Planning Article
December 2023 – By Ryan Boyle CFP®
2023 may not go down as the best year in human history, but it will be one for the books. To kick off the new year on a positive note, we’ve got some updates and topics to share that can hopefully contribute to a fantastic start in 2024!
Revisit Your Budget & Adjust Your Savings if Necessary
2024 is set to bring forth a variety of changes coming from the IRS, including higher savings levels and deferral amounts. If you received a raise or are just looking to review your overall budget, you now have the option to contribute $7,000 in an IRA for 2024 assuming you fall within the phaseout limits and thresholds to contribute to your IRA and can add an additional $1,000 in catch up contributions if you are 50 and older. If you plan to save in your 401(k) or another employer plan, the limit for 2024 has increased to $23,000, up $500 from 2023. If you have a High Deductible Health Plan and are already saving to an HSA, good news, your contribution limits increased too! For 2024 the new maximum contribution for an individual HSA is $4,150, and $8,300 for a family limit, each of which can allow an additional $1,000 catch up if you are over age 55.
Revisit your Estate Planning Documents
As we inch ever closer to 2026, the Tax Cut and Jobs Act Sunset deadline approaches with little to no signs of an extension being made. This means that come 2026, the estate tax exemption which is set to be $13.61M ($27.22M for married couples) for 2024 will revert down to half of this value and will be adjusted for inflation. If there is no extension made and prior gifts have been made, those gifts will not count towards the new reduced limit, but any new gifts or exemptions that are used will begin to draw down this lowered amount. Should you make gifts to loved ones or irrevocable transfers to your trusts, now would be a good time to revisit the idea of when the move your assets into your trusts, and ensure you are taking full advantage of the increased exemption while you have the opportunity to do so. To help potentially save on attorney fees, you may also want to check up on your Wills, medical directives, and power of attorney documents, and update these as you see fit.
While we can’t promise that 2024 will be better than 2023, we can do our best to help our clients get 2024 started on the right foot. We are here to offer support as you navigate the beginning of the new year. If you have questions or are looking to approach 2024 with sound financial planning and investment management don’t hesitate to reach out to your wealth advisor. Let’s have a conversation about how we can collaborate to set the groundwork for a successful year ahead.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendation for any individual. Although general strategies and / or opinions are revealed, this post is not intended to, nor does it represent or reflect, transactions or activity specific to any one account. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All data and information is gathered from sources believed to be reliable and is not warranted to be correct, complete or accurate. Investments carry risk of loss including loss of principal. Past performance is never a guarantee of future results. Vantage Financial Partners Limited is not a tax advisor. Please consult a tax advisor for any tax related questions.