TIP 1 Maxing Out Contribution and Limits for Next Year
December usually means looking back and seeing a multitude of accomplishments, but sometimes it also means recognizing missed opportunities. Some of those opportunities can still be capitalized on, like maxing out your contributions to tax-preferred plans. If you haven’t made your IRA contributions for 2022 ($6,000 for those under 50, $7,000 for those 50 and over), there is still time to make contributions.
Next year the IRA contribution limits are being increased: $6,500 for those under 50 and $7,500 for those 50 and over. That’s not the only limit being increased either. If you are fortunate enough to have an employer that offers a 401(k), that limit is going up from $20,500 to $22,500. Even better if your employer offers a match. The gift tax exemption is going up too – from $16,000 this year to $17,000 next year. These increases may not seem like much but given a multi-year approach of maxing out these benefits can make substantial increases in overall family wealth.
TIP 2 A “Gift” for Your Trust Officer
Wish lists can be hard to create. You have to figure out what’s appropriate within a budget, what you want but don’t have, and how you can return the favor.
For Garden State Trust Company, the number one item on our trust officer’s wish list is a referral to someone else we could be of service to. We know it’s not free, as someone puts their reputation on the line to give it and you need to take the time to consider that and to make the actual referral.
We hope to return the favor with honest feedback, and no high-pressure sales tactics, and the excellent service that would merit the referral. It’s a gift not only to the trust officer, but to the person you refer. Finding a provider, you like, and trust isn’t easy after all, and for multi-year relationships like we have, it’s a gift that keeps on giving.
TIP 3 Opportunity Costs in Retirement
Retirement, the golden years, should offer the grandest adventures of all. However, making retirement dreams come true comes along with many barriers and transitions: financial, emotional, and physical.
The financial barrier seems like it’s the easiest to understand ahead of retirement, because dealing with income management is part of the everyday life of the working man or woman. However, the income management in that life stage is based on accumulation and saving for the eventual distribution phase in retirement. It’s quite different to suddenly be in the distribution phase, relying on only investment returns and the nest egg you’ve created and managing your daily finances without a net. Considering when to start Social Security benefits is vital. The longer you wait to start, the larger the benefit will be—but will you still be able to enjoy it in late retirement? Read more in our latest blog, Opportunity Costs in Retirement.
TIP 4 Revisiting Your Will
Some say that people only pay attention to the New Year’s resolutions for the first 10 days. What if you only had to pay attention to them for that long, because they were done by the end of that time. What if in 2023, you did something you had been putting off because most people put it off, but you got it done, and then you got to enjoy that sense of accomplishment for the rest of the year.
That’s right, we’re talking about creating or revisiting your will. It doesn’t take that long to do, but it’s onerous because of all the thoughts it dredges up. Nevertheless, having that will can make things significantly easier for your estate and your beneficiaries. Many wills don’t get adjusted either, or things can become increasingly complicated in scenarios with blended families. Make this the 2023 new year’s resolution being on the smart side of the curve, with an estate plan in place.
If you have significant assets that would require a more complex plan, consider reaching out to one of our trust officers. That may take more than 10 days to put everything in place, but the lasting legacy it could create may last a lifetime or more.