Fall Planning for Your Finances

Know the moves to make before year-end to start 2023 on the right track.

As fall arrives, the changing of the season can be an ideal time to revisit your financial plans with fresh perspective. Ask yourself: What goals do you still need to tackle this year? And which ones do you want to pursue in 2023?

For your finances, there are a number of moves you can make in the final months of 2022 to help set yourself up for success in 2023 and beyond.

Revisit Your Asset Allocation

The end of the year is a good time to revisit your investment strategy and asset allocation to help ensure your portfolio is still apportioned among stocks, fixed income, cash and other asset classes in a way that fits your goals and risk tolerance. In periods of uncertainty, active management strategies, where portfolio managers aim to identify potential outperformers and manage risk, may outperform passive investment strategies that track an index. (An investment cannot be made directly in a market index.)

Plan for Your Tax Return

Whether or not you live in a state with high taxes, consider how minimizing the impact of taxation on your portfolio can help you build and sustain your wealth over time. For example, a tax-aware asset location strategy, which accounts for differences in the way different types of accounts are taxed, may help increase after-tax returns. And, for taxable accounts, a strategy known as tax-loss harvesting can help minimize taxes owed from capital gains.

If you’re not doing so already, consider fully funding your employer-sponsored retirement plan, such as a 401(k), since your contributions can be made on a pretax basis. In 2022, you can save up to $20,500 through your 401(k) plan, with up to $6,500 in additional contributions for those age 50 or older. In addition, for the 2022 tax year, you can save up to $6,000 in an individual retirement account (IRA), plus an additional $1,000 if you are age 50 or older.1

Update Your Estate Plan

Investors may want to consider periodically updating their wills and other estate planning documents. Year-end can be a good time to review the changes the past year brought to your family, as well as your overall estate plan in order to ensure it still reflects your situation and objectives.

Those planning to give financial gifts to family members should keep in mind the annual gift tax exclusion limit of $16,000 for 2022 ($32,000 for couples) and look to make those gifts before year-end. Though the federal estate tax deduction rose to $12.06 million per person in 2022, individual states often have lower exemptions. Given that, you may want to share some of your estate with your family today to help them with their own finances. Ideas you might want to consider include setting up trusts and gifting to reduce your overall estate tax liability and providing for education expenses for family members through a 529 plan or direct gift to an institution.

Consider Investing With Impact

Year-end may also be a good time to examine how well your portfolio aligns with your personal values. For investors concerned about issues such as climate change, gender equality and access to education, investing in companies that lead in environmental, social and governance best practices can help them seek to generate positive financial returns while also driving positive change on the issues they care about.

Plan Your Charitable and Holiday Giving

During the holidays, many feel the call to give back through charity. When making your gifting plans, you need to also decide whether you want to give cash, appreciated securities, or through a gift of your volunteer time.

Another option for giving back is a donor-advised fund, which provides potential tax advantages while helping you support your favorite causes. If you’re more serious about creating a more substantial structure and commitment, you might want to consider a family foundation in which you engage your family members in the philanthropy as well.

Before buying gifts for everyone on your list, consider first setting a budget for planned year-end spending, also keeping in mind any service providers and special people in your life you’d like to give holiday bonuses to.

Contact Your Financial Advisor

Talk with your Morgan Stanley Financial Advisor to discuss your year-end plans.


1 – Retirement Topics – IRA Contribution Limits


When Morgan Stanley Smith Barney LLC, its affiliates and Morgan Stanley Financial Advisors and Private Wealth Advisors (collectively, “Morgan Stanley”) provide “investment advice” regarding a retirement or welfare benefit plan account, an individual retirement account or a Coverdell education savings account (“Retirement Account”), Morgan Stanley is a “fiduciary” as those terms are defined under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and/or the Internal Revenue Code of 1986 (the “Code”), as applicable. When Morgan Stanley provides investment education, takes orders on an unsolicited basis or otherwise does not provide “investment advice”, Morgan Stanley will not be considered a “fiduciary” under ERISA and/or the Code. For more information regarding Morgan Stanley’s role with respect to a Retirement Account, please visit Tax laws are complex and subject to change. Morgan Stanley does not provide tax or legal advice. Individuals are encouraged to consult their tax and legal advisors (a) before establishing a Retirement Account, and (b) regarding any potential tax, ERISA and related consequences of any investments or other transactions made with respect to a Retirement Account.

Asset Allocation does not assure a profit or protect against loss in declining financial markets.

Investing in the market entails the risk of market volatility. The value of all types of investments may increase or decrease over varying time periods. The returns on a portfolio consisting primarily of sustainable or impact investments may be lower or higher than a portfolio that is more diversified or where decisions are based solely on investment considerations. Because sustainability and impact criteria exclude some investments, investors may not be able to take advantage of the same opportunities or market trends as investors that do not use such criteria.

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Investors should carefully read the Program Disclosure statement, which contains more information on investment options, risk factors, fees and expenses, and possible tax consequences before purchasing a 529 plan. You can obtain a copy of the Program Disclosure Statement from the 529 plan sponsor or your Financial Advisor.

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