What are your top financial tips for 2022?
President & Founder
Bezou Financial Planning Group
Looking, let’s say, at tax advice for retirees, I would advise that after building after-tax cash reserves this year, you can then spend those funds in 2022 and reduce taxable income without impacting your lifestyle. This might drop you to a lower tax bracket and qualify you for national health care if you are retired and under 65, freeze your property tax value if 65, or qualify you for 0% capital gains or 0% tax on Social Security. Ask your CPA to work with your CFP. Also, ask your advisors for alternatives to traditional fixed income or bond funds.
Pay attention to any new potential tax changes and how they will affect your investments. Changes in capital gains taxes can alter your selling decisions. If we get an environment of sustained rising interest rates, the world will look very different from an investment standpoint than it has over the past 30 years. Previous relationships, correlations and solutions to old problems might breakdown. Make sure to understand how your portfolio works together, what your objectives are, and what is the purpose of each asset within the larger context of your portfolio.
P. David Soliman, CPFA
Faubourg Private Wealth
Whether it’s COVID-19 risks or uncertainties from Congress, variables have been increasing at a remarkable pace. Further complicating matters is the fragmented advice available to individuals who may be dealing with multiple advisors who aren’t communicating for tax, investment, legal, and insurance issues. This is why it’s crucial to have comprehensive financial planning, not just a financial plan. Planning is a proactive, ever-evolving engagement. Find a planner who recognizes this need and is willing to coordinate a team of experts on your behalf.
Senior Vice President, Chief Commercial Lending Officer
My top tip for small businesses is to watch both your costs and your profit margins. Too many businesses assume they are making money if sales are strong; I suspect many will discover in the next six months that their margins have suffered. Don’t forget your labor costs when analyzing this; labor costs are on the rise. Also, be prepared for taxes to rise and incorporate this into your overall costs. Consult with your CPA on what to expect tax-wise in 2022. And finally, don’t forget to have your CPA explore your eligibility for the Employee Retention Credit when filing your payroll taxes.