Your 2022 Half-Year Planning Checklist

May 25, 2022


As 2022 draws to a half, it’s time to begin organizing your finances for the second half of the year. To help you get started, we’ve compiled together a list of key planning topics to consider.


Consider grouping deductions. The standard deduction for the tax year 2022 was adjusted for inflation and is $25,900 for a married couple filing jointly as opposed to $25,100 in 2021. If you hope to exceed the standard deduction, you should look elsewhere. One possible strategy is to move deductions you were planning to take in 2023 to 2022. For example:

Consider paying for expensive prescriptions or other medical expenses before the year ends, especially if you’ve already incurred substantial medical expenses this year. However, be advised that you are only permitted to deduct medical expenses exceeding 7.5% of your adjusted gross income.

Make gifts to a donor-advised fund this year. You’ll receive a full deduction even if grants from the fund to your favorite charities aren’t made until next year. One word of caution: custodians of donor-advised funds experience high volume during the last weeks of the year, so make certain you send your gift well before December 31.



Use your annual exclusion of $16,000 before the end of the year. You can give up to $16,000 to any individual ($32,000 for married couples) without incurring gift tax. Your gifts must be not only received but also deposited and cleared by December 31.

Contribute a gift to a 529 plan. Many states allow you to deduct contributions, but you won’t be able to do so unless you make your gift before December 31. If you’ve already paid for some qualified expenses from a checking, savings, or investment account this year (tuition, room and board, books, computers, etc.) and wish to reimburse yourself, complete the transaction by the end of the year. It will be easier to prove that your 529 plan distribution was used to reimburse you for expenses paid for this year.

Review your beneficiary designations and other estate plan details. If you’ve experienced changes in your life since you created your estate plan, make sure your plan continues to reflect what you want for yourself and your family. Review beneficiary designations on retirement plans, trusts, and insurance policies and make certain any trustees, guardians, or other fiduciaries you’ve appointed are still the best choices for those important roles. Federal estate tax rules are changing, so be sure to consult your estate planning team.



Maximize your 401(k) or other retirement plan contributions. If you participate in a 401(k) plan, take full advantage of it and maximize its benefits. You may contribute as much as $20,500 for 2022, plus an additional $6,500 if you’re 50 years of age or older for a total of $27,000. Contributions must be made by December 31. If you own an IRA, you have until April 15, 2023, to make your 2022 contribution. The maximum amount allowed is $6,000, plus an additional $1,000 for investors 50 years of age or older.

Remember to take a Required Minimum Distribution (RMD) from your IRA or other retirement plans this year. The CARES Act waived all Required Minimum Distributions for 2020, but they are back in force for 2021. If you turn 72 this year, you may be able to delay the distribution on your traditional retirement accounts until April 1, 2023. If you turned 72 in 2020 or earlier, you must take a distribution by December 31, 2022. People still working may not have to take a distribution from their workplace accounts. The IRS penalty for RMDs not taken on time can be 50% of the amount not properly taken. If you have an inherited IRA, you may have an obligation to take an RMD. It is important to talk with your financial advisor to see if you need to take a distribution by the end of this year.

Consider converting your traditional IRA to a Roth IRA. If you’re like many Americans who will not be earning as much income in 2022 as they have in previous years, there might be a silver lining. By converting your traditional IRA to a Roth IRA, you will have to pay income tax on the assets converted, but perhaps at a lower rate. In return, your Roth IRA will enable you to withdraw assets tax-free for retirement and avoid the need to take a Required Minimum Distribution every year beginning at age 72. We also expect taxes to go up next year, and it is possible that tax rules will change to make it impossible to convert non-deductible portions of traditional accounts to Roth beginning in 2023. As such, this may be the best opportunity for some people to make a Roth conversion.

Qualified Charitable Distributions (QCD) If you are 70 ½ or older, you can direct up to $100,000 from your traditional IRA to go to a qualifying charity (Donor-Advised Funds are excluded) without the distribution appearing on your tax return. While you will not receive a tax deduction for the gift, there will also be no income from the distribution on your tax return. This can be very helpful when calculating the deductibility of medical costs and Medicare premiums based on income tax returns. QCDs also count toward Required Minimum Distribution amounts.



