With tax time approaching, now is when you should consider strategies to maximize your financial assets while reducing your tax burden with NJM Wealth Preservation Strategies.
As we ring in 2023, we face true financial uncertainty. With this in mind, finding the best way to maximize assets while reducing your tax burden can be a path to putting money in your pocket even if the economy is in a downturn.
From maximizing retirement contributions to utilizing Health Savings Accounts (HSA), there are many savvy strategies that can help you grow wealth in the face of economic turmoil.
Maximizing Retirement Contributions
Employer sponsored 401(k) plans, and traditional IRAs that can be opened with financial institutions, offer tax breaks if you plan for it. The largest consideration being that money you contribute is exempt from taxation. On top of this, gains made from these retirement accounts are not taxable until retirement.
Roth 401(k) plans offer another angle in which money contributed is taxed, but money earned is not. Money can be contributed into a Roth 401(k), invested into an asset, and if that asset grows exponentially that money earned will not be taxed once tapped into.
Be aware that IRA contribution limits are $6,000 for the year and $7,000 if you’re 50 or older for 2022. These amounts increase by $500 each for 2023.
Health Savings Accounts (HSA)
Health care costs continue to rise, outpacing inflation. By utilizing a Health Savings Account (HSA) - which allows an individual to contribute pre-tax dollars that can be used for medical expenses - you can simultaneously lower your healthcare expenses and lower your tax burden.
Under an HSA, you can contribute up to $3,650 for individual coverage and up to $7,300 for family coverage. An added bonus is that HSAs can earn interest once a deposited minimum is met and those earnings are not taxed.
Be aware that HSAs are limited to those who are enrolled in a High Deductible Health Plan.
Utilize Losses to Lower Your Taxes
With the way the market has performed in 2022, chances are some of your stocks haven’t done as well as you may have hoped. One way to turn this negative into a positive is by selling that stock at a loss to offset any capital gains taxes or income tax.
Consider that you can only offset up to $3,000, but if you did have some underperforming stocks this year, this can be a way to save a considerable amount come tax time.
Final Thoughts
Tax time is coming, and the New Year is here. Use this time to consider some of the options above as ways to lower your tax burden, maximize retirement savings and grow your financial portfolio across the board.
Let’s Start the Conversation
NJM Wealth Preservation Strategies was founded on principles of transparency and with the goal of preserving your wealth for generations to come. With the potential for a recession higher than ever, we believe that evaluating all strategies - including hedging - can be a valuable tool to protect your wealth.
Here at NJM, our Wealth Preservation Specialist, Nicolas J McLeod, is a true Fiduciary. We operate by a code of ethics & proudly offer you the best as we believe you deserve nothing less.
The entire team at NJM values our foundation of legal and ethical trust with transparency and have proudly helped thousands of families across our great nation redirect their future by securing their financial well-being.
If you are interested in reclaiming control of your retirement & partnering with a firm who will build a portfolio around your best interests and goals, while focusing on eliminating risk and preserving wealth, reach out today.
Are You Ready for 2023?
A thoughtful approach to wealth management can help you protect and extend your wealth.
Nicolas (Nic) J. McLeod is a man of determination and competitive grit. Whether in the gym, on the tennis court with his wife or at home teaching his children a new chord on the guitar, Nic brings a high level of intensity and passion to the forefront.
Nic is a second-generation Wealth Preservation Specialist. He was fortunate to grow up having witnessed his father act as a trailblazer in an industry we refer to today as Wealth Preservation. This impacted him at an early age and in 2005, Nic decided to launch his own firm. He has now helped thousands of families spread across the nation who have entrusted him with their financial well-being. Nic’s client base is diverse in both their professional backgrounds & financial needs. Nic has been actively serving his clients for nearly 20 years and proudly owns a record free of any consumer complaints. This is a direct result of the core values at NJM Wealth Preservation Strategies.
"We look forward to inviting you to experience how our team can help you successfully navigate the years leading up to your retirement. Our team will equip you with a personal, thorough & exclusive plan that is actively managed to ensure you continue to prosper throughout your retirement years."
-Nic
Wishing you and yours a healthy, wealthy and happy 2023. From the entire team at NJM Wealth Preservation Strategies.