As 2023 nears its end, it’s time to think about specific financial tasks you can do before year-end to assist in your tax planning efforts for payments due in 2024.
In addition to year-end planning, you should also set your sights on the new year and think about what truly matters to you.
Do you have a financial plan and investment strategy based on your current circumstances, concerns, and goals?
Is there a custom solution designed specifically for you?
At Cogent Strategic Wealth, we take a different approach to managing your wealth. It starts with our Cogent Conversations, the foundation of our financial planning process.
In this article, we’ll explore how having Cogent Conversations can assist you in making smart year-end moves to bolster your financial well-being in 2024.
2023 Year-End Tax Planning Tactics
Part of our Cogent Conversation process is reviewing your year-end tax planning strategy and making recommendations. As your wealth management partner, we continually and proactively inform you about ways changes in the markets, the economy, tax legislation, and new alternatives can improve your overall results.
For example, the following are a few year-end tax planning tactics that you can use to reduce your tax burden:
Evaluate your investment portfolio for any underperforming assets. Sell and tax loss harvest those investments at a loss to offset gains from the sale of other investments, thereby reducing your overall tax liability.
Consider making charitable donations before year-end. Donations to qualified charities or to a donor-advised fund can result in mitigating capital gains tax and give you a charitable tax deduction, lowering your taxable income while supporting causes you care about.
If eligible, contribute the maximum allowable amount to tax-advantaged retirement accounts like a 401(k), traditional IRA, or HSA accounts. These contributions can lower your taxable income and increase your retirement savings at the same time.
Assess timing if you plan to sell investments with substantial capital gains. Delaying the sale into the next tax year can defer the tax liability and give your better-performing investments more time to appreciate.
Setting Yourself Up for 2024 Financial Success
Many talking heads today are discussing topics like persistent inflation, rising interest rates, the impact of the 2024 Presidential election on the markets, and a possible recession. Not to mention a national debt that is well above $33 trillion. Image the interest payments on this amount of debt.
Given this “noise,” no matter how real, the following are three of our top strategies that can assist you in protecting your hard-earned wealth as we move into 2024:
- Don’t panic! Emotional reactions to economic events and market volatility can lead to undesirable outcomes. Instead, adopt a rational, disciplined approach rooted in evidence-based data and in-depth analysis. This means resisting emotion-backed decisions when market conditions are more volatile. Stay focused on your long-term financial goals and rely on a disciplined, evidence-driven investment strategy. Thoughtful, rational decision-making based on your long-term plan will increase your odds of achieving your financial goals.
- Working with your wealth management team, develop an asset location strategy that looks at the placement of your assets in taxable, tax-deferred, and tax-free accounts. Asset allocation can make a meaningful difference in your after-tax returns. Maximizing your after-tax return for a given asset allocation will increase the odds of achieving your goals.
- Stay up-to-date with changes in tax laws and regulations. Tax codes evolve, and awareness of these changes enables you to optimize your tax planning strategies. By working with an advisor like Cogent, you can learn about and implement best practices for minimizing that percentage in ways your tax preparer may not be prepared to offer.
A Deeper Look at Cogent Conversations
As an affluent investor, you may have several alternatives that you can use in 2024, but what’s the right path for you and your family?
Through our conversational format, we help you make informed decisions based solely on your current circumstances, concerns, and goals. The core purpose of our conversations is to provide you with the guidance and expertise you need to make your vision happen.
The Design | Build | Protect Process
In the Design stage, we focus on understanding your financial situation and goals. We develop a Life Map that ensures every action is a step toward pursuing your financial goals.
During the Build stage, we’ll craft a strategic wealth plan that addresses trade-offs and choices so you can make confident financial decisions. You actively shape your financial future, adapting the plan as circumstances evolve to stay focused on pursuing your financial goals.
The Protect stage is about continually monitoring your progress, identifying potential risks, and adjusting strategies as necessary. Life’s unpredictability means that a static plan and investment approach won’t work. Life can be a series of ups and downs; our role is to stay abreast of those changes and react appropriately.
We don’t offer a one-time, fixed plan that ignores what is happening around you. We provide a dynamic, adaptive service that constantly adjusts to a world of risk and opportunity.
Planning for 2024 Success
In life, we constantly face choices and their consequences. We are accountable for our choices. For example, many people are overworked, spend excessive hours at work, and miss precious family time. Others pour their energy into their life pursuits, becoming so involved in their work that it becomes difficult to separate their personal and professional lives.
This balance can be challenging. However, consider the power of a financial plan that can simplify your life. It is like a roadmap for your financial future – your destination could be a comfortable lifestyle during retirement and financial security later in life.
People often wonder if sacrifices for their businesses or careers will ultimately pay off. The clarity and confidence that come from knowing you’re on the right path can be very fulfilling.
At Cogent Strategic Wealth, we’ve made it our business to take the guesswork out of investing and financial planning. With years of experience under our belts, we specialize in crafting personalized strategies that help our clients achieve long-term success. We take pride in being clients of our own firm, which means we treat your finances with the same care and attention we give to our own loved ones.
This knowledge doesn’t just reduce the stress of the unknown; it can transform you. It makes you a better partner, parent, grandparent, or leader. Being aware that you’re taking active steps to manage what’s within your control and preparing for what’s not is empowering.
Connect with us to learn more about our Cogent Conversations, which can be life-changing.