Your 2022 Year-End Financial To-Do List

As the year wraps up, it can be a great time to take financial inventory. Your circumstances are constantly changing and evolving, and the proper financial plan is not meant to be a set-it-and-forget-it thing. With the end of the year presenting the perfect chance to revisit your goals, here are a few areas you may want to check in on before we flip the calendar to 2023.

1. Review Your Financial Plan

As the year comes to a close, it can be a great idea to reassess your financial circumstances and make necessary adjustments to your financial plan. Maybe your goals have changed. Maybe you’re on a fast-track toward goals you expected to take longer to reach, so you can move some dates up. And remember, it’s always important to make sure that your beneficiaries are up to date annually on all of your accounts, investments and insurance policies.

2. Adjust Your Monthly Budget

Now that we’re in the final month of the year, you may be in a good position to revisit your budget and adjust as needed. Maybe you received a nice annual bonus or raise, or maybe you’ve recently had a baby and haven’t had a chance to fine-tune your budget through the sleepless nights. No matter your circumstances or the new milestones and stages of life you reached in the past 12 months, it can be a really good idea to take a look at how your income keeps up with your expenditures and tweak accordingly.

3. Review Your Investments

It’s important to know that diversifying with different asset classes can help protect your overall portfolio, especially important during times of increased market volatility. Be sure that your investment portfolio positions you with a level of risk you’re able to tolerate, especially as you get closer to retirement.

4. Recalibrate Your Retirement Account Contributions ^[1,2,3]

As you traverse your career and attempt to carve out a lifestyle that will be sustainable once you get the chance to quit working and chase your retirement dreams, it’s important to know how much you’re allowed to contribute to your various accounts. In 2022, the contribution limit is $6,000 for traditional and Roth IRA accounts, and it is $20,500 for 401(k)s. In 2023, those limits will increase to $6,500 and $22,500, respectively. If you’re 50 or older, you’ll also be able to make catch-up contributions of up to $1,000 to your IRA and $7,500 to your 401(k) as soon as the new year hits.

5. Take Your RMDs ^[4]

If you turned 70 after July 1, 2019, you must begin taking required minimum distributions, or RMDs, at age 72. Failure to adequately withdraw funds will result in a 50% excise tax, and the deadline to withdraw the minimum amount from tax-deferred accounts is Dec. 31. If you’ve reached the age at which you must take the distributions, withdrawing the proper minimum amounts from the correct accounts can help you avoid a hefty penalty.

6. Spend Money Left in Your FSA ^[5]

Unlike health savings accounts (HSAs), flexible savings accounts (FSAs) do not typically allow you to roll your excess funds into the next year. You may have a grace period provided by your employer, but even the grace period often comes with a limit as to how much can roll over. Some ideas to avoid losing funds left in your FSA include booking general wellness appointments like visits to the eye doctor, annual physicals and dental cleanings.

7. Talk to Your Financial Professional or Advisor

The job of a financial professional, planner or advisor is to assist you with your unique circumstances and goals, helping you set realistic and reachable objectives while inspiring you to stretch farther and drive harder toward your ideal portrait of a comfortable lifestyle. Whether you’re looking to check off all of these boxes as the year ends or start 2023 with fresh goals, we can help!

For more information on how to prepare for the New Year contact us. You can reach Dawn Potts, AIF® at (913) 320-2069 or schedule an appointment with her directly online here. https://calendly.com/dpotts29