Life changes constantly, as do your insurance needs. That’s why it’s important to review your insurance coverage on a regular basis to make sure it still meets your needs.

Manage Your Personal Life Changes. A lot happens in a year that can have substantial effects on your insurance costs, coverage options, limitations, and more. If you’ve had a life event, such as a new job, or if you’ve started a family or purchased a home, we encourage you to revisit your coverage.

Ensure Appropriate Coverage. An annual review of your policies also helps you stay updated with what your coverages protect and where you may have gaps you’d like to fill with supplemental coverage or additional policies.

Equally important to building assets is having a plan to protect them. Review your homeowners, auto, and umbrella policies annually to ensure your plan still fits your needs.

Take advantage of Health Savings Accounts (HSA). If you’re covered by a health insurance plan with high deductibles, consider opening an HSA. If you’ve already opened an HSA, make sure you defer the maximum amount allowed for the year. Maximums are $3,650 for individuals and $7,300 for families. You may also contribute an additional $1,000 if you’re 55 years of age or older.

Remember: HSA contributions are made with pre-tax dollars, and when you use them for qualified medical expenses, you incur no income tax on withdrawals. One more important tip: if you’re covered by a Flexible Spending Account, use any money you’ve contributed before the end of the year. Otherwise, you will lose it.



Take inventory of your expenses. If you were a company, you’d be reviewing your expenses for the year and projecting them for 2023. We suggest you do just that. By determining what you spent in 2022, you can try to develop a budget for 2023. In addition, consider any major expenditures you’ll have to make next year and start saving for them now, if at all possible.

Take charge of your credit. Contact the three major credit bureaus for copies of your credit rating and report. You should go through this exercise at least once a year and be on the lookout for errors and possible fraudulent activities.

Convene a family finance meeting. The holidays are an ideal time to get together with your family, discuss financial goals, identify issues that should be addressed, and persuade others about any decisions you might be contemplating.



Review and rebalance your portfolio. Some investments have performed better than others this year, and your portfolio’s asset allocation may or may not now be what you originally intended. The end of the year is a good time to re-evaluate and determine whether your asset allocation continues to reflect your goals and risk tolerance. If you have any unrealized losses, consider taking them to offset any gains you might have realized this year for tax purposes. If you have unrealized gains, congratulations, but make certain your overall portfolio isn’t more heavily weighted toward stocks than you want it to be.

Finally, review all your accounts — Such a review includes IRAs and 401(k)s as well as taxable accounts. Consider whether you’re employing a tax-efficient approach in your taxable accounts or a needlessly tax-efficient approach in your retirement accounts. Also, calculate your overall allocation. Does it bear any resemblance to the allocation you’ve set for individual accounts? Your Verus Financial Advisor can help you rebalance, review and reset your course, if necessary, for this year and beyond.

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2023 Webinar Line Up

We at Verus are still continuing to host educational and interactive webinars throughout the year so you can learn from the comfort of your home! Click to see the webinar links!

Strength in Houses

The extended strength of the US housing market prompted households to withdraw $82 billion of home equity in Q1, the largest amount in 15 years. Going forward, refinancing will likely be subdued as the average mortgage borrower has already locked in an interest rate over 200 bps below current rates. We believe that record-high levels of untapped home equity may add to the sizable savings buffer that households hold.‍

Your 2022 Half-Year Planning Checklist

As 2022 draws to a half, it’s time to begin organizing your finances for the second half of the year. To help you get started, we’ve compiled together a list of key planning topics to consider. Your Verus Financial Advisor can help you rebalance, review and reset your course, if necessary, for this year and beyond.

Where are we now in the market?

The market appears to be caught in a traditional growth scare if there is anything that is scaring the markets right now it's not just happening in US it's happening broadly as well. The roller coaster continues so we're seeing yields higher, and stocks lower and why that is happening we're actually going through a period of transition where the stimulus you know the sugar rush from stimulus is wearing off.

