Year-End Planning Checklist for Your Wealth Management

At Withum Wealth, we believe that a large part of long-term financial success is planning ahead. This year has been a challenging year in terms of market returns, both in equities and fixed income. Year to date through September 30, the typical 60/40 portfolio was down close to 20%. While we find ourselves in bear market territory, there are actions that can be taken during these times to take advantage of the environment. For this year-end planning guide, we have included a list of actions that can be considered in this type of environment where markets are down. In addition, we include a brief article about recent guidance from the IRS regarding Inherited IRAs. We explain how the proposed IRS regulations may change required distributions starting in 2023.

Clarification on Inherited IRA Distributions

The IRS recently issued Notice 2022-53 providing guidance that it intends to issue final regulations relating to RMD rules for certain inherited IRAs. The Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) made changes to distribution rules for IRA beneficiaries. The SECURE Act maintained the ability to stretch annual distributions over the remaining life expectancy for eligible designated beneficiaries (spouses, individuals not more than ten years younger than the IRA owner, chronically ill or disabled persons and minor children) but implemented a new 10-year distribution rule for most other beneficiary types (adult children, siblings, certain trusts, etc.). This new set of rules applies to beneficiaries inheriting IRAs in 2020 and thereafter. For example, an IRA owner passed away in 2020 and designated her adult daughter as beneficiary. Under the new rules, the daughter would have to empty the inherited IRA within 10 years of the anniversary of the original IRA owner’s year of death; in this case, by December 31, 2030. At the time, the IRS indicated that annual distributions would not be mandatory as long as the account was fully emptied by the end of the tenth year. Consequently, many IRA beneficiaries subject to the 10-year rule did not take RMDs in 2021 and may not have taken any distribution so far in 2022 (RMDs were waived for everyone in 2020 due to the CARES Act).

Earlier this year, the IRS issued proposed regulations on inherited IRAs that hinted at mandating annual RMDs in years 1 through 9 with the balance being distributed in year 10 if the IRA owner died on or after his/her required beginning date. The required beginning date is April 1st of the year following the year the IRA owner turns 72 (or age 70.5 if the IRA owner turned 70.5 prior to 2020) and marks the deadline for taking the first RMD. IRS Notice 2022-53 states that RMDs for certain inherited IRAs will not begin prior to 2023. Essentially, IRA beneficiaries do not need to take an RMD in 2021 or 2022 and will not be subject to any penalties for failure to make a distribution.

Taxpayers can request a refund for any penalties already paid related to what was thought to be a missed distribution. The IRS will issue final regulations on this matter which will further clarify the rules regarding inherited IRAs. You should consult a tax advisor with any questions. Contact a member of our Withum Wealth Management Team to get started today.

2022 Year-End Tax Planning Resources

Withum’s Year-End Tax Planning Resource Center is a one-stop-shop for annual tax planning tips for individuals and businesses, legislative and regulatory changes, COVID impacts and other tax-saving opportunities.

Year-End Planning Checklist

Review Your 2022 Budget

  • Review and reassess your goals and priorities
  • Revisit your 2022 budget and prepare a budget for 2023
    • Be sure to include savings for your retirement and other goals
  • Calculate your net worth and see how it compares to your financial plan
  • Evaluate whether you have sufficient cash in your emergency fund (3-6 months’ living expenses)

Portfolio Review

  • Review your asset allocation and compare it to your targets
  • Review your capital gain situation for the year
    • Consider tax loss harvesting if you are in a high tax bracket
    • Consider realizing gains if you are in the 0% Long Term Capital Gains tax bracket

