The Balancing Act

WELCOME to the latest edition of Fiscal Fitness.

2022 is finally behind us as we enter the New Year with hopes of a fresh start. The markets have been unkind to many with all three of the major averages suffering their worst year since 20081. Making it even more difficult was that both stocks and bonds sold off in unison, leaving investors with no place to hide. While the new year will bring its own set of challenges, having a well-balanced plan can help you stay on track and focus on the bigger picture.

Focus On What You Can Control

Dollar cost averaging (DCA) is a method of investing a fixed dollar amount of securities, at regularly scheduled intervals, over a period of time. Putting your investments on auto pilot is not only convenient, but it may also help take the emotion out of investing or trying to time the market.

Plan for the unexpected, again. Have you established a large enough emergency reserve? With interest rates at the highest levels we have seen in years, high-yielding savings accounts and Certificates of Deposit (CDs) are worth looking at.

The Good

Nearing retirement? It’s an opportunity to save more aggressively and make up for lost time. The proposed regulations also increased the catch- up contributions for those aged 60-63 effective in 2025.

LATER AGE FOR REQUIRED MINIMUM DISTRIBUTIONS (RMD). Effective in 2023, the beginning date for RMDs increases to age 73 from 72 (if you turned 72 in 2022, you are subject to the old rule), good news for those looking to postpone distributions. Secure 2.0 has also reduced the RMD penalty tax for failure to take an RMD. Did you even know there was a tax?

529 PLAN ROLLOVERS TO ROTH IRAS. Effective for 2024, you have the ability to roll up to $35,000 from a 529 qualified tuition program tax-free to a Roth IRA for the same beneficiary, provided the 529 accounts have been held for at least 15 years. Annually, the rollover amounts would be subject to Roth IRA contribution limits2. The rules are tricky and you need to work closely with your tax advisor.

ROTH CONTRIBUTIONS are now allowed for SIMPLE and SEP IRAs. Employer contributions and employee elective deferrals (if permitted) can now be designated as Roth. Good news for small business owners and self-employed individuals.

About THE AUTHOR

DEBRA FOURNIER, CERTIFIED FINANCIAL PLANNER™ and Certified Divorce Financial Analyst™, has been providing comprehensive wealth management services to families and independent women for over 25 years.

Recognized as an experienced and knowledgeable professional in the areas of financial transitions and divorce financial planning, her guidance is often sought where there are complicated financial issues, significant assets or an imbalance in financial knowledge between divorcing couples.

NEWS

The recent passing of the Secure Act 2.0 has ushered in many changes for retirement plans and IRAs with increased limits on contributions to 401(k)s and IRAs. Great news for those age 50 and older who can save a combined $30,000 a year in their 401(k), between the new limit of $22,500 and additional $7,500 “catch- up” contribution. For IRAs, the combined amount is $7,500.

Confusing? You bet. If you are thinking to yourself “will I have enough to retire comfortably”, then it’s time to meet with a qualified and experienced CERTIFIED FINANCIAL PLANNER® Professional who can help put all the pieces of the puzzle together.

Together we can make it happen…

Debra has been quoted in Kiplinger’s Personal Finance Magazine and AOL Daily Finance, appeared numerous times on Good Day New York and has been featured in the Asbury Park Press section Getting Ahead.

Time for a second opion? We invite you to call us at 732-800-8400 or email debra.fournier@lpl.com for a more personalized approach to your finances.

2006 Highway 71, Suite 1 Spring Lake, NJ 07762 732-800-8400 | 732-800-0622 fax seaviewwealth.com