Take Advantage of New Tax Adjustments in Planning for 2023!

Take Advantage of New Tax Adjustments in Planning for 2023!

 

 

Tax adjustments happen every year, but this provides an excellent opportunity to review and plan for a better personal tax situation for 2023. Let’s take a look at the changes! Legislation has given even more planning opportunities for employees and retirees than usual. The planning opportunities for 2023 fall into three broad categories: tips for current workers, tips for retirees, and ongoing strategies.

 

Updates for Current Workers

Here are some items that people who are currently working will want to review for the new year:

  • New Tax Brackets and Standard Deduction: Tax brackets and the standard deduction are all indexed to inflation. The large numbers in 2022 created bigger changes than usual in 2023, making it worth reviewing tax withholding.
  • Higher 401k (and 403b and 457) Employer Plan Contribution Limits: 2023 will see an increase from $20,500 ($27,000 if age 50+) to $22,500 ($30,000 if age 50+) that can be added to your employer retirement plan.
  • Higher IRA and Roth IRA Contribution Limits and Phase Outs: The contribution limits to IRA and Roth IRA accounts will also increase, potentially in addition to employer plan contributions. There will also be an increase to the income limits regarding when your ability to take advantage of these plans starts to phase out.
  • Health Savings Account Increases: For employees with a health savings account (HSA), the amount that can be contributed to the plan will also increase in 2023.
  • NEW Employer Matching 401k Contributions as Roth: Starting in 2023, employers may start allowing employees to take matching contributions as Roth contributions rather than pre-tax contributions. This is brand new and opens up significant planning opportunities.

 

Updates for Retirees

Retired individuals will also see several changes in 2023 to plan around:

  • NEW RMD Age Increased from 72 to 73: The biggest change for retirees in 2023 is the delay of the first required minimum distribution (RMD) from age 72 to 73. Individuals turning 72 in 2023 now have an additional year of flexibility for things like Roth conversions or other strategies to minimize taxes over their lifetimes.
  • Social Security Benefits and Medicare Premiums: Social Security will get an 8.7% increase in 2023. The base monthly premium for Medicare will decrease from $170 to $165.For higher earning retirees, the thresholds for Medicare’s IRMAA surcharge will be increasing.

 

Ongoing Planning Opportunities

There are several ongoing planning opportunities as individuals start looking ahead at 2023:

  • Qualified Charitable Contributions (QCD): For individuals who are at least 70½ years old, qualified charitable distributions (QCDs) from an IRA may be one of the most tax-effective ways to give to charity.
  • Roth Conversions and “Backdoor” Roth IRA Contributions: Depending on your current income and current retirement accounts, Roth conversions or “backdoor” Roth IRA contributions may allow more savings into accounts that will grow tax-free in the future.
  • Tax Loss Harvesting: With the decline in both stock and bond markets in 2022, there may be more opportunities than usual to sell investments at a loss and offset taxable income realized in other areas.

 

The Bottom Line

The new tax changes have created significant planning opportunities to review. It’s worth exploring how your personal tax situation may benefit from making adjustments in 2023. At Merriman, we live and breathe this stuff so you don’t have to. We are happy to answer your questions and partner with you to develop and/or refine the best approach for your taxes for 2023. Schedule some time with us today!

 

 

 

Disclosure: All opinions expressed in this article are for general informational purposes and constitute the judgment of the author(s) as of the date of the report. These opinions are subject to change without notice and are not intended to provide specific advice or recommendations for any individual or on any specific security. The material has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source.  Merriman does not provide tax, legal or accounting advice, and nothing contained in these materials should be taken as such. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. As always please remember investing involves risk and possible loss of principal capital and past performance does not guarantee future returns; please seek advice from a licensed professional.

 

 

 

The Appeal of Becoming a Snowbird

The Appeal of Becoming a Snowbird

 

Whether you live near us in the Pacific Northwest and endure month after month of gray skies and cold rain or elsewhere in the US and grow weary of snow and slush during winter, you may want to explore the idea of becoming a snowbird! Snowbirds are people who migrate to warmer areas during colder seasons in their hometowns, ideally for the entire winter season.

Once a term associated with retired, older adults who really feel the sting of a brisk winter, these days the life of a snowbird can be just as appealing to younger people, especially those with flexible career options.

 

How to Become a Snowbird This Winter

Does the term snowbird sound appealing? Have you ever considered heading south to warmer landscapes for the winter? Here are some considerations and steps to keep in mind before taking the plunge!