Estate Planning 101

A good estate plan helps ensure the right people will receive the right property at the right time. When you die, your assets are subject to a number of expenses that can significantly reduce the size of your estate left to your heirs. Proper estate planning can minimize these expenses and determine how the costs that remain will be paid.

Using Taxes to Your Advantage

Tax planning is the analysis of a financial situation or plan from a tax perspective. It is the reduction of tax liability by the way of exemptions, deductions, and benefits. The purpose is to ensure tax efficiency. Tax planning includes making financial and business decisions to minimize the incidence of tax.

Protecting Your Greatest Asset

To put it in simple terms, disability insurance is insurance for your income. It allows you to protect your most valuable asset, your income, in the event you become too hurt or sick to work. There are two options: Short-term and long-term. Analyze your existing coverage to find the plan that best fits your lifestyle! It can be more affordable than you think and the benefit can be used for different things such as medical expenses, household expenses, or help with household tasks. Most people protect their home, car, phone, and identity so why not protect your income.

Protect Your Loved Ones With Life Insurance

If you were to die unexpectedly, would your spouse have enough money to cover funeral expenses and daily living expenses? Would there be enough money to pay for everything your family relies on you for, if you were suddenly not around? Would your family have to move and change their lifestyle if you were to die prematurely? If your spouse were to outlive you by 10 or 20 years or more, would they be able to make ends meet? Life insurance pays cash to your loved ones after you die, allowing them to remain financially secure.

College is Right Around the Corner

Why Start Planning Now? A child that is born now will face tuition costs that are three to four times higher than what they are now. It is never too early to start planning for your child's future. There are many ways to save for college. Some you might have heard before, some you might not have. This article easily sums up different college saving plans that you can potentially think about using.

The Basics of Investments

What is Investing? Investing is the act of committing money or capital to an endeavor with the expectation of obtaining an additional income or profit. Making your money work for you maximizes your earning potential whether or not you receive a raise, decide to work overtime, or look for a higher-paying job. There are many ways you can invest which include putting money into stocks, bonds, mutual, real estate, or starting your own business. It does not matter which method you choose for investing your money, the goal is always to put your money to work so it earns you an additional income.

Why You Should Keep Investing Even When Markets Are Down

As investors during a decline in the market, it is difficult to remember why we decided to take the risk of investing. In its best days and its worst days, the stock market draws the most attention, but there is one surefire way to keep trading worth your time: Stick it out for the good and the bad. If you plan for the long-term, don't panic. Instead, here are 3 reasons to keep investing, even in the worst of times.

What does Fed rate hike mean for the market?

The big news today is that Chairman Jerome Powell and the Federal Reserves announcing a 25 basis point hike in interest rates. Let's see how this could potentially affect the market. If we take a look back at historical data, the S&P 500 has averaged a 3.7% growth, 12-months following the first rate hike of each cycle from 1971 to 2004. 24 months after the first hike, it has seen an average of 16.3% growth and averaged 31.0% after 36 months.

August Market Summary

GLOBAL EQUITIES: Q2 earnings data kept Delta variant concerns at bay, initially reversing the S&P 500’s mid-week decline. However, despite US Q2 GDP posting above its pre-pandemic peak, it came in lower-than expected, leading the S&P 500 to end the week lower by -0.35%. Meanwhile, Chinese stocks saw significant volatility as investors grappled with Beijing’s tighter financial regulations. The MSCI China Index ended the week lower at -6.06%. In the UK, a drag in the mining sector and variant concerns left the FTSE 100 up only 0.10%.

Mega Roth IRA: What It Is And How It Can Work For You!

Roth IRAs have been a popular topic as of late. For a long time, it was an unspoken secret used by retirement planners. However, the IRS released guidance that specifically addressed both backdoors Roth IRA conversions, and the so-called Mega Roth IRA. As a result, it has gained even more traction and interest.

Where Will Your Equity Profile Be in a Year?

The market is disengaged from financial fundamentals and all reality. Remember December 2018when the market fell 20% (over three months) over a “potential” China trade war? And remember the big rally in 2019 – and you’re saying to yourself “If only I had bought back then!” Surprise! You're getting a second chance!

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