Strategy for 2023 and Beyond
While many good things came to an end in 2022 after a more than 12-year bull market in stocks and nearly 40 years in bonds, still smarting from the correction, we’d like to set the stage for the upcoming year(s) and the impact over time of the next big thing… higher taxes.
As much as we’d like to believe in miracles, and unicorns, it is almost certain that taxes will increase sooner than later. Our team is laser focused on looking ahead, and taking income planning to a higher level, by staying ahead of the inevitability of Death and Taxes.
Not a cheery start to the year, but pragmatism comes first. We’d like to propose a new moniker for Taxes, a PERMANENT REDUCTION OF CAPITAL. Avoidance strategies are full speed ahead. Our approach is to meld positive strategies within the new rules of the Secure Act 2.0 passed by Congress in December, and defensive strategies that anticipate the sundown of the TCJA (Tax Cuts and Jobs Act) set to expire on Dec. 31, 2025.
Further, the Multigenerational Planning opportunities with cost basis step-ups, funding of Roth’s for working teens and twenties, techniques to make charitable contributions tax friendly, etc. need to be addressed annually. Another major initiative is to look at the years between retirement and the forced Required Minimum distributions to avoid both needless higher tax brackets and higher cost for Medicare Part B and D, known as IRMAA.
This is a pretty long list. With, or without our counsel, it requires attention to the current rules and anticipation of future expectations. Our team, and Baird, stays up to date on legislative and regulatory changed that could impact you. We have proudly and methodically morphed into a lifetime planning resource. One that works with CPAs, attorneys, Elder Care Professionals, Social Services agencies, Medicare and Medicaid planning experts to help our clients navigate an ever more complex matrix of financial decisions as we age.
We will embark early this year with some educational materials and/or events to continue to showcase our capabilities. In short, what we’ve done in the past, our experience, our certifications and our ongoing lifelong learning has prepared us to tackle the challenges of what is now known as Tax Alpha. This is like learning a new word. Once you’ve been exposed to the phrase, you will begin to see it more frequently and see its value going forward. We are offering to help you stay ahead of the curve and partner with us to solve ever more difficult challenges ahead. We also recognize that not all of you have asked for expertise above and beyond traditional investments. We are here for you, and for your friends and family that may benefit from our forward thinking.
Best regards,
Tom Waldkirch, CFP®
Director / Senior Investment Consultant
Private Wealth Management
PS. We'd like to welcome Mary-Beth Cabell to our team as a registered Client Specialist. Take a look at her bio and roles and responsibilities over on Our Profile page. Be sure to offer her a warm welcome as she begins to reach out to you. Welcome, Mary-Beth!
Baird does not offer tax or legal advice. RB2023-0113