Retirement Savings

  • If you are over 72, satisfy your RMDs by December 31, 2022
    • Consider using Qualified Charitable Distributions for your charitable donations
  • Review your 2022 retirement contributions for any IRA or 401(k) accounts
    • Make sure you are deferring enough to employer plans to receive the full amount of any employer match
    • Contribute to a Roth IRA if you have earned income and your MAGI is below the income restrictions:
2022 MAGI Limits Range Starts Range Ends
Single $129,000 $144,000
Married filing jointly $204,000 $214,000
  • Increase your Roth retirement account holdings without increasing your current income tax
    • If your employer’s retirement plan allows after-tax contributions and in-plan conversions, take advantage of this strategy
    • If you have no pre-tax IRA accounts, do a backdoor Roth contribution
  • Make your 2023 employer benefit elections (see below)
    • If you will be 50 or over during the year, then you are eligible to contribute additional “catch-up” amounts
  • If you are retired and not yet taking RMDs, consider completing some Roth conversions (filling up your current tax or IRMAA bracket)
  • Review the beneficiaries for all your accounts


  • Take advantage of the $16,000 per donee annual gift exclusion in 2022 (and note it increases to $17,000 per donee in 2023)
  • Consider your gifting strategy:
    • Use qualified charitable distributions if you need to take RMDs
    • Donate appreciated stock to avoid paying capital gains tax
    • Combine several years of gifting to maximize your itemized deduction
  • Consider contributing to a 529 plan

Retirement Plan Contribution Limits

Retirement Plans 2021 2022
401(k), 403(b)-402(g)(1) – Maximum employee elective deferral $20,500 $22,500
Defined Contribution Plan Total Limit (Employee + Employer) $61,000 $66,000
Solo 401k Maximum Contribution (Employee + Employer)* $61,000 $66,000
Catch-up Contribution for the plans above (age 50 or older, above annual limit) $6,500 $7,500
IRA Contribution Limit $6,000 $6,500
IRA Catch-up Contribution (age 50 or older, above annual limit) $1,000 $1,000
Roth IRA Contribution Limit $6,000 $6,500
Roth IRA Catch-up Contribution (age 50 or older, above annual limit) $1,000 $1,000
SEP IRA Maximum Contribution $61,000 $66,000
SEP Catch-up Contribution NOT permitted NOT permitted
SIMPLE Maximum Contributions $14,000 $15,500
SIMPLE Catch-up Contribution (age 50 or older, above annual limit) $3,000 $3,500

Financial Planning During a Bear Market

“Being Patient” is not the same as “Do Nothing.”

Many of our planning strategies are particularly effective during a down market. Here is how these actions are particularly effective in these conditions:

  • Roth Conversions
    • Converting IRA stock to a Roth IRA when the market is down can allow for more shares to be transferred and growth for the future.
      • Example – converting 50 shares of AAPL at $140 is a $7,000 conversion. When AAPL was at $190, $7,000 conversion would have only allowed for 36 shares of AAPL to be moved into the Roth IRA account.
  • Tax Loss Harvesting (for taxpayers who are not in the 0% Long Term Capital Gains tax bracket)
    • Realize positions at a loss as frequently as possible. Losses can be carried forward indefinitely to offset capital gains and $3,000 of ordinary income.
      • Example – sell a position in an ETF to realize a $2,500 loss and reinvest in a similar ETF to keep a similar market exposure.
  • Maximize & Reallocate 401(k) Contributions
    • Invest more while the market is down for long-term growth
      • Example – increase contributions and consider allocating new dollars to stocks that have more growth potential for the long term.
  • Review Budget and Personal Balance Sheet
    • Reducing unnecessary spending can free up cash to save/invest while markets are discounted.
      • Example – automate savings and investments into a brokerage account and reduce discretionary spending where possible.
    • It is prudent to ensure financial stability in case economic conditions worsen
  • Review your Financial Plan
    • Reevaluating your financial plan when asset levels are depressed are a good “stress test” for the strength of your financial situation
      • Example – contact your advisor to update asset values based on lower valuations and stress test your cash flow needs in retirement on a lower asset base.

Contact Us

Reach out to our Withum Wealth Management Team for guidance as year-end approaches.

Disclaimer: No action should be taken without advice from a member of the Withum Wealth Management Team because tax law changes frequently, which can have a significant impact on this guide and your specific planning possibilities.