January 2023
Financial Planning

By: Myra Alport

With 2022 in the rearview mirror, 2023 presents an opportunity to refocus on your financial well-being. This monthly planning guide gives you tips and ideas that can help as you’re putting together your plan—and regularly monitoring it—throughout 2023. The most successful plans aren’t set in stone -  they’re revisited and adjusted along the way.  Life happens!  Things can change throughout the year, but a thoughtful plan will help you stay focused on your ultimate goals.

January - Set Your Intentions

• Prioritize your financial and personal goals.  Are they aligned or disparate? Start categorizing by what’s urgent, what’s important, and what can wait.   Are your goals SMART:  Specific/Measurable/Achievable/Realistic/Time-Bound?

• Draft a flexible 2023 budget. Revisit your 2022 income and expenses as a guide.  What worked, what didn’t?  It always helps to have a backup plan in place when circumstances beyond our control pop up such as job loss, health issues, unexpected home repairs and life transitions.   

February - Prepare for Tax Time

• Get organized.  Gather last year’s receipts and records. Make sure you have access to all tax-related documents from your employer, pensions, annuities, Social Security and investment accounts.  

• Submit your 2022 tax return as soon as you’re ready but no later than Tuesday, April 18th for 2023!

March - Simplify Your Investments

• Have you changed employers recently?  When you move to a new company you can roll over your 401(k) from your previous employer to your new employer plan.  Another option is to roll it to an IRA.  Before moving that account consider factors like tax benefits, investment choices, and costs to determine what’s right for you.

• If you prefer to leave the old 401(k) behind, set a reminder to regularly review the asset allocation and your risk tolerance.  

• Automate investing. Contribute a set amount regularly to a tax-advantaged or taxable investment account.

April - Improve Your Financial Standing

• Review your debt.  Prioritize your debt repayments, particularly for those high interest rate credit cards if you carry balances. 

• Make your 2022 IRA or ROTH contribution by April 18, 2023.  Our office or your tax preparer can assist you with determining whether you can make a deductible contribution or not, as there are income limitations.

• File your taxes by April 18! 

• Check your credit report and credit score. You can access a free, monthly report from each major credit bureau.  Request yours by visiting www.annualcreditreport.com and resolve any issues that appear.    

May - Invest in Education

• Open a 529 account for your children or grandchildren.  Saving for college, graduate school, or vocational training can be more attainable with a 529 plan as the assets grow tax deferred. 

• The annual gift tax exclusion for 2023 is increasing to $17,000 per recipient. 

June - Midyear Checkup Time

• Revisit your spending plan.  Are you on track?  If priorities have shifted, adjust accordingly.

• Fund your emergency account. Assess whether you are targeting an appropriate funding level (typically three to six months of expenses for most households).  

• Review your memberships. Are you using them to their full advantage (e.g., subscription and streaming services, gym membership)? If not, reevaluate if you really need them.  

July - Commit to Your Financial Health

• Be aware of lifestyle inflation. Also known as “lifestyle creep,” this is the tendency to spend more on discretionary purchases as your standard of living improves.

• Practice mindful spending. Pause before you purchase anything deemed as a “want.” Waiting a self-assigned period, such as 30 days, before you buy will help make sure you really want a particular item.

August - Insurance Review

• Evaluate your insurance coverage levels.  Are you adequately insured for life, health, disability, liability, auto, and property? Research and pursue any discounts you might qualify for. 

• Independent insurance brokers have access to a wide variety of insurance carriers to provide the best coverage at the best rates.  They work for you, not the insurance companies they represent.

September - Fall Focus - Organize and Give Back

• Gather your important documents, including tax returns, legal and estate planning documents, statements, and bills of sale, and store them as appropriate—electronically or as hard copies.  Make sure your family members know where they are stored in case of an emergency. 

• Consider tax-efficient ways to make charitable contributions, such as through a donor-advised fund (DAF), a Qualified Charitable Distribution, appreciated stock or directly from an IRA if you are RMD eligible.   

October - Be Cybersecurity Vigilant

• Protect your passwords. The most effective passwords contain uppercase and lowercase letters, numbers, and symbols and do not contain words found in a dictionary.   

• Consider a password manager, which is an encrypted digital vault that stores secure password login information on your computer, tablet or mobile device.   Many are free or offer a free trial period. 

  NOTE:  Whatever method you choose to save your login information, be sure to let a trusted family member know how to access it. 

• Where offered, set up multi-factor authentication (MFA). MFA provides an extra layer of security to prevent someone from logging in to your account. Once set up, in addition to your password, you will enter a one-time security code sent to your chosen method (text, email or call). 

November - Focus on Family Matters

• Have open discussions with your children about money. Kids model their own financial behavior by observing yours.  As you prepare for the later years of your life, you may want to involve your grown children in the conversation. Your plans can impact their futures, too.  

• Update your estate plan. Take into consideration the tax consequences on your estate and your heirs’ income needs. Review and update beneficiary designations on your various policies and accounts.

• Have you reviewed your Medicare options for 2024?  Open enrollment runs from Oct 15-Dec 7. 

December - Prioritize Your Retirement

• Prepare for your retirement. Aim to save at least 15% of your salary (including any employer plan contributions) across your retirement accounts.

• Take your required minimum distributions (RMDs) before Dec 31 from these retirement accounts as applicable:  Traditional IRA, Rollover IRA, SEP, SIMPLE and old 401(k) plans.  If you are still working, you may qualify for an exception from taking an RMD from your current employer retirement account. 

• A new RMD rule goes into effect in 2023.  The age to start taking RMDs jumps from 72 to 73.

• Pay special attention to the provisions of any Inherited IRAs.

Most importantly – come meet with us!  We are here to help provide the framework for your financial plan, help you set objectives and monitor your progress.  We will look forward to talking with you this year and helping to maintain your financial health.   

If you have questions, please contact us.

MARKET UDPATE
FRAUD ALERT
TAX PLANNING
401(K) ALLOCATION

To download the January 2023 Newsletter: CLICK HERE