Contributed by: Kelsey Arvai, MBA
We hope your 2022 is off to a great start! As we all know, the New Year is an opportune time to reset and reevaluate your goals. With this in mind, we have come up with some simple yet effective strategies to position yourself for a prosperous year ahead.
Automate Savings and Debt Reduction
Establishing and maintaining a positive cash flow is a top-tier priority for your financial health. Automation is key to being efficient and effective while working toward your financial goals. Prioritizing your savings contribution through automation helps hedge against the temptation to spend the funds elsewhere. Additionally, utilizing automatic payments for your credit card could help your credit score if the time the payment happens is before your due date. After establishing an emergency fund through your automated savings, you might consider directing excess cash to your retirement and health savings plans.
Max Out Your 401(k) and Health Savings Account (HSA)
The beginning of the year is a great time to review your 401(k) and HSA contributions. In doing so, you can ensure that you are maximizing your benefits and taking advantage of increased deferral limits for 2022. 401(k), 403(b), and most 457 plan contribution limits have been bumped up to $20,500 for elective employee deferral.
HSA contribution limits have also been increased to a maximum of $3,650 for individuals and $7,300 for family coverage. It is estimated that couples retiring today will face $200,000-$300,000 of out-of-pocket medical expenses over the course of their retirement years. HSA balances can build and grow over time, and these accounts can be used to offset healthcare costs in retirement.
Plan for Charitable Giving
The beginning of the year is also a great time to determine your charitable goals and budget for the year ahead. We have written extensively on how to best pick a charity, so if you are unsure of which causes or organizations you would like to support, these blogs may be helpful!
How to Pick a Charity…During a Pandemic Part 1: Important Documents
How to Pick a Charity…During a Pandemic Part 2: Commitment to the Mission
How to Pick a Charity…During a Pandemic Part 3: Resources
Invest in Your Emotional and Physical Well-Being
As you take stock of your financial health this year, carving out time for your physical health is equally paramount. There is a connection between health and wealth, and each should be reviewed by a professional, at least annually.
Reach Out to Your Financial Advisor
Working with your advisor on an ongoing basis can provide you support to keep you on track while you are determining and working towards financial goals. If you ever have any questions, please reach out to us. We are always happy to help!
Kelsey Arvai, MBA is an Associate Financial Planner at Center for Financial Planning, Inc.® She facilitates back office functions for clients.
This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Kelsey Arvai, MBA and not necessarily those of Raymond James.