Financial Advice: Year-end planning – Colorado Community Media


Patricia Kummer
Patricia Kummer

This is goodbye to 2023. I am not sure yet how this year will go down in history, but this was definitely a year in which you could not predict anything, regardless of the topic. Weather, politics, interest rates, the stock market, the economy and housing were difficult to anticipate or plan around. Add in global unrest and a stubborn employment market, and you have a mixed pot. This uncertainty further adds confusion and volatility, causing many of us to want to hunker down and do nothing.

This is where I usually advise clients to only worry about things they have control over. So, what can you do to pull out a decent year at this late date? There are a few things you can do to save taxes for this year and plan better for next year.

First, always make sure you are maxing out contributions to all your qualified retirement plans. If you are too late for 2023, then start next year off by contributing the 2024 annual maximum of $23,000, or $30,500 if you are over age 50 for 401(k) plans If you are eligible to fund a tax-deductible or a Roth IRA this year, then funding it as early as possible could be beneficial.

Things change quickly. Those of you following the Treasury market and interest rates may have missed the recent peak in the blink of an eye. So too could other parts of the economy flip on a dime, so it is best to be prepared. Map out now what your one-, two- and five-year plan looks like so you can be ready to act on a moment’s notice. Keep your long-term strategy in place and resist making short-term changes to a goal that is out five to 10 years or longer.

You do have control over tax-loss harvesting in the next week or two if that can help offset gains or reduce some of your taxes. This is why planning is so important — you can identify what is no longer suitable for your portfolio and offset losses and gains to clean up your holdings and be ready for the new year.

You can also give money away before the end of the year if that is part of your plan. You can fund your charities or your donor-advised fund with appreciated assets to avoid paying taxes before your donation. For anyone wishing to reduce their taxable estate and gift to family members, the limit for 2023 is $17,000 per donor per recipient. So, a married couple can gift $34,000 to each recipient. Next year that amount increases to $18,000 each.

Taxpayers over the age of 70 1/2 can send all or part of their required minimum distribution (RMD) to a charity and avoid paying taxes on that distribution up to $100,000.

While you are busy giving away money, funding retirement or taking investment losses, the time will fly by, and the next opportunity may be close behind. Plan well for 2024 by making sure you are contributing, withholding, and planning to benefit you. Compounding really adds up year after year if you are organized and ready to participate.

Patricia Kummer has been a Certified Financial Planner professional and a fiduciary for over 37 years and is a Senior Wealth Advisor for Mariner Wealth Advisors.



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