WisMed Financial – WisMed Assure

By Mark Ziety, CFP®, AIF®, Senior Advisor, WisMed Financial

Want to put thousands of dollars back into your pocket? Who doesn’t. Choices you make during your employer’s open enrollment period and for year-end tax planning can really add up.

Consider a married couple with $250,000 of income, two kids, a home and $100,000 in a taxable non-retirement investment account. What can they do?

Add the maximum to a health savings account (HSA) if insured by a high-deductible health plan. Otherwise, adjust the 2023 contributions to efficiently utilize a flexible spending account (FSA). Approximate tax savings are $1,750 federal plus $387 state.
Time property tax payments. With the current $10,000 cap on federal deductions for state and local taxes (SALT) through 2025, most taxpayers don’t receive a federal deduction for paying property taxes. However, on the Wisconsin tax return, a tax credit worth $300 is available for paying $2,500 in property taxes each year. If last year’s property taxes were paid in December of 2021, pay up to $2,500 of this year’s taxes by December 31, 2022 and the remainder by the due date in 2023 to save $300 in taxes.
Contribute to each child’s Edvest 529 college savings plan. The first $3,560 contributed per beneficiary for 2022 is deductible on Wisconsin income taxes for a tax savings of $377.
Realize capital losses in non-retirement investments. Tax savings could be up to $720 federal and $26 state for 2022 with additional losses banked for future tax years.
Group charitable gifts into 2022 or 2023 if itemizing deductions is possible either year. Boost the charitable tax savings by giving appreciated investments instead of cash which avoids capital gain taxes. Use a donor advised fund (charitable account) to bunch multiple years of charitable gift deductions into one tax year. Tax savings depend on individual circumstances.
Increase 403(b) or 401(k) contributions to the maximum. Approximate tax deferral is $9,840 federal and $2,173 state.
Transfer $12,000 from the taxable investment to backdoor Roth IRAs at $6,000 each. Tax savings depends on individual circumstances. For a 40-year-old couple, this annual strategy saves $96,740 in taxes through age 60.

The first four items reduce 2022 taxes by $2,910. Add in some of the longer-term strategies, and tax planning is easily worth more than $100,000 over time!

This is just part of the strategy for 2022. To receive the entire 2-page checklist for 2022, download your copy instantly.

For personalized help eliminating debt, investing smart and securing retirement, please contact Mark Ziety, CFP®, AIF® 608.442.3750.

Mark Ziety, CFP®, AIF®

WisMed Financial, Inc. part of the Wisconsin Medical Society

By Mark Ziety, CFP®, AIF®, Senior Advisor, WisMed Financial

With more than 2,700 rules and 567 separate filing strategies for Social Security, 96% of people fail to make the optimal claiming decision and miss out on $111,000 of benefits for the average household.¹

$111,000 – that’s a lot of money. Let’s look at some of the rules for Social Security so your decision is better informed.

Normal benefits: Benefits can be claimed between ages 62 and 70. The longer you wait, the larger your check. However, the increase is not linear. In fact, the growth is backloaded thereby encouraging people to delay.

change in benefit amounts from ages 62 to 70

Spousal benefits: Married people can claim a spousal benefit worth up to 50% of their spouse’s full retirement age benefit if it’s larger than their own and their spouse has started their benefit. As above, spousal benefits are reduced before full retirement age. However, they do not increase after full retirement age.
Divorced benefits: Divorced spouses can also claim a spousal benefit if the marriage lasted at least ten years and they are unmarried at the time they file for spousal benefits.
Survivor’s benefits: Spouses and surviving divorced spouses can receive the deceased spouse’s benefit starting at age 60 if the marriage was at least nine months (married) or ten years (divorced).
Withheld benefits: Benefits may be withheld if you are under full retirement age and still working. Once you reach full retirement age, the amount will be recalculated to include previously withheld amounts.
Taxable benefits: 0% to 85% of Social Security benefits may be included in taxable income. The higher your total income, the more of your Social Security you’ll owe tax on.

Optimizing Social Security also requires coordination with retirement investments, something most Social Security calculators omit. For instance, if you retire at age 65 and delay Social Security until age 70, you’ll spend your retirement investments while you wait. It may make sense to start Social Security earlier, even though the amount is less, allowing you to preserve your investment nest egg.

For many people, it’s wise to get professional help to determine the optimal timing for Social Security. Get it right and it could be worth $111,000.

The Social Security Timing Guide in our resources has even more details. Or, for one-on-one help schedule an appointment.

For personalized help eliminating debt, investing smart and securing retirement, please contact Mark Ziety, CFP®, AIF® 608.442.3750.

1. The retirement solution hiding in plain sight. InvestmentNews. (2020, June 12). Retrieved August 4, 2022, from https://www.investmentnews.com/whitepapers/the-retirement-solution-hiding-in-plain-sight