Financial Planning for 2022

By PrivateVista on December 13, 2021

At this time last year, I was writing an article for January which was focused on emerging from the Pandemic and a return to normalcy. This goes to show how quickly our Planning can shift from an offensive approach to defensive. As we dealt with high inflation, rising interest rates, a volatile market, and supply chain issues, we found ourselves adjusting our strategy on a daily basis.

Although the world is a different place than it was two years ago, planning for your financial future remains just as important. As we look to 2022 with a sense of beginning and growth, let us remember to create SMART goals and keep them front of mind, even when we’re consumed with a message of fear and uncertainty.

Specific – focus on a specific area of improvement
Measurable – quantify the goal to measure your progress
Achievable – be realistic and ensure you can attain such goal
Relevant – make sure you have a “why” you want to do this
Time-Based – over what period will you measure your results

Since this article is focused planning for your Financial Life in 2022, here are some new changes coming this year that may help in building your 2022 Financial Plan:

Social Security – if you’re collecting benefits, you’ll see a Cost of Living Adjustment (COLA) of 5.9% when you receive your deposit this month due to the high levels of inflation. If you’ve previously collected $2,500 per month, you should expect to receive an additional $147.50 per month in benefits.

Company Retirement Plan Contributions – if you contribute to a 401(k) or 403(b), your maximum contribution will increase to $20,500. For those over 50, you may contribute an additional $6,500 or $27,000 for the year. Make sure to adjust your deferral percentage to ensure you maximize your tax deferred savings.

Individual Retirement Plan Contributions – contribution limits to your IRA or Roth IRA will remain unchanged in 2022. Subject to income limits, you may contribute up to $6,000 to your IRA or Roth IRA. For those over 50, you may contribute an additional $1,000 or $7,000 for the year.

Health Savings Accounts – if you have access to a Health Savings Account (HSA), a family may now contribute up to $7,300/year to pre-tax contributions. For those over 55, you may contribute an additional $1,000 or $8,300 for the year. You may then withdraw these funds tax-free to pay for medical expenses, or let the account grow as an additional retirement benefit.

Taxes – tax rates will remain unchanged in 2022. The IRS did, however, increase the income brackets for inflation and increased the standard deduction to $12,950 for single filers ($25,900 for Married Couples filing a Joint return).

At Private Vista, we help our clients prioritize their Specific goals, Measure the progress each year through Achievable steps, understand why these are Relevant to you and your family, all within a calculated Timeline. If you find yourself needing help building your own Financial Plan, please give us a call.

Article By: Randy Porzel, CFP®, RICP®: Randy is a Partner and Lead Advisor at Private Vista LLC. He began his financial planning career as an intern and worked his way up through every job at the firm. Randy finds joy in taking clients through Private Vista’s planning process, using tools that answer questions and clear uncertainty so that clients can look forward to their idea of an enriched life. In his free time, Randy enjoys serving on the boards for the Chicago Lighthouse for the Blind and The Darien Lions Club, whose mission is to serve those in the community with visual impairments.

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