Reflecting on the Past Year and Planning for 2024

As we navigate through tax season, it’s natural to find ourselves sifting through the past year’s financial documents, reflecting on our earnings, spending habits, travels, and overall lifestyle. This period of introspection often leads us to question: How was our year, really? Did it live up to our expectations, and how do we envision the upcoming year shaping up?

Evaluating the Year Gone By

Reflecting on the past year is more than just an exercise in financial accountability; it’s about understanding our life’s trajectory and the choices we’ve made. Consider the following:

• Your Spending Habits: Did you find yourself spending too much, or perhaps not enough? It’s common to have differing opinions on spending within a household. Finding a balance that satisfies both you and your spouse is crucial.
• Charitable Giving: Reflect on your contributions to church and charity. It’s essential to assess whether you’ve allocated enough of your resources to causes you care about.

Looking Ahead to 2024

With another year behind us, now is the perfect time to set intentions for the year ahead, especially regarding our financial well-being and retirement planning.

• Retirement Account Contributions: If you’re still in the workforce, assess whether you’re contributing enough to your retirement accounts. It might be time to adjust your withholdings or consider the type of contributions (Roth or Traditional) that align with your future goals.
• Tax Withholdings and Refunds: Are you withholding too much tax, resulting in a substantial refund? While a large refund might feel like a windfall, it essentially means you’ve loaned money to the government interest-free over the year.
• ROTH Conversions: Evaluate whether converting to a Roth IRA is a strategic move for you, considering the tax implications and benefits.
• Savings and Interest Income: With many moving their savings to higher-paying CDs, it’s essential to consider the impact of the resulting 1099-INT on your taxes. Fixed Annuities might be a viable alternative, offering higher interest without immediate tax implications, unless you withdraw the interest.
• Social Security Taxation: Investigate strategies to minimize taxes on your Social Security income, ensuring you’re not paying more than necessary.

Implementing Changes

After reflecting on the past year and considering your financial future, it’s crucial to take actionable steps:

• Slow Down and Reflect: Just as I observed a collective slowdown among California drivers during a storm, use this time to slow down, reflect on your financial journey, and plan for the future.
• Discuss and Plan: Engage in discussions with your family or financial advisor about potential changes or adjustments to your financial strategies.
• Take Action: Don’t delay in implementing any changes. The sooner you act, the better positioned you’ll be for the year ahead.

Personal Note

As I pen this message, returning from a trip to Newport Beach and Huntington Beach, California, I’m reminded of the importance of facing our fears, slowing down, and appreciating the journey. Despite my apprehension about flying, each trip becomes a bit easier, offering new perspectives and insights.

Embracing Change and Setting the Course for a Prosperous Future

The start of a new year is an ideal time for introspection and planning. By evaluating our past actions and setting clear intentions for the future, we can ensure that 2024 is a year of financial stability and personal growth. Take the time now to reflect, plan, and act, setting the stage for a fulfilling year ahead.

Why wait? The time to plan for a prosperous 2024 is now.