AARP<\/a> | By\u00a0Bruce Horovitz | December 19, 2022 | Money Moves | Shield Insurance Agency<\/p>\n\n\n\n With 2023 just days away, could there be a more confusing time for investors? On one hand, the discussion is all about the upcoming recession \u2014 but is there actually going to be one? On the other hand, the discussion is also about the inflation<\/a> monster, which has seriously impacted all of our wallets.<\/p>\n\n\n\n But are there signs that the monster is finally getting tamed, or is that just an illusion? In either case, what is the best way to prepare for spending and investing in the year ahead?\u00a0AARP reached out to certified financial planners for tips on what older investors need to consider for the coming year. Here are their 10 best tips for 2023.<\/p>\n\n\n\n If you are still working and have the cash flow, 2023 could be a terrific time to max out your tax deferrals<\/a>, says Rachel Elson, a certified financial planner in San Francisco, California. Federal limits have jumped sharply, so with catch-up contributions, workers age 50 and up will be able to put $30,000 into workplace retirement plans like a 401(k) or 403(b).<\/p>\n\n\n\n You’ll need to have sufficient income to allow this kind of saving because you could be tying up those dollars for several years, she says. But if you’re in your peak earning stage \u2014 and especially if you’re living in a high-tax state \u2014 the tax break from maximizing your deferrals can be meaningful.<\/p>\n\n\n\n The one place that\u2019s most obvious for tax deductions \u2014 charitable contributions<\/a> \u2014 is also the place where many folks fail to get their full deductions, says Mitchell Kraus, a certified financial planner in Santa Monica, California. In reviewing his clients\u2019 tax returns, Kraus discovered that most of them weren\u2019t getting the full deduction from their charitable contributions because they either took the standard deduction or they were giving from the wrong pool of money.<\/p>\n\n\n\n More than 80 percent of Americans take the standard deduction, he says. There are other options. People over age 70\u00bd can donate up to $100,000 from their IRA. (The contribution will not count as income.) Also, donating appreciated assets, such as stocks, might not create an extra deduction, but can avoid the capital gains taxes you would have to pay if you simply sold the asset, he notes.<\/p>\n\n\n\n More than 54 percent of America’s small business owners are age 50 and over, according to the Service Corps of Retired Executives.\u00a0Those who are self-employed can still have access to a\u00a0retirement plan<\/a>\u00a0although many don\u2019t realize it, says Marguerita M. Cheng, a certified financial planner in Gaithersburg, Maryland. The benefit to them is additional savings for retirement and tax savings either today or in the future. For those who have employees, the options include Simple IRA, SEP IRA or 401(k).<\/p>\n\n\n\n Few investments offer the safety and security of U.S. Treasury bills<\/a>, says Jordan Benold, a certified financial planner in Frisco, Texas. These are U.S. securities that mature in one year or less. Currently, a two- to six-month treasury bill will pay more than 4 percent, Jordan says.<\/p>\n\n\n\nSmart Money Moves<\/h2>\n\n\n\n
1. Supersize your retirement plan contribution<\/h3>\n\n\n\n
2. Double-check charitable contributions<\/h3>\n\n\n\n
3. Create a business owner retirement plan<\/h3>\n\n\n\n
4. Invest in U.S. Treasury bills<\/h3>\n\n\n\n