‘Tis the Season for Year-End Planning

By Nicole Young on December 11, 2023

Year-end planning tips to take action on.

If you’re like me, the holidays become less about you, and more about the loved ones in your life. Through all the stress, it’s important to take a few minutes to focus on you and remember these year-end planning items to secure a fruitful retirement.

Maximize Retirement Savings

If your employer offers a 401(k) or 403(b), you may contribute up to $22,500 ($30,000 for age 50 or older). Now is a good time to ensure you’ve hit the limit. If not, you may want to consider increasing your contribution for your last paycheck.

If you’re self-employed, or your employer does not offer a retirement plan, you may still contribute $6,500 to an IRA or Roth IRA ($7,500 for age 50 or older), subject to income limitations.

Withdraw your Required Minimum Distribution (RMD)

If you’re age 72 or older, or are the beneficiary of an Inherited IRA, the IRS will require you to withdraw a minimum amount from your IRA / Inherited IRA. This needs to be completed by December 31^st to avoid a 50% excise tax.

Fund your Education Plan

The State of Illinois allows you to deduct up to $20,000 per year on your State Tax return as long as your contributions are made to an Illinois State sponsored Plan.

Tax Loss Harvesting

If you are holding any securities at a loss, you may want to consider selling them as a way to offset other capital gains or offset your income by $3,000. Losses not used in the current year may be carried forward to future years.

Prepare for the changes in 2024

Social Security benefits will increase by 3.2%
Standard Deduction – $14,600
401(k) / 403(b) Contribution Limit – $23,000 ($30,500 for those over 50)
Simple IRA Contribution Limit – $16,000 ($19,500 for those over 50)
IRA Contribution Limit – $7,000 ($8,000 for those over 50)
Annual Gift Tax Exclusion – $18,000

As 2023 comes to a close, all of us at Private Vista would like to wish you a Healthy and Happy Holiday and New Year. We look forward to providing more “financial fitness” in 2024.

Article by: Randy Porzel, Partner, CFP®, RICP®

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