TOP 10 WEALTH 
PLANNING STRATEGIES 

10. Make the most of your retirement contributions

In 2022, individuals can contribute up to $6,000 to an individual retirement account (IRA). Those who reach age 50 before the end of the year can contribute an additional $1,000 in catch-up contributions. This year’s 401(k), 403(b) and 457 plan contribution limit is $20,500¹, with a catch-up option of up to an additional $6,500 for individuals age 50 and older.² It’s important to remember that the earlier in the year a contribution is made, the longer that contribution has to generate tax- deferred earnings. In addition, contributing to your IRA earlier in the year may provide an opportunity to make an extra contribution during the life of your IRA. For example, if you contribute early in the year and each year going forward (rather than waiting until the end of the year), you may have a chance to make one extra contribution prior to reaching age 72.

9. Consider whether a Roth IRA conversion makes sense

With a traditional IRA, contributions are generally tax deductible, and distributions are taxed at ordinary income tax rates. In contrast, contributions to a Roth IRA are not tax deductible, but earnings can be withdrawn income tax free if you are at least age 59½ and have had the Roth for at least five years. In addition, you are not required to take a minimum required distribution from a Roth IRA at age 72 as you are required to with a traditional IRA.

Converting a traditional IRA into a Roth doesn’t always make sense, but you may consider it if:

• You have a long time until retirement
• You anticipate being in the same or a higher tax bracket when you begin distributions
• You can pay the tax from sources other than the IRA

8. Use appreciated securities for charitable giving

It is not unusual to look at contributions to charitable organizations as a tax strategy. From a financial planning standpoint, charitable planning offers a great opportunity to reduce one’s tax liability for the year.

7. Review your insurance policies

If it’s been a few years since you’ve reviewed your insurance policies, meet with your wealth advisor and insurance professional to see if those policies still meet your needs for income replacement and asset protection. Whether your policies are related to disability, long-term care or life insurance, it’s important to review these policies following any major life event. Through the review process, your advisor can confirm that your ownership and beneficiary designations are consistent with the objectives of your financial plan. As tax laws continuously change, maintaining proper ownership of your life insurance is critical to ensuring that potential proceeds from life insurance death benefits are impacting your beneficiaries as intended. Because the interest rate environment can change, maintaining proper oversight of cash values within policies is critical to ensuring those policies remain properly funded. For term life insurance policies, your advisor can assist you with monitoring renewal periods and work with our in-house insurance team to research alternative coverage options. Whether your goal is to replace income or to transfer wealth to the next generation, an insurance review can provide peace of mind.

6. Review your estate plan

If you have experienced any significant life changes in the last 12 months, such as a marriage or the birth of a child, it’s important to consider the impact of those changes on your estate plan. Updating wills and durable powers of attorney is a critical first step for newly married couples and new parents. Additionally, if one of your children recently married, it can be beneficial to reexamine your beneficiary designations to confirm that assets are being directed in the manner intended. You may also want to review your estate distribution plan along with any creditor protection language, in case your children receive an inheritance.

4. Consider ways to minimize taxes by spreading out income

If your income varies from year to year, or if you expect to be in a different tax bracket in the future, consider using multi-year projections to take advantage of long-term planning opportunities to minimize income taxes. Examples of such tax planning strategies include accelerating the timing of income or recognition of capital gains so that lower tax brackets can be filled or, conversely, postponing the receipt of income or capital gains and accelerating receipt of losses to reduce income in higher tax years.

3. Enroll for Medicare, if applicable

Medicare plans can also change from year to year, in regard to what they cost and cover. So, it’s a good idea to review your current coverage, even if your own needs have not changed. It’s also important to note that, if you are within three months of turning 65, the window for your initial Medicare enrollment period has opened and will remain open for seven months. Also, each state has a State Health Insurance Program (SHIP) offering free one-on- one counseling for Medicare recipients and their families. Individuals can visit www.medicare.gov for customized information related to Medicare.