What financial, business, or life priorities do you need to address for the coming year? As we approach the end of 2022, it’s a good time to think about the investing, saving, or budgeting methods you can employ toward your 2023 objectives.
For starters, what changed for you this year? Did you change jobs, retire, or start a family? If notable changes occurred in your personal or professional life, it is a good idea to review your finances before this year ends and the new year begins and plan for 2023.
Next, review your current finances. Do you have the recommended three to six months of emergency savings? Are there expenses you can cut? Can you contribute more to your retirement account? Take some time to update your budget, which can help you work toward your financial goals.
When it comes to your finances, there are plenty of money moves to consider. Here are some ideas to get you started.
Maximize Your Retirement Account
If you’re participating in a 401(k) or 403(b) account, are you maximizing your contribution? In 2022, you can contribute up to $20,500. If you’re 50 or older, you can contribute up to $27,000.
Make a Charitable Gift
When you donate to a qualified charity or non-profit organization before the end of the year, your gift may qualify for a tax deduction.
Use Your FSA Funds
If you have any unused funds in your flexible spending account (FSA), make sure you use them before the end of the year. FSAs are subject to the “Use It or Lose it” rule that generally requires you to spend your entire FSA balance before the end of each plan year or forfeit the remaining FSA funds to your employer. There are some exceptions, so it is best to understand your plan’s rules.
Maximize Your HSA Account
A Health Savings Account (HSA) works similarly to your workplace retirement account in that it allows you to set aside money on a pre-tax basis. There are some HSA rules and limitations, including that the funds can only be used to pay for qualified medical expenses, but consider contributing the maximum allowed by the IRS if you can.
Don’t Forget Your RMD
If you’re 72 or older, your required minimum distribution (RMD) decisions are needed before December 31. RMDs are the withdrawals you have to make from most retirement plans when you reach the age of 72.
There’s a lot to think about when it comes to financial planning. These ideas can help get you started, but are not a replacement for real-life advice. So, make sure to speak with a professional who understands your situation before making any changes.
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