When it comes to my personal finances, I like to do my research, set goals, create a plan, and then take action. This past month, Gold News & Views has been dedicated to these steps—ways we can examine our current portfolios, how to set goals for the new year, and actions we can take to protect our wealth in 2022 and beyond.
For this final January edition of Gold News & Views, I want to look past 2022 and into the future—specifically, to your retirement. Setting goals for the future (even the far future, depending on your situation) is just as important as setting goals for the new year, so the new year also presents a unique opportunity to give your portfolio an annual retirement checkup. Here are a few things you can do right now to examine your retirement portfolio.
With a new year comes a fresh slate for your annual employer-sponsored retirement plan.
The deadline for contributing to employer-sponsored retirement accounts like 401(k)s for the 2021 tax year was December 31, 2021. That makes now a great time to adjust your withholdings if you wish to increase or decrease how much you want to contribute for 2022. According to Forbes, the 401(k) limit for 2022 was increased from $19,500 to $20,500, with workers over the age of 50 allowed to make additional catch-up contributions totaling $6,500 for the year.
How much you contribute and whether you want to max out your accounts quickly over the course of the year—or not at all—are decisions that depend heavily on your personal goals and unique situation. Whatever you decide, the start of the year gives you the opportunity to look ahead, plan ahead, and make an educated decision with plenty of time for adjustment.
If you wish to contribute to your IRAs for the 2021 tax year, there’s still time.
Similarly, now may also be a good time to adjust how much you contribute to your individual retirement accounts (IRAs). Though the 2021 calendar year is over, you still have until April 15, 2022, to make contributions for the 2021 tax year. For 2021, the maximum contribution to an IRA is $6,000 for those under the age of 50 and $7,000 for those 50 and older.
“It’s a seed or planting that turns into a huge tree that can make a difference and will give you great shade and comfort in the years to come,” says Clark Kendall, certified financial planner and CEO of Kendall Capital, according to a CNBC article published December 30, 2021.
Now that 2021 is over, you have the perfect opportunity to examine your total earnings for 2021 and take your time deciding whether to max out your IRAs for that year. I also like to use this time to decide on any IRA contributions I may wish to make in the early part of 2022. As a big proponent of planning ahead, I appreciate this extra time to make the best decisions for myself and my portfolio.
The start of the new year may also be a good time to examine and update your retirement portfolio’s asset allocation.
As you examine your contribution options for both 2021 and 2022, you may also wish to examine where those contributions are going. Does your existing asset mix, along with any new assets you may choose to add to your retirement portfolio, reflect your unique financial situation? Or could your retirement portfolio use a bit of restructuring?
Many of these decisions will rely on your personal level of risk tolerance. For example, on January 15, 2022, The Wall Street Journal reported that “[r]ising inflation is likely to keep prices high through this year,” but also that “many are optimistic about this year.” Should you increase your holdings of time-tested inflation hedges like gold and silver if market turbulence is a possibility for 2022? Once again, how you allocate your wealth often comes down to your acceptable level of risk.
Personally, I like knowing that whatever happens or whatever I may decide, I have as many diversification options available to me as possible so I can make the best choices for my unique financial situation. This is the primary benefit that I feel a self-directed IRA can provide. With a self-directed IRA, your choice of assets is greatly expanded. You can direct your funds to be allocated in nearly any way you see fit, allowing for the greatest possible amount of control over your retirement portfolio.
For those who perform their annual retirement checkup and find themselves wishing to explore the benefits of adding physical precious metals to their retirement portfolio, know that you can count on U.S. Money Reserve to help walk you through that process.
To learn more about the benefits of adding physical precious metals to your retirement portfolio, CLICK HERE to receive a FREE digital copy of our Special Report “Protect Your Retirement with a Gold IRA.”
