Malcolm Forbes, the second-generation owner of Forbes Magazine, once said “As you get older, don’t slow down. Speed up. There’s less time left!” I think of when I used to run and I would feel an obligation to run faster as I neared the finish line. I’m not sure if it was the energy of the crowd, or the desire to do my best in front of my family, or even the desire to set my best personal record. Probably all three. As we wind up the last few months of 2022, let us think of ways we can finish strong so that next year can be better. I thought I would share a few tips that may help.
Shore up Liquidity Needs: With the Fed meeting again in early November, and recent CPI figures showing little decline in prices, most economists believe we will see another strong rate hike after the 2nd. This could result in more of the same. Make sure you have enough cash to weather what is coming. Recessions can last an average of 6-18 months, and during that time, your energy and food costs can climb even higher. Having some “safe money” set aside can help you sleep better knowing your expenses are covered. Factor in taxes and holiday spending. Once you have enough set aside you’ll feel better letting the rest do the work.
Gifting: First, consider giving if you can. Many excellent organizations are in need more than ever. Due to funding cuts, higher standard deduction, and higher prices, they are under financial strain from all sides. Giving to a trusted nonprofit is always a good idea, especially now. To avoid giving already-taxed-cash consider donating stock. Ask your charity if they have a brokerage account that you can transfer stock to. Also, consider moving your IRA’s RMD directly to the charity if you don’t need it. This can usually be done with a simple form, but deadlines are earlier for some companies, so don’t wait until last minute.
Tax Strategies: Two of my favorite bear market strategies are tax-loss harvesting and Roth conversions. When markets are low, you get more benefit. If you think that taxes will be higher for you in the future, and haven’t put enough into Roth IRA’s, take advantage of the bear market to “duck under” the fence. Doing so can lessen the taxability of the conversion and position you for a better after-tax situation in the future. Talk to your CPA and Financial Advisor before doing these, as there are rules.
Review your year: Looking over your bank statements, shredding that pile of old documents, and cleaning out your old files can do wonders for your soul. Cancel unwanted subscriptions. Reduce your expenses where you can (Think insurance policies, utilities, etc). Make a list of things that bubble up as you go, and write it in your next calendar or planning app. You will feel better knowing you can enjoy the season without all that stress hanging over your head.
Open enrollments: Take a few minutes to review your health plan. If you haven’t looked at it in a while, make sure you do this during open enrollment. Many laws and prices have changed, and you may be surprised what your options are. ACA opens in November 1, and Medicare opened October 15 and will close Dec 7 for 2023. Hop on Medicare.gov or your plan sponsor’s site and ask your health care professionals before you make any changes.
Finally, I’d like to encourage everyone to choose a positive mindset. Today we have an abundance of negativity that is instantly available on all channels. Focusing our attention on what we can control is healthy for us because it allows us to feel more secure, which benefits our families because of the peace we demonstrate to them. Our young people are watching, thinking and choosing. May we always try to be a worthy example to them in their formative years.
Always with Candor,
Ivan
*The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
*The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.