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It’s a new year, which means fresh opportunities to grow your money.
Here are four prompts from our planners to help you set yourself up for success, steady growth, and improvements in 2023.
Review your goals from 2022 and set new ones.
As you gather tax documents and review financial decisions from 2022, what stands out? What strategies — or lack thereof — worked? Which ones fell flat and need a serious reworking? The goals and plans you make now could improve your entire 2023 fiscal year, and beyond. So even if you feel crunched for time, imagine that your future self is being paid for the hours you spend now. Or, if you prefer, ask one of our planners for help.
Some people may decide they want to save more — to build a cash runway, meet a goal, or set aside resources for the predictably "unpredictable" costs that will pop up throughout the year. Others might discover they’re satisfied with their savings account and that it’s time to allocate more of their surplus income into investments.
Assess spending against your values
Values are just a fancy way of asking yourself “What matters most to me?” And then asking, “Does my spending reflect that?” Maybe you spend a lot on the mortgage for a second home but are using it less than expected. In that case, perhaps you’d rather spend that cash to remodel your primary residence. Or, perhaps you have been saving to buy third car that all your friends are getting, but based on your values, you’d rather take a month off to travel this year. Whatever your unique values are, set a goal that reflects them so that you can be intentional with your wealth.
Take a look at your W-4 withholding.
If you’re earning income, you’ll likely need to pay taxes on it. And if you’re an employee, then your employer withholds those taxes based on the information you provide on your W-4 form. If those instructions lead them to withhold too little, you could end up with additional taxes to pay out-of-pocket at tax time. But if they withhold more than needed, you’ve given the government an interest-free loan when you could have invested the money instead. It’s a good idea to frequently check in on whether your withholding information is still accurate, especially if any of the following occur:
-You get a second job
-Your spouse gets a job or changes jobs
-You are unemployed for part of the year
- You get married or divorced
- You have or adopt a child
Adjust your 401(k) or IRA Contributions
Thanks to the latest increase made by the IRS, it’s possible to contribute more to a 401(k) in 2023 than it was last year. The new limits top out at $22,500 (up from $20,500 last year). And for those over 50-years-old, who qualify for a “catch-up” contribution, the new annual limit is $30,000. The annual limits on IRA contributions also increased to $6,500, up from $6,000 the year before. More specific information can be found on the IRS website, or by talking to one of our planners.
Range is here to help
Not sure you have the best financial plan for 2023? Our Range financial planners can empower you to feel more confident in your financial decisions. Range can even take on tasks you don’t want to do, like planning and filing taxes.
With Range, you can connect all your finances into a single dashboard to track, monitor, and plan the best version of your financial life. And with our CFP® professionals on staff to answer your questions, you can say goodbye to uncertainty and doubt and hello to peace of mind.
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