Though the New Year may bring with it a new opportunity to set and achieve financial goals, the thought of making sweeping changes to your budget and lifestyle may be overwhelming. What can you do to improve your odds of success in reaching the goals you’ve set? Below, we discuss three concrete steps to take to potentially make tackling your financial goals easier and more enjoyable. Prioritize Your Goals Not all goals are created equal. For example, paying off $10,000 in high-interest debt may have a far greater impact on your finances than setting aside $5 per pay period for holiday gifts. If you’re hoping to reach several financial goals this year, it may be worth spending some time deciding which of these goals is most important to you and how achieving it fits into your overall plan. On the other hand, if one goal is relatively easy to achieve when compared to the others, you may want to prioritize this goal. The satisfaction of checking it off your list may give you more motivation to tackle the tougher ones while also freeing up some extra cash to throw at these goals. Break Goals Down into Smaller Chunks As the saying goes, the only way to eat an elephant is one bite at a time. The same holds true for achieving your financial goals. When setting a lofty goal like “save $20,000 this year” or “pay off my student loans,” it may be useful to schedule weekly, biweekly, or monthly smaller goals along the way. You may want to schedule periodic increases in your retirement contribution rate, make an extra loan payment each month, or even refinance your loans or

After years of saving and planning for their golden years, many people nearing retirement fail to consider the tax burden they may face on income they receive after they stop working. While you will likely see a reduction in the amount of taxes you owe after the age of 65, you still need to plan ahead if you want to minimize your tax bill from the IRS. Social Security Benefits Depending upon your total income and marital status, a portion of your Social Security benefits may be taxable. For a rough estimate of your potential tax liability, add half of your Social Security benefits to your projected income from all other sources. This figure is your adjusted gross income (AGI), plus any tax-free interest income from municipal bonds or foreign-earned income. Up to half of Social Security benefits are taxable if this sum, which is called your provisional income, exceeds $25,000 for singles or $32,000 for married couples filing jointly. However, up to 85% of Social Security benefits are taxable if your provisional income is above $34,000 for single filers or $44,000 for married couples filing jointly. Use the Social Security Benefits Worksheet in the instructions for IRS Form 1040 to calculate the exact amount of taxes owed. Rather than writing a large check once a year, you can arrange to have taxes withheld from your Social Security benefits checks by completing Form W-4V and filing it with the Social Security Administration. Other Income Sources In addition to collecting Social Security benefits, most retirees receive their income from a variety of sources, including distributions from 401(k) accounts and individual retirement accounts (IRAs); payouts from company pensions and annuities; and earnings

Through all the challenges, newfound opportunities, and every high and low we’ve experienced during the last couple of years, it’s no surprise why we might be striving for more balance. Whether it’s about the markets and global economy or what’s happening in our local communities, the news we’re hearing on a daily basis has the potential to disrupt the balance of our lives. But with resilience, perspective, and the support of close connections, we can navigate through it all and regain our sense of equilibrium. Even after another dizzying year, as 2022 proved to be. LPL Research’s Outlook 2023: Finding Balance is our guide to how the readjustments in the economy and markets may impact you in the coming year. The disruptions may not be fully resolved and there may be more challenges to come, but progress toward finding balance is well underway. And when those disruptions hit the market, it can be hard to find our footing and stay the course. Those are the times when sound financial advice is more valuable than ever, as it helps us find our center, remember our plan, and stay focused on our goals. View the digital version: https://view.ceros.com/lpl/outlook2023/p/1     This material is for general information only and is not intended to provide specific advice or recommendations for any individual. The economic forecasts may not develop as predicted. Please read the full OUTLOOK 2023: Finding Balance publication for additional description and disclosure. This research material has been prepared by LPL Financial LLC. Tracking # 1-05345338 (Exp. 12/23)

