From past to future: It’s never too early to consider your 2023 financial goals

It’s that time of year again. The leaves are changing to autumnal hues, the weather is finally cooling and families are heading to pumpkin patches to choose the perfect specimen for carving. The year 2022 is rapidly coming to a close.

Have you reflected on the year yet? If not, don’t put it off. With the holidays quickly approaching, the time to do so will be harder to come by.

Join me in preparing your 2022 year-end checklist. To help you get started, here are a few tasks that are on my checklist and could find their way onto yours.

Your personal 2022 review

If your experience is like mine, 2022 has flown by. It could be a good idea to start planning for 2023 by reflecting on what has occurred in 2022. Get that pen and paper ready.

Start by looking at your financial facts. What will your total income be? Is there the possibility of a year-end bonus? What taxes have you already paid (withholdings and estimated payments)? It’s important to have all the facts straight prior to analyzing what strategies could benefit you in 2023.

Did you stick to your spending plan in 2022? Examine areas of your plan that went well and look at areas that need improvement

Schedule year-end review

Now is the time to get on your financial adviser’s or other professional’s calendar. Here are a few planning items that could pertain to your situation:

Questions to ask your financial adviser:

Retirement contributions: Am I taking advantage of my workplace retirement plan or individual retirement account (IRA) and/or Roth IRA?

Tax-loss harvesting: With the market down since the start of the year, are there opportunities to capture losses to offset current or future capital gains?

Tax withholdings/payments: Do I need to make any changes to my tax withholdings or tax payments prior to year end?

Roth conversions: Would it make sense for me to convert traditional IRA (pre-tax) assets to a Roth IRA?

Required minimum distributions: Do I have any RMDs that need to be satisfied?

Charitable/education donations

Are you charitably inclined? If so, it could make sense to use a donor-advised fund or qualified charitable distributions to donate to a charity rather than writing a check to the organization directly.

These two strategies depend on your personal situation, so consult with your financial adviser or tax professional to find out if either is beneficial for you. The 2022 tax year deadline for donations is Dec. 31.

529 Education Savings Plan Contributions: Is saving for college — either for yourself or a loved one — one of your goals? If so, a 529 education savings plan may be an option for you. Many states offer state tax deductions for contributions made to 529 plans.

Consult with your financial adviser or tax professional to see if this makes sense for you. The 2022 tax year deadline for contributions is Dec. 31.

Review flexible spending account

Do you have a flexible spending account for healthcare or dependent care? If so, it’s important to understand the rules for using these plans.

FSAs are “use it or lose it” plans. That means you must use your account funds by Dec. 31 of each year. If you don’t, there’s a good chance those funds will be returned to your employer. Often, employers may elect to give employees a 2.5-month grace period to spend the leftover money or allow $500 to be carried over to the next year. The rules vary based on the plan, so check with your human resources team.

Estate plan review: When was the last time you reviewed your estate plan? This includes your will, trust, powers of attorney, beneficiaries and titling. If you have experienced a life-changing event — such as a marriage, divorce, the birth of a child or death of a spouse — it’s time to update your estate plan.

Looking ahead to 2023

What do you want to accomplish next year, personally or career-wise? How do your goals fit into your budget? Make updates as needed but stick to your plan.

Then, put your goals down on paper and be sure to make them “SMART”: Specific, Measurable, Attainable, Relevant and Time-based.

Set yourself up for success in 2023 by reviewing your 2022 year-end checklist and closing out the year strong.

Nolan Keim is a Certified Financial Planner professional and an active member of Financial Planning Association of Greater Kansas City. He serves as an Associate Wealth Advisor for Mariner Wealth Advisors in Overland Park, Kansas.