✅ Top 5 TO-DOs for 2023 planning 🗓

1️⃣ Make a note to INCREASE my maximum retirement plan deferrals.

The IRS announced that the maximum contribution to 401k plans increases in 2023 to $22,500 from $20,500, and if you’re 50 or older, you can also add an additional $7,500 in catch up contributions, which has increased from $6,500. Thus, if you’re over 50, that means you can contribute $30k as employee deferrals (aka, comes from your income).

And NOTE 📝 – your MAX employee contributions do NOT include your employer match. Any matches are additional savings.

Also, the annual limit on contributions to IRAs increases in 2023 to $6,500, which is up from $6,000. The catch-up contribution if you’re 50 or older will not change – and remains at $1,000.

2️⃣ Review my personal goals 🎯, resources, time horizon, and investment objectives.

My personal investment philosophy for Green Bee🐝:

1.     For goals within less than 3 years, keep your money liquid, meaning, easily accessible. It is easy to find savings accounts that are offering much higher rates than a few years ago – so it is worth it to shop around, and look for attractive rates for your savings.

2.     For goals within 3-5 years, it may make sense to include some stock exposure. We typically invest strategically in mostly ETFs (exchange traded funds) with low expense ratios. Your account will include a combination of stock and fixed income exposure.

3.     For goals longer than 5 years, I tend to encourage higher percentages of stock exposure. The longer your time horizon, the more flexibility you have to ride out any market downturns.

3️⃣ Get excited about certain sections in the Secure 2.0 Act passed in December 2022.

• Small business owners can now make ROTH SEP IRA contributions (post-tax contributions, that grow tax-free). Prior to this, the SEP IRA was only available in a pre-tax option. This provides us with more planning opportunities based on your current and future income and tax projections.
• More good news for small business employers with less than 50 employees, the retirement plan start up credit will now be allowed for 100% of plan start-up costs (starting in 2023) 👏.
• If you contribute to a 401k – you can now choose to have your employer matching contributions arrive as ROTH contributions, instead of only pre-tax. You will owe income tax on those contributions but they are not subject to a vesting schedule.
• Section 126 discusses unused 529 (educational) plan 👩🏾 🎓 assets. If the 529 plan has been maintained for at least 15 years, and the ROTH IRA is owned by the beneficiary of the 529 plan, any unused plans can be used for ROTH IRA contributions. Basically, this provides flexibility for unused 529 plans, and offers another purpose for the funds – allowing unused educational savings to be transition to retirement savings.
• If you’re born in 1960 or later, your RMDs (Required Minimum Distributions) from your retirement savings are not required until you’re 75. Why is this good? Many of us plan to work beyond 70 years old – this allows us to continue earning and supplementing our retirement savings. It also gives us a few more years to consider ROTH conversion strategies.
• All inherited retirement accounts are STILL required to be fully distributed within 10 years of the original account holder’s death (no change from Secure 1.0)
• Qualified Charitable Distributions (QCDs) can still be made starting at 70.5 years. For charitably inclined, high net worth clients, this strategy should be explored.
• Taxpayers can now create a SEP IRA plan for household employees such as nannies.
• There are MANY more aspects of the Secure Act 2.0 to learn about – you can read more here.

4️⃣ Review my long-term care (LTC) funding plan.

Section 334 of Secure Act 2.0 allows for penalty free “Qualified Long-term care distributions” up to the lesser of 10% of the vested retirement account balance, or $2,500 annually to pay for long-term care insurance 👵🏽.

I’m a big believer in thinking about your long-term care insurance plan earlier than many other advisors. Clients tend to be in peak earning years in their 40’s and 50’s.  Many have already experienced an aging family member who needs services whose costs add up quickly.  I’ve also seen way too many injuries, joint replacements, etc at younger ages, as many of my clients are very active and tend to rack up the sports injuries. These types of surgeries may preclude you from qualifying for many long-term care policies. However, if you’re older, it is always worth having the conversation about coverage. There are many types of policies out there, and if you don’t qualify for one type, there may be other options available for you.

5️⃣ Schedule my review so we can address my goals for 2023!

If you are an existing client, please schedule a “Client Review”. If you’re not yet a client but would like to chat, schedule a “Complimentary Consult” here.

👏 Other exciting news!

I’m a life-long learner 🍎, and as such, I’ve started my studies to become an IRS Enrolled Agent. This will further my tax knowledge so that I can even better assist my clients with their strategic tax planning in coordination with their CPA and attorneys. I especially love learning about small business ownership and tax efficient ways for small businesses to grow, as well as tax benefits of real estate ownership.

I’m also planning on launching a community for women investors – where I will be hosting events where we educate, share, and learn from each other. Stay tuned for more news about this upcoming offering!

📰 In closing, did you know that Green Bee 🐝 is often quoted in the Press?

I love to educate clients about financial topics, and I’m able to translate financial jargon into real-person language, while avoiding mansplaining that often blusters forward from men in my industry.

My first quote of 2023 was in Money’s – “5 investing tips after the stock market’s poor performance”

You can find my press on my website as well as social media accounts.  

Required Disclosures

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Past performance is not indicative of future results.

Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price. An increase in interest rates may cause the price of bond mutual funds and ETFs to decline.

An investment in Exchange Traded Funds (ETF), structured as a mutual fund or unit investment trust, involves the risk of losing money and should be considered as part of an overall program, not a complete investment program. An investment in ETFs involves additional risks such as not diversified, price volatility, competitive industry pressure, international political and economic developments, possible trading halts, and index tracking errors.

Mutual fund and stock investing involves risk, including possible loss of principal.