For many investors, 2022 was a wild ride—with interest rate increases, a crypto implosion, and whipsawing values in the major market indices. It might be tough to catch one’s breath and look ahead to next year. But the beginning of the year is the perfect time to take stock of your investments, evaluating what worked, what didn’t, and what you might do better next year. Here are four key opportunities to consider that may recharge and reset your finances as you enter the new year. Review and Refresh Your Financial Plan If you set goals for the past year, evaluate your progress. Did you spend more than expected? Save less than expected? Or did you manage your goals easily—suggesting a bigger challenge may be appropriate for next year? While setting financial goals for next year, you might also consider the long-term. When do you plan to retire? What do you need to see before getting there—a specific number in your 401(k), a paid-off balance sheet, or something else? Should you stay in your home or downsize? The answers to these questions may help you formulate a more solid plan. Assess Your Retirement Readiness Are you on schedule to retire? Are you contributing enough to your 401(k) or IRA? Though the answers to those questions depend on each person’s circumstances, some patterns are emerging in savings habits among those in their 20s, 30s, 40s, 50s, and beyond. Check these numbers to see whether you are on track.1 Age 20 to 29 Average 401(k) balance of $10,500 while contributing 7% of income Age 30 to 39 Average 401(k) balance of $38,400 while contributing 8% of income Age 40 to 49 Average 401(k) balance of $93,400 while contributing

If you struggle to find a gift for the person who has everything—or want to do your holiday shopping without having to leave the house—consider giving stock as a gift. Doing so is easier than you think, and it may offer a few benefits for you as well. Here is some information on giving stock as gifts and the benefits of doing so. What Are the Benefits of Gifting Stock? When it comes to giving stock as gifts, there is one key benefit for both the giver and the recipient. 1.     Stepped-Up Cost Basis If you held a stock until it increased in value, selling it could mean paying capital gains taxes. But giving the stock to someone else means transferring these gains to the recipient, allowing them to take possession of the stock at its appreciated price.1 For example, if you purchased 100 shares of a stock and each share is now trading for more than the purchase price, cashing the stock might mean paying capital gains taxes on the amount the investment increased. If you give this stock to someone else, this person begins with a stepped-up-per-share cost basis. If they later sell the stock once it goes up more, they may only owe taxes on the profits-per-share difference. 2.     Transfer of Wealth Giving stock as gifts may also be a good way to begin passing down wealth to the next generation while minimizing your tax obligation. Cashing out stock and passing along the cash may mean paying capital gains taxes. The proceeds may also be subject to income taxes. This tax may depend on the type of account holding the stock and how long the investment was in the account.

Just as every snowflake is unique, so is every person’s retirement plan. Though there are some general strategies that can be helpful—contribute at least 10% of your salary; have at least one year’s salary saved for retirement by age 30; split contributions between pre-tax and post-tax accounts—they don’t apply equally to everyone. For many, it’s important to periodically seek advice from a financial professional to work toward being on track. With this in mind, here we discuss a few broad rules that can help you forge your own path toward retirement security. Consider Retirement Expenses If you’ve ever used an online calculator to try to assess your retirement readiness, you may wonder how these calculators can determine how much monthly or annual income you’ll need. Most of these calculators operate on a “replacement-of-income” basis—assuming you’ll need a certain percentage of your current income (usually 80%). But depending on your current income, current spending, and long-term plans, you may need substantially more (or less) income than these calculators suggest. Expenses Eliminated Leaving the workforce can mean leaving many of the following expenses behind (or significantly reducing them): Dry cleaning Commuting costs Professional or union dues Business clothing or uniforms A second vehicle Office space You may also be able to downsize your home or move to a lower cost of living area in retirement, further padding your retirement accounts. Expenses Gained Leaving the workforce can also add expenses that were previously covered by your employer. The biggest of these is health insurance. If you don’t yet qualify for Medicare when you retire, you’ll either take on your employer-paid medical premiums under COBRA (for up to 18 months) or purchase private health

A list of things to consider as you think about year-end charitable donations With its family traditions and festive celebrations, the holiday season is the most wonderful time of the year. And according to GivingTuesday.org, the giving in the U.S. alone totaled $2.7 billion to nonprofits and community organizations on #GivingTuesday in 2021, a 6% increase from 2020. Unfortunately, despite the greatest of intentions, many will inevitably make mistakes in how they give, especially if they wait until the last minute. So, here is a list of things for you to think about as you consider your year-end charitable donations. Make a Plan Ideally, at the beginning of every year – with your financial professional – you would map out a plan to maximize the tax benefits of your giving. Really think through what is important to you and what you want to support. Is it an organization that supports literacy? Or provides food? Or shelter for families? Creating a plan will help you be less reactive and feel less boxed in when friends ask for your charitable support. Research Your Charity It’s easy to get fooled by a charity’s name so you need to do your homework. And beware of scam artists pretending to represent an organization that doesn’t exist. Read a charity’s financial statements to see how they spend their (your) money. Even better, volunteer before you write a check. Donating Stock If you have owned stock for more than a year and it has appreciated, then don’t sell it first and then give the cash to charity. Those appreciated assets can be donated directly to charity without you or the charity incurring capital gains taxes (consult your