 

1.   Choose a Place That Suits Your Lifestyle

Do you like to golf in your downtime? Boca Raton might just be the ticket, then. Or maybe you prefer lounging on the beach—somewhere like Hawaii might suit you better.

Before deciding to migrate for the winter, you need to know what will make your winter comfortable and enjoyable. Arizona might not be for you if you don’t like dry heat. Take into account your social preferences, the activities you enjoy, and what kind of climate and humidity you prefer. Also consider if you prefer a bustling environment or someplace quieter and more low key. A care-free condo may be just the ticket, or you may prefer a secluded beach bungalow. There are plenty of options, so have fun doing your research!

 

2.   Don’t Overcommit

Putting all those snowbird eggs in one basket won’t get you very far. It’s best to have a trial period before you commit to the snowbird lifestyle or a migration spot.

Look for properties you can rent for two or three months to get a feel for the place before purchasing a property. You might end up migrating to several different areas before you make your final decision. The beauty is, the decision’s all yours!

 

3.   Establish Remote Management for Your Bills

You need to be able to manage your energy bills at home while you’re away—you can’t simply leave the mail unattended. So, before you embark on the snowbird journey, ensure you can receive your energy bills in email format. It would help if you did this for any other accounts you might owe during the winter.

 

4.   Protect Your Home

One of the drawbacks of the snowbird lifestyle is anxiety. The home you leave behind will be completely unattended and vulnerable to damage. To put your mind at ease, consider investing in a home surveillance system, comprehensive insurance coverage, and a trusted attorney. Or perhaps to arrange for a friend, neighbor, or family member to check in on your property periodically. In some areas, like California, lawyers are not allowed to represent you in small claims court, so it is best to research the local laws to protect your home.

 

5.   Pet Passports

Old Rover shouldn’t stop you from enjoying winters in the sun. Many pet owners find it too difficult to leave their pets behind for long trips, so you should get your pet passports sorted and find pet-friendly airlines to ensure you and your furry friend have a pleasant flight. If you drive to your sunny destination, don’t forget to bring along some familiar-scented items from home to reduce pet anxiety along the way.

 

6.   Expand Your Network

Though FaceTime can keep you connected to your loved ones during the winter, you’ll need more than that to keep you occupied. Check out social opportunities where you’re going; perhaps there is a community center with classes and activities, a local gym, fitness trails, or an art center. There are many apps like Meetup that can help you to connect with new people as well.

 

7.   Be Careful About Offering Open Invitations

Your loved ones may be envious of your winter staycation, and extending an open invitation is tempting. If you have too many visitors, this can draw from your relaxation time. You may find yourself spending too much time cooking, cleaning, and accommodating guests. To keep things relaxing, keep the visitors at a minimum. Alternatively, consider arranging for a few specific times when family or friends can gather collectively during the holidays or special occasions rather than opening your sunny spot to visitors every weekend.

 

8.   Contact a Financial Advisor to Make a Plan

At Merriman, we get tremendous joy out of helping you determine a realistic pathway to your dreams. So if you’re thinking of heading south for the winter to a second home or rental property where you can soak up the sun and relax (or work your job remotely) during the winter months, let’s chat about making it a reality for your family. We believe in enabling you to LIVE FULLY, and it’s never too soon to begin!

 

 

Disclosure: All opinions expressed in this article are for general informational purposes and constitute the judgment of the author(s) as of the date of the report. These opinions are subject to change without notice and are not intended to provide specific advice or recommendations for any individual or on any specific security. The material has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source.  Merriman does not provide tax, legal or accounting advice, and nothing contained in these materials should be taken as such.

Merriman clients sure do know how to live fully!

Merriman clients sure do know how to live fully!

We are so delighted to share some amazing visual stories of our client families LIVING FULLY! We asked you to share and you answered – with wonderful images of you living your dreams.
Stay inspired and thank you for sharing!

Disclosure: All opinions expressed in this article are for general informational purposes and constitute the judgment of the author(s) as of the date of the report. These opinions are subject to change without notice and are not intended to provide specific advice or recommendations for any individual or on any specific security. The material has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source.  Merriman does not provide tax, legal or accounting advice, and nothing contained in these materials should be taken as such.

Financial Football – Who’s on Your Team?

Financial Football – Who’s on Your Team?

