The fact that 2023 will be a difficult year is inevitable, financial plan May be useful for new year.
From soaring inflation and rising interest rates to the ongoing effects of the pandemic and war in Ukraine, we can expect economic conditions to remain unpredictable for the foreseeable future.
But while there’s not much we can do to influence global macroeconomic and geopolitical conditions, there are plenty of ways to keep our finances healthy enough to handle whatever happens in the next 12 months. I have.
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From cold, hard math to intimate relationships, here are 10 financial planning considerations for the new year.
1. Audit the beneficiaries.
Now is the time to check all your savings accounts, insurance policies, and retirement plans to make sure that the designated beneficiary (i.e., the person to whom your money will go if you die) is each the person you want. Now is a good time to check. Be.
2. Increase the tax withholding limit.
increase withholding tax For example, if you earn $250,000 in 2022 and use up your contributions before age 49, you will have an 8.2% withholding rate ($20,500 saved annually). To take full advantage of the increased $22,500 cap, we plan to increase it from 8.2% to 9% (a 9.76% increase) in 2023.
On the other hand, for those aged 50 and over, 11.1% is the appropriate annual withholding rate increase to take full advantage of the new $30,000 limit. If your 2022 contributions have not reached the cap, you should also consider increasing your withholding tax level by 10% in January or 2.5% quarterly to reach 10% by the end of 2023.
3. Make the most of HSA.
a Health Savings Account (HSA) You can set aside money on a pre-tax basis to pay for eligible medical expenses you incur. It is also the last triple duty free investment vehicle available. Make sure you are using it.
4. Decide how you will use the Social Security wage base “pay increase”.
In 2023, Social security Add 6.2% of your salary until you earn $160,200. So if you make $200,000, 6.2% will be deducted from your monthly salary until you reach that $160,200 base (if you earn $200,000 a year, your monthly salary is $16,667, so it will take about 10 months).
After that, Social Security is gone and you get an automatic “salary increase” of $1,033 (6.2% of your monthly salary of $16,667) in November and December.
Instead of letting that money dissipate in your daily expenses, consider intentionally investing it in savings. The more you earn, the faster and bigger this raise will be. Doing this for your entire career can be quite the nest egg.
5. Leverage RMDs.
Government-mandated minimum distribution (RMD) regulations require you to begin drawing down your IRA or 401(k) savings the year you turn 72. These payments are subject to tax.
So if you already have enough money to cover your lifestyle, why not start planning. Invest directly in charities with RMD instead? You’ll be supporting a cause you’re passionate about without paying taxes on your money.
6. Invest in self-care.
Maintaining your physical and mental health has never been more important, so set aside time and money at the beginning of the year to fund self-care. In particular, make sure he plans at least one long vacation (a week or two) and three short vacations of say 4-5 days. You can use that time to charge the engine. This is even a smart way to use the automatic “pay raise” mentioned in Tip 4.
7. Review your parents’ plans.
It’s hard to think about, but there may come a time when parents can no longer take care of themselves. Therefore, I encourage you to discuss their financial portfolio and how you would like to manage your operations in the future with them now. That way, you’re less likely to have unpleasant surprises later that affect your plans.
8. Get your kids involved.
Just as we need to understand our parents’ plans, Make sure your kids understand you – if they are old enough to accept it all, of course! Have an open discussion about your financial situation and the values, causes, and ethics you believe in.
9. Decide which relationships to focus on.
Most of us wish we had more time to spend with our friends and family, but we feel the hectic pace of modern life is getting in the way. So now is the perfect time to reflect on those we met enough in 2022 and those we didn’t. You can then plan how you will invest your time and energy in nurturing the relationships that matter to you in the coming year.
10. If you’re a business owner, accelerate your savings.
One very effective way to stay ahead of inflation is to increase your savings. If you are a business owner and have sufficient cash flow, you should consider investing in a cash balance plan.
This can save you up to $343,000. Furthermore Contribution to your 401(k) and profit sharing. Remember, contributions to a well-structured cash balance plan are fully tax-deductible, so they’re a great way to accelerate your savings and build your retirement nest egg.
