Broker Check

Tax and Retirement Savings Changes for 2023

| January 24, 2023
Share |

Tax and Retirement Savings Changes for 2023

There are a number of tax and retirement changes for 2023, some of which are annual contribution limit increases, others are cost of living increases for Social Security and other government pensions, and many stem from the new SECURE Act 2.0 passed by Congress in late December. 

We are updating our software settings and all client data to reflect these new changes for 2023. During our upcoming financial planning meetings, we’ll discuss what’s relevant to you and how this has (in most cases) improved your tax situation and cash flow/spending power. As each person’s situation is a bit different, as always, we’ll tailor our advice based on your goals and preferences (allowing you to focus on what’s important and filter out the noise). 

Our Social Security software (yes, we have a separate software program just for Social Security) has been updated with this year’s 8.7% COLA. If you send us an XML data file from your account on SSA.gov, we’ll update your Social Security projections with your most accurate benefit data. [Otherwise, we’ll use approximations from your earnings history.] Social Security is an important “leg to our retirement stool.”

In the Financial Planning software (eMoney), we’re changing Required Minimum Distribution ages for all clients who haven’t yet started RMDs (so anyone born since 1951). Clients born in 1950 and earlier have already begun their RMDs. [Please note that the new RMD ages aren’t relevant to those with inherited IRAs; those have an entirely different set - actually multiple sets - of different rules.]

By pushing back RMD dates, this opens up tax planning opportunities for clients. We are excited to discuss these with you at future meetings. Opportunities include delaying paying taxes on IRA distributions by delaying the RMD, providing additional years of possible Roth conversions as well as tax deferral. 

Let us know for your meeting if you have specific questions about the new rules and how they apply to you. And of course we have been proactively thinking about this as well.

Share |