Key things to think about in your new year financial planning
There’s no escaping the fact 2023 is going to be challenging, but focusing on financial planning for the new year could help.
Invest in self-care
Looking after our physical and mental health has never been more important, so put time and money aside at the beginning of the year to fund self-care. In particular, try to plan at least one long break as well as three shorter ones of, say, four days. You can use that time to recharge your engine.
Make the most of your HSA
A health savings account (HSA) lets you set aside money on a pre-tax basis to pay for any qualified medical expenses you incur. It’s also the last triple-tax-exempt investment vehicle available. Make sure you’re taking advantage of it.
Take advantage of higher limits in your withholdings
Increasing your withholding percentage by 9.76% will allow you to continue to max out your 401(k) savings opportunity in 2023. For example, if you earned $250,000 in 2022 and maxed out your contribution as a 49-year-old or younger, you would have a withholding percentage of 8.2% (saving $20,500 for the year). To take full advantage of the increased limit of $22,500, plan to increase that from 8.2% to 9% in 2023 (a 9.76% increase).
Review your parents’ plans
It’s a good idea to talk to your parents about their financial portfolio and how they want their affairs to be managed in the future. That way, there’s less likely to be any unpleasant surprises that impact your own plans further down the line.
Audit your beneficiaries
Now’s a good time to go through all your savings accounts, insurance and retirement plans to make sure your designated beneficiary – i.e., the person or people the money passes to in the event of your death – for each one is still who you want it to be.