Getting your finances in order ahead of 2023
ALBANY, Ga. (WALB) - With a year of financial uncertainty and inflation, many may be looking to the new year to bring more stability and lower costs. Before the clock counts us into the first minutes of 2023, see what a financial advisor has to say about ending the year as financially steady as possible and what good steps to take in the new year.
And Kent, the end of the year is coming very quickly. What are some things people need to think about their finances before the New Year?
“Thank you, Jim. Appreciate you having me, and hope you had a Merry Christmas and have a Happy New Year. We are two or 3 days away from the end of the year. There is still time to make some of those last-minute financial decisions. One of the things I would encourage people to do if they have investment accounts is, look at the gains and losses that you have had throughout the year. 2022 has been a very dismal year when it comes to the actual return in the markets. So there are probably some losses that you could lock in and use as a write-off against any gains that you may have accumulated through the year,” Kent Patrick, an advisor at Bush Wealth Management, said.
Of course, taxes are a big thought right now. So what can people do as they prepare for these tax bills coming up soon?
“Yes, the biggest thing you can do is make sure that your withholdings are set the way you want them. That way you don’t have any surprises going into the New Year. For those individuals who are age 72 and older, if you have an IRA don’t forget that you are required to satisfy that minimum distribution before December 31st. Otherwise, that penalty is 50%, which is pretty steep,” Patrick said.
And of course, thinking about the coming of 2023, do you have any advice for people thinking about, not only wrapping up this year but going into next year?
“Yes, going into next year, I would definitely encourage people to set some financial New Year’s resolutions as well. Some of these things may include establishing an emergency fund. Maybe increasing your savings now that interest rates have come up. Your money market accounts and your online high-yield savings accounts are fairly attractive now for those type of investors. And I would also encourage people to pay down high-interest debt. The average American carries around $6,000 of credit card debt. And the average credit card interest rate is around 20%. Try to eliminate that. And the other thing I would encourage investors to do is just get started. Fund a retirement account, maybe that’s through your employer, or if you want to set up an IRA or a Roth IRA outside of your employer. Those would be great steps going into 2023,” Patrick said.
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