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There’s still time to make retirement savings and investment adjustments with income-tax impacts for year-end 2022.
However, with the holidays looming, the opportunity is narrowing, said Eric Hoogstra, a Grand Valley State University clinical associate professor of finance and Seidman Financial Planning Certificate Program director.
“With the market being down, probably the biggest thing now is to move some of your traditional IRA funds into a ROTH IRA,” he said. “If you transfer them now, and pay taxes on this reduced amount, going forward the growth would be tax free.”
Contributing to a ROTH or traditional IRA can be done through April 18, 2023, to take the tax benefit for the 2022 tax year.
“The biggest thing today is to look at your investments and make sure you’re diversified enough within this current environment,” he said.
Retirement savings differs for someone age 30 compared to a 60 year old, said Hoogstra, the son of a Holland Public Schools psychologist and Hamilton Community Schools kindergarten teacher and a beneficiary of their Michigan Public Schools Employees’ Retirement System pensions.
“Most people, as they age, they should probably get a little bit more conservative,” he said. “When you’re 50, you probably shouldn’t be 100% in stocks anymore.”
In addition, doubling up on your charitable contributions within one year to push you over the standard limits and then take standard deductions in alternate years is also something that people do.
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