retirement savings will need to be put toward healthcare costs and long-term care increases.

It’s a good idea to review your health insurance and health savings accounts every year, even if your health status hasn’t changed from the previous year.

Health Insurance

As you get older, the likelihood that a significant portion of your retirement savings will need to be put toward healthcare costs and long-term care increases.

It’s a good idea to review your health insurance and health savings accounts every year, even if your health status hasn’t changed from the previous year.

Risk Assessment

Everyone wants to maximum return with zero risk from their savings and investment strategies. The end of the year is always a good time to assess your risk because – as the last few years have shown us – market performance can change dramatically from year to year, and many analysts and advisors have valuable insights to share about what the coming year may hold in store.

Check out the ‘Strategic Insured Portfolio’ from CKS Summit Group here for clients who wish to mitigate risk in their portfolio.

Future Goals

The best way to make sure you are on track to meet your retirement goals is to identify specifically what those goals are and revisit them each year.

Goals can change, and sometimes they must be adjusted in response to new developments and circumstances in your life. By the same token, your financial strategy may periodically need to be adjusted to make sure it still aligns with your goals and doesn’t jeopardize them, which sometimes happens.

Last Thoughts

The holidays may seem more a time of spending than planning and saving. But, if by taking the time and effort now, you can indulge in your generosity without feeling guilty or fearful that it’s going to come back to haunt you.

If you’ve been slow to tackle your financial to-do list this year, there’s still a few weeks left to reach out to your financial advisor and get your year-end checklist in place.

Contact the retirement income experts at CKS Summit Group here to get you started.