Financial Planning News You Can Use- Episode 2 -Wealth, Health, and Congressional Stealth
This week’s episode highlights three topics which benefit executives and business owners: 401k Contributions, Preventing Financial Catastrophe, and Charitable Giving.
Transcript:
Hello everyone. Welcome to Episode #2 of Financial Planning News You Can Use. I’m Chuck Lewandowski CERTIFIED FINANCIAL PLANNER™ professional and I’ll be discussing timely financial planning topics that may help you reach your financial goals.
In today’s episode, I’ll talk about recent events that may affect your wealth and financial health and I’ll wrap it up with a discussion about some congressional stealth.
Let’s talk about your Wealth –
#1 – Retirement Plan Contribution Increases – It has been shown that the number one factor in growing your 401k is not investment choices but how much you contribute. The IRS announced new contribution limits for retirement plans in 2022. You can now contribute $20500 to your 401k plan. If you are age 50 or older, you can add another $6500 as a catch-up contribution. If you are a sole proprietor and have a Solo 401k account, you can contribute up to $61000 in salary deferral and profit-sharing. Once again, if you are over age 50, you can add the $6500 catch-up contribution.
Now, how about your financial health?
#2 – November is Long Term Care Awareness Month – Long Term Care insurance is designed to prevent financial catastrophe due to an ongoing health condition. Many are concerned that the cost outweighs the benefits. For high earners, this may not be true and there may be a way to pay for it without touching your cash. I have worked with several executives who had old whole life insurance policies with significant cash values, and they no longer needed that level of life insurance. We re-purposed the cash in those policies and made tax free exchanges into new hybrid life and long-term care policies.
And finally, some congressional stealth
#3 – Potential Donor Advised Fund Changes – The Wall Street Journal brought to light some ongoing discussion in Congress regarding these valuable charitable giving tools. In his November 11th column, Tom Herman wrote that Congress was discussing whether to place limitations on how long funds can remain in these vehicles.[1] If you are charitably inclined, the Donor Advised Fund may be a great way to share your abundance and achieve significant tax benefits. Investigate these tools now because Congress may make them less effective in the future.
If you want to add to your wealth using a Solo 401k, protect your financial health using long term care insurance, or pre-empt Congressional stealth by contributing to a Donor Advised Fund, please contact me and Let’s Make a Plan!
Advisory services offered through Capital Analysts or Lincoln Investment, Registered Investment Advisers. Securities offered through Lincoln Investment, Broker Dealer, Member FINRA/SIPC.www.lincolninvestment.com West Coast Financial Group, Inc. and the above firms are independent and non-affiliated. Tax advice is not offered through, nor supervised by Lincoln Investment or Capital Analysts.
[1] https://www.wsj.com/articles/pros-cons-of-donor-advised-funds-11636402901?st=fjgl4vbe18yqs7s&reflink=desktopwebshare_permalink