As we bid farewell to 2023, it's time to reflect on a year that brought remarkable developments, challenges, and innovations across the globe. From groundbreaking advancements in technology (specifically AI) and science to the ongoing pursuit of sustainability, 2023 has been a year of progress and adaptation. The world witnessed transformative changes in various fields, shaping the way we live, work, and interact. As we delve into the recap of the past 12 months, it becomes evident that 2023 was a pivotal chapter in our collective journey, marked by resilience, creativity, and a shared commitment to building a better future. Join me in revisiting the milestones, breakthroughs, and noteworthy events that defined the dynamic tapestry of 2023.
Starting the Year Off Strong
Written by Ryan Vogel, SECURE ACT 2.0: What These Legislative Changes Could Mean For You, highlighted key changes and expansions made to 2020's earlier legislation. Several of the changes made are relevant only to people with a select set of objectives and circumstances. However, Vogel listed the changes he felt were most impactful to our clients. This included the changes to required minimum distributions, specifically, an increase, providing a favorable extension for implementing tax planning strategies. Specifically, it allows more time for Roth conversions, realizing gains at the 0% tax rate, and the ability to spread out other income while in a lower tax bracket because of the lack of RMD, which keeps income low.
The expansion in legislature, also, introduced postmortem estate and income tax planning options, particularly beneficial for married individuals with traditional IRA or retirement plans. This allows you to choose a more favorable option regarding RMD that will lower your income.
For the self-employed persons with too much to do and too little time, Vogel points out that the new law changes the deadline to allow self-employed individuals to create solo 401k plans for the prior tax year up to the tax filing deadline (including extension). Additionally, employers gained the option to make matching Roth contributions, though this would be considered additional income.
Another Legislative Update
In his debut piece, Devin Starr authored a piece highlighting the updates to New Jersey's ANCHOR Program (Changes to the 2023 ANCHOR Program).
For 2023, the program has introduced automation and auto-enrollment for those who applied in 2022. Auto-enrolled individuals don't need to reapply, but if not notified by September, filing a new application is advised due to past processing errors. Benefit amounts depend on 2020 income and residency status, with additional benefits for seniors over 65.
And a final reminder that the filing deadline is December 29th.
Real Crimes and Artificial Intelligence
Dan Satz authored an insightful piece, AI-Enabled Heists: The Rising Sophistication of Digital Scams, on one of the prevailing subjects of the year: artificial intelligence, specifically, how artificial intelligence is allowing fraudsters the ability to enhance the sophistication of their scams.
Satz recounts instances where clients faced increasingly sophisticated fraud attempts, including a phone-based AI voice masking scam and a fraudulent charge scam. He offers cautionary advice, such as being vigilant against suspicious calls and verifying the legitimacy of communication from banks or relatives. It also stresses the importance of strong passwords, dual-factor authentication, and the adoption of a secret word or phrase with family members to thwart potential scams. The piece concludes by underscoring the accelerating pace of AI advancements, urging individuals to remain cautious in the face of evolving threats to digital and financial well-being.
(For more on protection from cybercrimes we encourage you to read our series of Cybercrime Prevention Blogs: part 1, part 2, part 3, and part 4).
From Keepsakes to Cash Flow: Treasured Memories and Hidden Gems
The surge in the real estate market prompted downsizing, leading to the discovery of unexpected wealth. Ryan Dunn shares a personal experience of discovering valuable vintage toys while assisting his parents downsize (Finding Cash Under the Couch Cushions). This led to selling items on eBay for extra cash during the holidays. He expands to discuss the challenge of downsizing and finding new homes for sentimental items, suggesting online platforms like StockX, CollX, Stampworld.com, CoinSite, and ComicsPriceGuide for assessing and selling collectibles.
The piece addresses the changing tastes of younger generations and the dilemma of gifting items with sentimental value. It advocates for selling, gifting, donating, or discarding items to declutter emotionally and physically. Additionally, Dunn recommends checking state unclaimed property websites for potential assets. He emphasizes the worth of exploring resources before parting with collectibles, ensuring a less cluttered life and the satisfaction of items finding new homes. Of course, Dunn encourages those with concerns about unclaimed assets or heirloom value to seek professional assistance.
After you have unearthed a bit of unexpected wealth, if you decide to gift any assets to your children or grandchildren Brenden Leese has suggestions on how to begin leading them towards a bright financial future in 9 Simple, But Powerful Ways for Young People to Save Money.
He emphasizes that young adults can jump-start their financial future with a proactive approach to financial planning and offers practical tips for building wealth, such as: taking advantage of employer-matched retirement plans, staying fully invested in all market climates, and identifying & avoiding bad debt. This utilizes one of their most powerful assets: time.
Insights of 2023
In 2023, a stressed banking sector (Stressed Banking Sector - Should I Worry?) saw the collapse of Silicon Valley Bank, market volatility was reflected in many flocking to CDs and bonds, and low housing inventory coupled with aggressive hikes in mortgage interest had many considering it was time to downsize (Trying to Time the Mortgage Market?). Truly 2023 was a year that left a lot of people feeling a bit off-kilter. But Bob Dunn reminds us of the importance of having a synchronized financial plan, cash flow plan, and investment plan to achieve peace of mind in various economic climates. In Quality Planning to Ease the Mind During Crazy Times, Dunn reflects on the challenges of the pandemic, urging readers to prioritize reflection on what's important and caring for loved ones.
We recognize it can be tempting to succumb to planning shortcuts, such as annuities during market volatility or to be tempted by the current high-interest rates offered for CDs; but we advocate for a well-thought-out, holistic view of goals, and strategic investment planning based on risk considerations.
What were your favorite blogs of 2023?