 

Having been born and raised in Seattle, the start of fall is always a bittersweet feeling for me. I get sad that our short but beautiful PNW summer is ending, but I love that football season is beginning. I have seen many terrific and many not-so-great Seahawks teams over the years, but I always continue to show up as a fan. After having watched the start of our season thus far, one word comes to mind: uncertainty. Over the past few years, we’ve lost cornerstone players to other teams and to retirement. This truly reached a new level when we traded away our star quarterback this past summer. Those players had brought us over a decade of stability and success. All we knew was winning, and we easily left behind the memories of the 2008 and 2009 seasons where we had 9 wins and 23 losses.

 

I can’t help but notice the parallels between the Seahawks and the financial markets in 2022. This year has been full of uncertainty and volatility for investors. After more than a decade of mostly positive returns, we easily forget the pain of going through the short but sharp decline of 2020, the financial crisis of 2008, and the many bear markets before that. It’s human nature to do so. So, as we are currently in the midst of a difficult season, how do we put together the right team to win you a super bowl trophy (or at least help you achieve your goals)?

 

Your financial advisor will be your quarterback. You and your advisor must create the proper game plan together for what you are looking to achieve. They will be responsible for knowing exactly what play every teammate is supposed to carry out, and you need to keep in constant communication as the game progresses in order to make the necessary adjustments.

 

Your research and investment team will be your offensive line. They are critical to protecting your assets and marching your team down the field. As your research team watches the markets, like a great coach, they need to understand when to bring an additional player to the line for extra strength—especially when churning through tough, muddy times. They also need to understand when to send an extra player such as a tight end out on a passing route for additional firepower for your offense.

 

Many other players are vital to the functioning of your team. These positions are filled by your client service members, your trading department, internal operations, and outside experts like accountants and attorneys. If just one of these pieces is lagging, then your roster will be exploitable.

 

It is important to call out that not every drive down the field is going to result in a touchdown, much like financial markets won’t generate positive returns every year. But if you can put together an excellent roster, minimize mistakes, and follow a well-crafted dynamic game plan, then you put yourself in a position for success.

 

Are you ready to have a team that supports you? I really enjoy watching football, but I LOVE helping clients make it to their financial goal line. Call me this season, and let’s strategize on some plays!

 

 

 

 

Disclosure: All opinions expressed in this article are for general informational purposes and constitute the judgment of the author(s) as of the date of the report. These opinions are subject to change without notice and are not intended to provide specific advice or recommendations for any individual or on any specific security. The material has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source.  Merriman does not provide tax, legal or accounting advice, and nothing contained in these materials should be taken as such.

The Scary Thing About Getting Married…

The Scary Thing About Getting Married…

 

In the spirit of Halloween, I want to share something I did earlier this year that scared the candy corn out of me, something that chilled my bones and chattered my teeth, something that made my stomach flip like stepping off a cliff ledge…

…I got married.

 

Jokes aside, after the streamers come down and the wedding party goes home, you and your partner are officially married. I distinctly remember thinking to myself, “Ok, now what?” It turns out I wasn’t alone in asking this question. A number of us at Merriman got married in 2022. During one of our regular meetings, we talked about the adjustment period that occurs as couples move from dating to marriage. And while I recommend couples discuss finances prior to getting married, it doesn’t always sink in or hit home until you and your spouse are trying to plan a clearer picture for your future as a married couple.

 

Life is short and moves at a brisk pace. The average age for couples to get married in the US has jumped up from early to mid-20s to late 20s and early 30s. Many of the young couples I meet come to me in a panic because they feel they are behind on retirement savings, late in buying a house, or overdue in thinking about their children’s education expenses. Sitting across the table, they unfurl a scroll’s worth of goals they want to tackle simultaneously. Here’s what I tell them:

 

  • You are not “behind.” There is still plenty of time to achieve your financial goals. I’m also guilty of entertaining the fallacy that one night I’ll go to sleep at 35 years old and wake up at 65. Your income will increase. You will experience promotions and fits and starts in your career. Don’t fall into the trap of thinking your current financial situation will last from now until retirement.

 

  • It’s okay to divide and conquer. My partner and I would like to buy a house in the next few years. One of the biggest obstacles we face — aside from astronomical housing prices in Western Washington — is that my MBA program created substantial student loan debt. Compared to my partner, my ability to save for a house is hampered by monthly student loan payments. After we got married, we had a conversation about the nature of our finances. It’s no longer “my money” and “his money” but “our money” and how we plan to allocate where it goes. When we had the chat about how to buy a house, we decided each spouse had a job that would bring us closer to our goal. His job became focused on putting cash away for a down payment. My job became focused on paying down as much student debt as I can. These conversations are critical because they reduce the risk of emotional tensions getting in the way of clearly seeing the end goal. There is no longer the pressure of feeling as if one spouse is doing more than the other to get us closer to buying a house.

