Year-End Planning for a More Purposeful 2023

December 16, 2022

Year-end is peak time for reviewing your financial progress – and opportunities. It can seem stressful, but I like to think of it as a more optimistic part of the year because it’s a chance to look forward. This year, my wife and I welcomed our first child into the world, and it’s given each of us a new outlook on life and what it means to plan and be purposeful with our personal wealth. When it comes to year-end planning or multi-year planning as we embark on 2023, the best part of my job is ensuring my clients have a well-rounded, sustainable financial plan that can weather volatility, make adjustments when needed and focus on long-term goals.

Proactive, ongoing planning should be practiced by your financial advisor each year with regular communication checkpoints built in so you feel assured you’re not missing any opportunities. Before you ring in a new year, review this checklist for a more purposeful 2023.

Tax-Saving Strategies in December

All pieces of the financial puzzle have potential tax implications. As your advisor, it’s my job to put the pieces together in a way that’s most beneficial to you. Tax planning is a key factor in your comprehensive financial plan, and you should never be paying more than what is required by law. Here are a few areas to check, review and complete before next year’s Tax Day.

Maximize tax-advantaged vehicles.

Tax-advantaged vehicles like a health savings account (HSA) or 529 college savings plans provide investors with a tax benefit such as a tax deferral or exemption. It’s wise at year-end to take advantage of your deductible contributions first and make sure you’re maximizing these contributions, if possible. Look to max out your 529 plan to receive state tax benefits and your HSA account if you have low healthcare costs.

Identify opportunities to harvest tax losses.

If your portfolio has realized significant gains this year, it might be possible to sell an investment with a loss, offsetting those gains and reducing your tax liability this year. Up to $3,000 can be applied annually with any additional amount carried over to subsequent years.1

Consider a Roth conversion.

Taxpayers can consider converting a Traditional IRA to a Roth IRA, hedging against the risk of higher tax rates in the future. This gives you flexibility when managing cash flow and future tax exposure because you’re trading off being taxed today on the converted amount in exchange for not being taxed on the amount, as it may grow in the future when you withdraw.

Planning in 2023

A portion of year-end planning is thinking about the future and asking: “What’s changing in 2023 for myself, my family or my business that’s going to affect my financial plan?” No matter if it’s planning for inflation or considering a risk assessment – a new year brings the opportunity for us to review your current financial state together and make any necessary adjustments.

Your financial plan is dynamic and always changing, but should stay focused on long-term goals and circumstances. Maybe you’re in a new tax bracket, recently divorced, decided to start a family or received an inheritance. If any of the areas below make you pause or prompt a discussion with your spouse or family members, let’s chat.

Asset Preservation – Do you feel you have an appropriate amount of life and liability insurance, given your financial goals? 

Retirement Planning – The IRS announced adjustments for 2023, which address a few key areas. What does that mean for your retirement plan? There are changes to capital gains tax rates, annual exclusions for gifts, estate tax exclusion and more.

Estate Planning – Do you have any estate planning needs, such as creating a will or trust, beneficiary designation, or reviewing your current assets to create an estate plan for your heirs?

Education Planning – Has your family dynamic changed in the last few years? Do you need to set up any college or education savings plans for your children or grandchildren?

Business Planning – Are you planning to sell your business in the next three to five years? If so, now is the time to discuss business valuation and transition planning.

One of my favorite aspects of financial planning is helping individuals and families make the right financial decisions as they grow. As you we’re on the brink of another year, I’m honored to help you wade through these decisions and make choices that are right for you – keeping your long-term goals in sight.

Blog by Andrew Barnes, Wealth Advisor & Shareholder


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