It’s a good idea to start jotting down goals and action items for 2022. In doing so, let’s first review this year and look at a few things that you may still have time to accomplish. Although 2021 may not have been quite the year we hoped for, and many uncertainties are going forward, COVID and tax policy are two; there are plenty of things still in our control. Below is a checklist for you to consider:

1. Review your portfolio. Year-end rebalancing isn’t a must, but it’s usually a good time to evaluate your portfolio and consider making changes. For example, 2021 looks to be another strong year for stocks, so your portfolio may be too stock-heavy. On the other hand, that may be OK since stocks may continue to do well next year. First, however, see how you feel about your risk tolerance.
2. Tax-Loss harvesting. While you may be rebalancing your portfolio, you may also want to rid yourself of losers. Matching losses with gains is a great way to reduce your tax bill. Also, will you need any money for big purchases next year? Now is a great time to raise cash while stocks are at lofty levels.
3. Update your beneficiary designations. Did you have a major life event this year? Married? Divorced? Remarried? More children? Deceased beneficiaries? Update now. Remember: beneficiary designations bypass your Last Will & Testament. So make sure your named beneficiaries are the people or organizations you want to receive your money upon your death.
4. Prepare for higher contribution limits on your 401(k) and 403(k) plans in 2022. The maximum contribution goes up by $1000 to $20,500 next year. If you’re age 50 or older, you can add $6500 for a total of $27,000. So adjust your paycheck before year-end.
5. Emergency Savings. Emergencies are not “ifs.” They’re “whens.” They will happen. Unfortunately, you don’t know when. Even when you’re retired, car repairs, home maintenance, and medical bills still occur. To prepare, we recommend keeping three-to-six months of living expenses in a safe account, like a money market fund, CD, or online bank savings account.
6. Health Savings Account (HSA). Did you have a high deductible health plan this year? If yes,fund your HSA. The maximum contribution for singles is $3600; for families, it’s $7200.For those 55 years and older, you can add $1,000. With a catch-up contribution, people who have self-only coverage can contribute up to $4,600 in 2021; those who have family coverage can contribute a maximum of $8,200.
7. Give up to $300 to charity. You can deduct up to $300 for single filers, $600 for married, even if you don’t itemize your deductions. And the charitable donation limit for 2021 is 100% of your adjusted gross income (AGI) (formerly 60 percent before the CARES Act).
8. Qualified charitable donations (QCDs). If 70 ½ and older, you can contribute traditional IRA funds to charity. The limit is $100,000. No donor-advised funds. Important: make sure the contribution goes directly to the charity from your IRA. Don’t make a withdrawal from your IRA, and then write a check to the charity.
9. Medicare. Turning 65 next year? You have a seven-month window to apply for Medicare: 3 months before you turn 65, the month of your 65^th birthday, and three months after you turn 65. Remember: 3+1+3 =7. However, don’t wait. Apply early. Mistakes and delays happen. You will forever pay premium penalties if your miss this deadline.
10. 529 Plans. Many states offer state income tax benefits for contributions to their 529 plans. The deadline for most is December 31. The gift tax exclusion limit is $15,000 per recipient, and it rises to $16,000 in 2022. You can give up to $15,000 worth of money and property to any individual during the year without any estate or gift tax consequences.

Enjoy the Holidays!

Sincerely, 
Henry 

Henry Gorecki, CFP® 
HG Wealth Management LLC 
10 S. Riverside Plaza, Suite 875
Chicago, IL  60606 
312-474-6496 
henry@hgwealthmanagement.com