 

  • Set a target date. Setting a mutually agreed upon date for meeting your financial goals is important because it provides a light at the end of the tunnel. Say that you have a goal for a home down payment that’s three years in the future. If the goal requires a lifestyle adjustment where you eat out less or skip a vacation, you at least know it’s temporary. There’s an end date in sight. If you’re diligent, the lifestyle adjustments will stick even after you meet your goal, leaving more cash in your wallet.

 

  • Track your progress. When I worked for Disney, I was responsible for the Shanghai Disney Resort’s onboarding orientation program, an operational beast that moved thousands of employees through the onboarding process. I had a manager who constantly reminded me, “What isn’t measured isn’t managed.” Put another way, if you’re not tracking your progress, then you have no way of knowing whether you are on track to meet your goals. I love using an app called You Need a Budget that shows our progress. Furthermore, you lose any bragging rights to your successes if you don’t know what successes you have achieved. Imagine a friend asking how saving for a house is going. Excitedly, you tell them, “Great! We saved up some amount of cash and will start maybe sometime, I don’t know, looking. We’ll see.” Way to go…?

 

  • Life will get in the way. You both are a unit now. When life hits one spouse, it hits you both. Dishwashers break. People are laid off. Babies are born. When this happens, lean into it. If your progress becomes derailed, talk about solving the issue — whether it’s allocating money to the extenuating circumstance or adjusting your goal’s timeline — and recommit to the new game plan. It’s extremely easy to become demoralized or despondent, but if you go into this knowing life will get in the way, it allows you to focus your mind and energy on getting back on track.

 

At the risk of sounding like a marriage counselor, the advice provided here is to help the shift from thinking as two separate individuals to thinking as two halves of a whole unit. The reality of getting married is that, while you may not feel any different, your commitments to each other ultimately demand a higher level of communication to identify how — together — you will meet your goals. You undoubtedly will have disagreements and competing priorities, but your financial plan necessitates coming to an agreement on how and where to focus your financial resources. Start having that conversation right now.

 

The advisors at Merriman can help you identify, plan, and keep you on track for your financial goals. Feel free to reach out to us to schedule an initial consultation.

 

 

 

 

Disclosure: All opinions expressed in this article are for general informational purposes and constitute the judgment of the author(s) as of the date of the report. These opinions are subject to change without notice and are not intended to provide specific advice or recommendations for any individual or on any specific security. The material has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source.  Merriman does not provide tax, legal or accounting advice, and nothing contained in these materials should be taken as such.

8 Helpful Tips for Deciding Which Animal Rescues to Support This Year

8 Helpful Tips for Deciding Which Animal Rescues to Support This Year

 

There are so many animal welfare charities out there, all doing great work saving, helping, and re-homing pets, and all asking for your support. But how do you decide which ones will really value and make good use of your money? Learn useful tips for selecting the best animal welfare groups for you.

More than 23 million American households—that’s practically 1 in 5 families—adopted a pet during the pandemic, according to the American Society for the Prevention of Cruelty to Animals (ASPCA). Even the White House got a new pup when the Bidens adopted Commander!

 

Perhaps You Got a Pandemic Puppy as Well

Little Benny was huddled in a kennel, frightened. A pointer/lab/beagle mix, he was cute as a button and in desperate need of loving companionship and a caring home. His floppy ears loved being scratched, and he adored kids. Hounds2Home, the rescue organization caring for him, was accepting applications. He was adorable! You applied, and after being granted a “Meet & Greet,” your application was approved, and you took Benny home. And now you want to support Hounds2Home Rescue because they did such a great job bringing you and your new best friend together!

Choosing how to support animal welfare organizations is not always so straightforward. Maybe you are an animal lover, but due to a variety of circumstances, you cannot actually house a pet. Instead, you choose to find an organization worthy of your support. BUT THERE ARE SO MANY! There are national groups such as the ASPCA, but then there are also thousands of smaller regional and local groups who do great work.

What Should I Look for in a Nonprofit?

If you are looking to support animal welfare, here is a list of the top eight expert tips for deciding which charities to support this year.

