Don't Stop

Carolanne Chavanne, CFP®

In the Fleetwood Mac song Don't Stop, we are told, "Don't stop, thinking about tomorrow, don't stop, it'll soon be here. It'll be better than before, yesterday's gone, yesterday's gone." The wild ride that was 2022 is behind us, and the New Year holds much promise. It is a great time to look ahead, make plans, and get organized.  It’s also a good time to understand financially what tax law and government policy changes are planned and how they will impact each one of us. 

In this issue, we will examine what's new for 2023, including information that may be relevant to your own finances, as well as some updates here at Prosperity Wealth Planning. Here’s an example - a new feature we are introducing in our newsletters is a column we are calling ‘Carolanne's Corner.’ In this part of the newsletter, I will be adding my thoughts regarding selected topics (and possibly some answers to questions I get asked occasionally).  I encourage you to let me know what’s on your mind and then look for the topic in future columns. 

Carolanne’s Corner
For the first Carolanne’s Corner, I’d like to take you back to 2020 and the first edition of our newsletter. We called it The Journey, wanting to tie together concepts of financial planning with the navigation of our own lives. We mentioned how “life truly is a highway, with starts and stops, twists and turns, and, unfortunately, plenty of detours and unplanned delays.” Because I love music, it seemed appropriate to incorporate song lyrics into the introduction of each edition, visualizing the open road with your favorite tunes keeping you company. So, while the journey continues for each of us, I ask you to sit back and relax and enjoy the ride. Remember that every new year brings new things with it, and it is how we prepare for that change – the plans we make and our attitude toward that change – that makes all the difference. Here’s looking ahead to a great 2023! 

Tax Law and Government Update 

Social Security Changes  
Social Security payments are adjusted upward or downward every year through a Cost-of-Living Adjustment (COLA) based on fluctuations in the Consumer Price Index (CPI). For 2023, these payments are expected to increase by 8.7%. This means that starting in January, anyone collecting social security will see a healthy increase in their payment, reflecting the higher inflation rates we experienced in 2022.  

Retirement Plan Changes
Contribution limits to 401(k) plans will be increased for 2023. The pre-tax contribution limit will increase from $20,500 to $22,500. For those 50 and older, catch-up contributions will be $7,500, increasing the maximum pre-tax amount to $30,000 in 2023.    

If you qualify and have an individual retirement account (IRA), you will also have the ability to put more away towards your retirement. In 2023, the limit for IRA contributions has increased to $6,500, with an additional $1,000 catch-up contribution for those over 50.   

Roth IRAs, which are funded with after-tax earnings, provide tax-free withdrawals. In 2023, for single filers, the maximum earnings range to contribute to a Roth is $138,000-$153,000; for married couples, the range is now $218,000-$228,000.   

SECURE 2.0 Act  
This recently approved update to the 2019 SECURE Act brought some significant changes. Here are just a few -  

  • Raising the Age for Required Minimum Distributions 
    The original SECURE Act increased the required minimum distribution, or RMD, age to 72.  The new bill stretches that increase out further to age 73 for those born between 1951 and 1959 and to age 75 for those born in 1960 or later.
  • Auto-Enrollment in 401(k) Plans 
    Secure 2.0 mandates that 401(k) and 403(b) plans automatically enroll employees, setting a minimum default contribution rate of at least 3% but not more than 10%.
  • Catch-Up Contributions 
    The bill also increases the limits for employees ages 60-63 when it comes to making catch-up contributions from $7,500 per year to at least $11,250.  It also requires that all catch-up contributions by employees with compensation in excess of $145,000 (indexed) be subject to mandatory Roth tax treatment (after-tax), effective for post-2023 taxable years. 

New Updates at Prosperity Wealth Planning for 2023 

Client Portal 
We are excited to introduce Plaid, an account aggregation tool, to your Prosperity Wealth Planning Client Portal. Plaid allows you to add outside accounts that are not under our management. This gives you the opportunity to monitor your entire financial picture, including your 401(k), brokerage, credit cards, and bank accounts, all in one secure, easy-to-access location. Plaid also provides the added benefit of reducing the need to look for statements and balances before your next Prosperity Planning Session. Click here to access the easy step-by-step instructions.   

While you’re in the Client Portal, be sure to check out the Newsfeed to see relevant articles about financial planning topics. 

New Team Members
Prosperity Wealth Planning is expanding!  We will be adding a new planner soon and again later this year, if all goes well.  Please be on the lookout for announcements and get ready to see some new faces in your Prosperity Planning Sessions later this year. 

PWP Mobile App 
We are happy to announce that you can now access account information from your mobile devices with the PWP Mobile App. Go to either the Apple App store or Google Play to download your Client Portal - search for ‘PWP Mobile App’ and look for the PWP logo.   

Apple Store 

Google Play

Text Messaging  
Prosperity Wealth Planning will be introducing SMS/Text messaging for meeting confirmations and reminders effective immediately.  When scheduling an appointment, be sure to include your mobile number in the meeting invite to receive these updates. Note that the texting service is optional and is for reminders only. Please do not send any messages or confidential information through the texting service.  

Quarterly Market Commentary 
We will be adding financial market updates to our quarterly reports beginning in 2023. These updates come to us courtesy of Dimensional Fund Advisors.  Founded in 1981, Dimensional has a long history of applying academic research to practical investing, and we are happy to bring their market updates to you. 

PWP Marketing Updates for 2023 

  • Website
    We are excited to announce that a new look to the Prosperity Wealth Planning website will be available at the end of January. Be on the lookout for an announcement coming in the next few weeks.

  • Coffee with Carolanne
    Our popular online live webinar series is back for 2023! The next Coffee with Carolanne is coming up on February 23rd, and we will be talking about Market Statistics. Look for an invitation announcement coming soon.

  • Supercharge Your Finances
    Our video series Supercharge Your Finances (SYF) will be available twice yearly in March and September of 2023. If you are not already familiar with SYF, some of the prior episodes include Planning for the Cost of College, Common Retirement Mistakes, and  Reasons to Consider a Roth IRA Conversion. Click here to catch up on previous episodes and get ready for our next presentation on ‘Investing for Today vs. Planning for Tomorrow.’ 

TD Ameritrade / Charles Schwab Integration   
The long-anticipated merger between TD Ameritrade (TDA) and Charles Schwab is scheduled to be completed this year. Schwab has announced that Labor Day weekend will mark the official cut-over for client accounts. Prosperity Wealth Planning will monitor the progress and work closely with both companies to ensure the smoothest possible transition for our clients. We will also provide periodic updates about this merger throughout the year. Right now, the best thing you can do to prepare for the merger is to make sure you are set up for e-delivery for statements with either TDA or Schwab. If you have questions, please contact us, and we can help determine if you are set up.   

Articles of Interest  

Important Numbers for 2023. Summary of important numbers such as new tax brackets, contribution amounts, and Medicare premiums.
SECURE Act 2.0: An Overview
What Issues Should I Consider at The Start of the Year? 
Five Financial Goals for the New Year 


I hope everyone had a wonderful holiday season and that your new year's resolutions are still holding strong. Look for an announcement soon to schedule your New Year Prosperity Planning Session.  I encourage you to set up your appointment to discuss how the new laws and rules may impact your own financial future. See you soon! 



By Carolanne Chavanne, CFP®

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