As 2021 comes to a close, it’s an important time to make sure your financials are buttoned up for the year. After all, there is no sense in losing out on money, paying penalties, or incurring additional taxes unless absolutely necessary. Here are some ideas to consider as we approach 2022. 

Making sure you are maxing out your retirement plan contributions is always on top of the list. Once the calendar flips you won’t be able to go back and add contributions to 401(k) and 403(b) accounts. For 2021 you can contribute up to $19,500 to your employer sponsored plan, and an additional $6,500 if you turned 50 this year. For Traditional and Roth IRA accounts you will have until April 15, 2022 to make your contributions of up to $6000 with an additional $1000 if you are over 50 this year.

It is also a good time to consider a Roth conversion. Even if you have too much income to contribute to a Roth IRA, conversions are available to everyone, no matter how much you make. For retirees who are not yet of RMD age and in a relatively low income tax bracket, it can be especially attractive. Remember, the funds you convert to a Roth grow tax-free forever, and are not subject to RMD’s (Required Minimum Distributions). This can be a powerful planning move for both you and your heirs.

Make sure to use the Money in Your Flexible Spending Account (FSA). A flexible spending account is a special tax-free account in which you can contribute money that will pay for services that your health care coverage doesn’t cover. Many employers have a “use it or lose it” policy when it comes to FSA’s, so check with your benefits department before assuming you can rollover funds into next year.

If you have a High-Deductible Health Plan then you may qualify to open a Health Savings Account (HSA). These accounts are a great way to save and they have one of the best tax treatments available from the US government. Contributions to an HSA plan are tax deductible and qualified distributions can be withdrawn tax-free. Effectively, you are able to fully deduct your medical expenses from your income. For 2021, a family can contribute $7,200, and individuals up to $3,600. Those over 50 may also add another $1,000 “catch up” contribution. You will have until April 15, 2022 to fund your HSA for 2021.

If you turned 72 during 2021 you will need to take Required Minimum Distributions from your IRA and other qualified accounts. To avoid costly penalties, you must take an RMD from the IRA’s every year before December 31. If you really don’t have a need for the funds, you can simply open an after-tax brokerage account to move the assets into so the money can remain invested. If you are charitably inclined, you can donate all or a portion of your RMD to a qualified charity and avoid paying taxes.

Donating to a worthy cause has multiple benefits. It makes you feel good inside and it also provides you with some tax benefits. You can donate cash, items, or highly appreciated assets such as stock or real estate. These donations can have some tax benefits if the charity qualifies. So make your gifts before the end of the year. Following the idea of charitable giving, consider making gifts to family members to help reduce the size of your estate. Per IRS rules, every taxpayer can gift up to $15,000 to an individual recipient in one year. There is no limit to the number of recipients you can give a gift to, but there is a lifetime exemption of $11.4 million.

Finally, find every opportunity to reduce your taxable income. If you have losses in a non-retirement account you should consider the strategy of offsetting gains for the year with losses. You can also claim up to a maximum of a $3,000 loss against income above and beyond what gains were offset with losses. By selling losing positions to realize the loss, you are reducing taxable income for the 2021 tax year.

Hopefully, these ideas incorporated into a well thought out financial plan can help bring in a prosperous new year for you and your family. Please consult a tax professional to ensure specific rules apply to your personal situation.


Click here to read more of my RetireMint articles. Follow me on Twitter or Linkedin.



This document is for educational and informational purposes only and does not constitute an advertisement or solicitation of any securities or investment services provided Mainstay Capital Management, LLC (“MCM”). This document should not be construed as investment, tax, or legal advice, or a solicitation, or a recommendation to engage in any specific strategy. MCM is an independent investment adviser registered with U.S. Securities and Exchange Commission. MCM specializes in workplace savings plan portfolio management and retirement planning advice for active employees and retirees. This document was prepared by MCM primarily based on data collected and analyzed by MCM. The opinions expressed herein are those of MCM alone and are for background purposes only. MCM does not purport the analysis to be full or complete or to constitute investment advice and should not be relied on. In addition, certain information contained herein or utilized to draw the conclusions contained herein has been provided by, or obtained from, third party sources. While MCM believes that such sources are reliable, it cannot guarantee the accuracy of any such information and does not represent that such information is accurate or complete. All materials and information are provided “as is” without any express or implied warranties by MCM. MCM charges its fee based on a percentage of assets under management, which creates an incentive and conflict of interest to increase assets in that account. Furthermore, MCM has two different fee schedules, and therefore has a conflict of interest when assets or accounts move from the lower fee schedule to the higher fee schedule. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Consult your financial professional before making any investment decision. Please see MCM’s Form ADV Part 2A and Form CRS for additional information.

Important Consumer Disclosures

Mainstay Capital Management, LLC is an investment advisor registered with the Securities and Exchange Commission. Due to various state regulations and filing requirements, Mainstay and its representatives may only provide investment advisory services in those states in which it is first appropriately registered or otherwise exempt or excluded from registration requirements. The purpose of this website is to provide the public with general information about the services offered by our investment management firm. Mainstay does not render personalized investment advice or services or effect, or attempt to effect any securities transactions, on this website. Our firm continuously monitors its filing requirements in all states, and will provide individualized advisory services only in accordance with various state regulations. Mainstay does not make any representations or warranties as to the accuracy, completeness, or relevance of any information prepared by any unaffiliated third party provider, whether linked to Mainstay's website or incorporated herein. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.


Disclosure Information - Rankings and Awards

Barron's Magazine - Top 100 Independent Wealth Advisors

According to Barron’s: The rankings are based on data provided by individual advisors and their firms. Advisor data is confirmed via regulatory databases, cross‐checks with securities firms and conversations with individual advisors. The formula Barron’s uses to rank advisors is proprietary. It has three major components: assets managed, revenue produced and quality of practice. Investment returns are not a component of the rankings because an advisor’s returns are dictated largely by the risk tolerance of clients. The quality of practice component includes an evaluation of each advisor’s regulatory record. The data is based on one fiscal year (7/1/22 - 6/30/23) and appeared in Barron’s on 9/18/23.

Schwab IMPACT Awards

The Charles Schwab & Co., Inc.’s IMPACT Awards® program recognizes excellence in the business of independent financial advice. Nominees are evaluated and selected by a panel of prominent leaders from both the business world and the financial services industry. Mainstay Capital Management does use Charles Schwab to custody certain client assets, however there was no direct compensation provided to be nominated for this award. Mainstay Capital Management received this annual award on November 15, 2017.