 

1. Conduct Research

Before you offer money to any charitable organization, take some time to do your research. Figure out which organizations align with your values and make the most impact.

There are many great charities out there, but that does not mean they are the right fit for you. So, how can you decide?

  • Make a list of the organizations you are aware of and decide if you prefer to make an impact locally or more broadly.
  • Be realistic about how much you can donate.
  • Do your homework and read up on different animal welfare groups, rescues, and shelters.
  • Examine the overhead costs of various organizations.
  • Ask friends and family for recommendations.
  • See if there is a way to volunteer with the nonprofit of your choice.
  • Consider how well they communicate goals and results.
  • Think about the long-term impact of your donation.
  • Ask questions! The more you know, the better decisions you will make.

 

2. Consider Your Budget

There are many organizations out there that are doing amazing work, and you do not need to spread your money thin by supporting them all. Instead, take some time to find a few animal welfare organizations that are the best fit for you and your family.

Don’t be afraid to get creative with how you give back, either. There are many ways to offer support, from donating money and goods to volunteering your time and skills.

 

3. Consider the Size of the Organization

When you are looking at different nonprofits to support, it is important to consider the size of the group, rescue, or shelter. Are they a small grassroots organization or a national charity with a big budget?

There are pros and cons to both. Smaller organizations may be more personal and have a direct impact on the community they serve, but they may also be limited in their capabilities. Larger groups may have more resources, but they can also be less accountable and harder to track how your money is being spent.

 

4. Consider Effectiveness

While deciding which groups to support, you should consider how effective they are. After all, no one wants his hard-earned money to go to waste. So, how do you determine effectiveness? There are a few things to look for:

  • Wellness: Are they efficient with their money? Do they have good governance structures in place?
  • Effectiveness: Are they making a difference in the world or community? Do they have a solid plan for how they are going to achieve their goals?
  • Use of Donations: Some charities have high administrative costs, and that means that your donation may not be directly affecting an animal’s day-to-day quality of life.

 

5. Consider Transparency

Consider how much information you can find about the organization, rescue, or shelter online. Learn how much of their budget is allocated to administrative expenses versus specifics like medical care, food, and housing.

Charity Navigator is a great resource for evaluating nonprofits. It has a rating system that ranges from one to four stars, and it breaks down how each charity scores in seven different areas. It is a great way to look at overall performance.

 

6. Consider the Mission

The organization’s mission is the goal it is attempting to achieve. It is something you both care deeply about.

For example, some animal rescues focus on re-homing cats and dogs in general while others focus on caring for older dogs or difficult-to-place dogs. Most shelters house animals hoping to reunite them with owners, but some also perform euthanasia when they become full.

 

7. Consider Track Record

Of course, you should also make sure that the organization you’re choosing is reputable and has a good track record to ensure your money will be used wisely. Has it made a positive difference in the lives of the animals it has helped? Are there obvious achievements in their history?

 

8. Consider Location

The location matters because while there are many wonderful animal welfare organizations around the world, contributions to a foreign organization are not tax-deductible. It may be worth exploring where the organization is registered to be sure you can take full advantage come tax time.

 

Follow Your Heart…Wisely

As humans, it feels good to support organizations that are in alignment with our values. It is fulfilling to think that what cannot be done alone can potentially be done via a group of dedicated people who have developed the many nonprofits that help pets and animals all over the world. There is power in numbers, right?

There are plenty of resources out there that can help you make an informed decision. Take some time to do your research, and then choose the organization that speaks to your heart. Be sure to consult with your financial advisor about any ongoing or legacy donations you may want to include in your estate plan.

 

 

 

Written by Lafond Wanda. Exclusively for Merriman.com.

Lafond Wanda is a professional content writer, copywriter, content strategist, and communications consultant. She started young with her writing career from being a high school writer to a university editor, and now she is a writer in professional writing platforms Rated by Students and Top Writing Reviews—her years of expertise have honed her skills to create compelling and results-driven content every single time.

 

 

Disclosure: All opinions expressed in this article are for general informational purposes and constitute the judgment of the author(s) as of the date of the report. These opinions are subject to change without notice and are not intended to provide specific advice or recommendations for any individual or on any specific security. The material has been gathered from sources believed to be reliable; however, Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Merriman does not provide tax, legal, or accounting advice, and nothing contained in these materials should be taken as such. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. As always, please remember investing involves risk and possible loss of principal capital, and past performance does not guarantee future returns. Please seek advice from a licensed professional.