The end of 2022 is fast approaching, and the Legacy Private Trust Company experts have put together this year-end financial planning checklist to help you “winterize” your finances. It is important to ensure that you are ready to head into the new year with a safe and secure financial plan and a full understanding of your current assets and responsibilities.
- Review Seasonal Expenses. With all the concerns surrounding shipping delays and product shortages this year, it’s possible that you have already wrapped up your holiday shopping ahead of time. However, other seasonal expenses could still impact your annual budget. Make sure to review and account for the cost of holiday gatherings, holiday tips for any of your service providers, and any costs associated with preparing recreational vehicles or properties for winter.
- Finalize Charitable Giving. Another seasonal expense may be sending charitable organizations you support an additional holiday donation. The end of the year is a great time to donate and a great way to reduce your taxable income. Ensure that you choose IRS-approved nonprofit organizations, and keep all tax receipts for writing off your donations.
- Consider Additional Retirement Contributions. Planning for retirement needs to be done year-round, but year-end is as good of a time as any to max out your IRAs or 401(k) contributions and review employer-matching amounts if applicable. In 2022, your total contributions to your IRAs may not exceed $6,000 ($7,000 if you’re age 50 or older), and your 401(k) deferral limit is $20,500.
- Review Your Credit Report. As of the last year, over one-third of Americans have discovered at least one mistake in their credit report. Credit reporting errors can lead to credit score damage, loan denials, or debt being incorrectly sent to collections. The effects of this type of damage can trickle down into other aspects of your financial life. While the process of disputing and correcting any errors can be lengthy, it is worthwhile to avoid costly mistakes.
- Make Financial Resolutions. New Year’s resolutions often have a bad reputation for being short-lived or unattainable, and financial resolutions are no exception. However, if you know the mistakes to avoid when setting these goals, you’ll find much more success. Make sure you set specific, measurable, achievable, relevant, and timely (SMART) goals that allow you to break an overall goal into actionable steps. Additionally, consider any recent or upcoming financial milestones that may impact these goals, such as buying a house or a car or getting married.
- Review Your Estate Plan. The holiday season is about spending time with friends and family, and these activities can be a good reminder of those you want to provide for financially. Year-end is a perfect time to begin or revisit your estate plan and ensure that your beneficiary information is correct to ensure your loved ones are taken care of.
- Have A Financial Conversation. Knowing your individual financial goals and situation is great, but if you have a partner or children, they can greatly influence your plan. Take the time to converse with your partner about your shared goals, and hold each other accountable for meeting them. It is important to ensure that you and your partner are on the same page. Additionally, the holidays are a great time for youth financial education. Talking about money early on in life helps children develop good financial habits like setting limits on spending and resisting impulse buys. Set your children up for success by giving them the tools they need to understand finance.
We know year-end is busy, and the last thing you may want to spend time on are financial details. However, fitting in a few money tasks before the end of the year will put you in a good place to kick off a successful 2023. The Legacy Private Trust Company advisors understand that when you envision the future, your picture includes celebrating successes, enjoying special moments, and securing a family legacy that offers opportunities to the people you love. Our financial planning services hone in on your goals, and together we chart a plan for achieving those goals.
If you are a Legacy client and have questions, please do not hesitate to contact your Legacy advisor. If you are not a Legacy client and are interested in learning more about our approach to personalized wealth management, please contact us at 920.967.5020 or firstname.lastname@example.org.