Each year, I take some free time on a weekend after the first of the year and go to my office and spend a couple of hours conducting my annual ritual of looking at my financial and estate planning matters. During this process, I spend time reviewing the following matters:
- Review the amount of my 401(k) contribution that will be deducted each month from my paycheck each pay in the new year to make sure it is consistent with my financial planning. Each year, the amount of income that I can have contributed to my 401(k) changes. For 2023, the maximum amount that I am allowed to contribute to my 401(k) is $22,500. However, since I am over 50, I am also permitted to contribute a catch-up amount of an additional $7,500 for a total of $30,000 total.
- Review my health savings account to make sure my annual contribution is established. For 2023, the maximum amount that I can contribute to my HSA for my family is $7,750. However, there is also a $1,000 catch-up amount since I am 55 so the total amount that I can contribute to my HSA is $8,750.
- I then look at the possibility of making a non-deductible IRA contribution. For 2023, I am permitted to contribute $6,500 to a non-deductible IRA plus an additional $1,000 catch-up since I am over 50. If I do contribute to a non-deductible IRA, then I immediately transfer it to my Roth IRA where this investment can grow income tax free.
- I then take the time to review my assets in the spreadsheet I have created that shows all of my assets, the ownership of the assets, and the beneficiary designations for the assets. This allows me to make sure that my assets are properly titled to avoid probate upon my passing. This also allows me to make sure that my estate planning wishes are followed so that my loved ones inherit the assets I want them to inherit.
This whole process usually takes me a couple hours each year, however, it is time well spent in order to make sure that my financial and estate planning wishes are planned for the new year.
NOTE: This general summary of the law should not be used to solve individual problems since slight changes in the fact situation may require a material variance in the applicable legal advice.
James F. Contini II, Esq.
Certified Specialist in Estate Planning,
Trust & Probate Law by the OSBA
Krugliak, Wilkins, Griffiths & Dougherty Co., LPA
405 Chauncey Avenue NW
New Philadelphia, Ohio 44663
Phone: (330) 364-3472
Fax: (330) 602-3187