As we approach the end of the year, you may want to review areas that may impact your wealth and estate planning next year. In this year-end planning guide, we examine four critical areas to consider that may affect your finances: Generational wealth transfer- Generational wealth transfer may become more important when an event occurs, such as a death, a marriage, or the birth of a new family member. However, it’s essential to plan for generational wealth transfer by ensuring all these crucial actions have been completed: Established a Trust document- If you don’t have a trust document, your family may need to go through probate, a tedious court process to transfer your assets retroactively, which can be expensive and public. Updated beneficiary information- Consistently check the beneficiaries listed on your legal documents, retirement savings, and insurance plans, as these designations can outweigh what is in a will. Life transitions that may impact a change in beneficiaries include divorce, the birth of a new child, the loss of a loved one, a marriage, etc. Established directives- Review all legal directives such as power of attorney documents, medical care directives, and your trust document to ensure all information is up to date in case the relationship with the named individual(s) changes. Completed an inventory of assets- Periodically update inventory assets listed in your trust documents, such as real estate, collectibles, vehicles, etc., and intangible assets, such as savings accounts, life insurance policies, retirement plans, ownership in a company, and more. Drafted, reviewed, or updated a last will- It is important that your last will details your wishes regarding the distribution of your property, money, and assets that aren’t in your trust

What are appropriate checklists for year-end tax planning? Tax planners often develop checklists to guide taxpayers toward year-end strategies that might help reduce taxes. Typically, suggestions are grouped into several different categories, such as “Filing Status” or “Employee Matters,” for ease of reading. When year-end approaches, it might be wise to review each suggestion under the categories that may apply to you. Filing status and dependents If you’re married (or will be married by the end of the year), you should compare the tax liability for yourself and your spouse based on all filing statuses that you might select. Compare the results when you file jointly and when you file married separately. Determine which results in lower overall taxation. If you and several other people financially support someone but none of you individually qualifies to claim the individual as a dependent, you should consider making an agreement with all of the other parties to ensure that at least one of you can claim the individual as a dependent. Certain tax benefits may be available if you can claim an individual as a dependent. Family tax planning Determine whether you can shift income to family members who are in lower tax brackets in order to minimize overall taxes. However, under the kiddie tax rules, the unearned income of a child in excess of $2,300 (in 2022) is taxed at the parents’ tax rates. The kiddie tax rules apply to: (1) those under age 18, (2) those age 18 whose earned income doesn’t exceed one-half of their support, and (3) those age 19 to 23 who are full-time students and whose earned income doesn’t exceed one-half of their support. Consider making gifts

When it comes to medical or legal advice, the value of getting a second opinion is fairly well established and defined. What about financial decisions? At what point does it make sense to get a second (or a third) opinion on money matters? Here we discuss some benefits of seeking a second financial opinion, including a few situations in which a gut check may not just be useful but downright necessary. Many Eggs, Many Baskets As the adage goes, you never want to put all your eggs into one basket—and jumping headlong into a financial strategy recommended by one person does just that. What if their advice is outdated or does not fit your particular financial situation? What if the person providing the advice may actually be receiving a commission based on the products you select? By getting a second opinion, you will have a stronger strategy and a way to confirm that the initial advice you received was either on target or not suitable for you. Another benefit of a second financial opinion is that it can encourage you to reevaluate and reassess your goals. If your personal, employment, or financial situation has changed since the last time you reviewed your portfolio, it is an excellent time to make sure these changes are taken into account in future decisions. You may also need to reevaluate your investments or rebalance your asset allocation. Finally, by getting a second opinion, you will also have a chance to compare the costs and fees charged by different financial professionals. You may discover that you are happy to pay a higher fee for more tailored advice; on the other hand, you may decide that your financial situation does