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Even with plentiful free checking options, some consumers are still paying fees, a new Bankrate.com survey finds.
Here’s how much you stand to lose and steps you can take to save.

Even with broad availability of free checking services, more than a quarter of checking account holders — 27% — are paying fees every month.
For consumers who aren’t taking advantage of free checking, those fees add up to an average of $24 per month, or $288 per year, according to a new survey from Bankrate.com. The personal finance site conducted its online survey Dec. 7-12 and included 3,657 adults, of whom 3,069 have a checking account.

The charges come from routine services or ATM and overdraft fees, the research finds. The average overdraft fee costs $29.80, Bankrate’s research has found, while the average nonsufficient funds fee is $26.58.
The annual sums may not sound like a lot, said Sarah Foster, analyst at Bankrate.com, but can add up to a hefty $5,000 if you stick with your checking account for 17 years, as the average consumer tends to do.
Nixing bank fees is an easy way to free up a little more money in your budget, especially amid high inflation and with expectations of a recession on the rise. Paying those extra costs may weaken consumers’ budgets and make them more vulnerable if a downturn does happen.
“It’s just an important and really an easy way to make sure you’re not spending more money than you have to,” Foster said.
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Which generations spend the most on checking fees

Younger people are most susceptible to paying fees, Bankrate.com’s survey found.
Gen Z, who range in age from 18 to 26, comes in at the top of the list, with 46% of that generation’s checking account holders paying monthly fees. That cohort pays about $25 per month, Bankrate.com found.
Millennials, who are ages 27 to 42, come in next, with 42% of account holders paying monthly checking fees, Bankrate.com found. They typically pay the most compared with other generations, at $28 per month, the study found.
Older cohorts — Gen Xers, who are between 43 and 58, and baby boomers, ages 59 to 77 — are less likely to pay checking account fees. That includes just 22% of Gen X and 14% of baby boomer checking account holders, who pay $17 and $22 per month, respectively.
More than half of Gen Z — 56% — and millennial — 52% — account holders say they are sacrificing recession preparedness due to the monthly fees they pay. In comparison, 46% of Gen X and 35% of baby boomers said the same.
The monthly fees are setting consumers back on goals including paying down debt, saving for emergencies or for major goals such as buying a house or car or paying for college, or setting money aside for retirement, the survey found.

Gauge the true cost of your checking account

To know what you’re truly paying for your checking account, you should keep tabs on your statements at least monthly, according to Bruce McClary, senior vice president at the National Foundation for Credit Counseling.
Start with the basics — looking at your transactions to make sure they’re accurate, he said. Then evaluate your transactions and withdrawals and any account maintenance fees that come up.
If you feel that you’re being charged in error, that should prompt a conversation with your bank, McClary said.
Keep in mind there may be adjustments your bank or credit union may be willing to make. If you let your financial institution know about your personal situation, they may be willing to forgive certain fees, particularly a first-time charge, Foster said.
“There’s no guarantee it will work, but it just never hurts to reach out,” Foster said.

‘Shop around for opportunities’

Also evaluate whether there are fees you can avoid, such as by eliminating out-of-network ATM withdrawals or by maintaining a required minimum balance.
Where you can, try to find free savings and checking services, McClary said.
“Shop around for opportunities,” McClary said. “If your bank or credit union isn’t offering them, this could be an opportunity to move your business elsewhere where it might be more affordable.”
Opening a new account at another institution may seem arduous, particularly if it requires an in-office visit and physically moving cash, Foster said. But the savings over time may more than make up for the hassle.
“While switching a bank can be a pretty annoying step, it can help you build wealth in the long run if it means not paying for a service that you can get for free elsewhere,” Foster said.
And if you find you’re not happy with your new account, you can always move your money somewhere else, she said.

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In the new student loan repayment proposal rolled out by the Biden administration, certain borrowers could see their monthly payments drop significantly.
Some borrowers will have $0 monthly payments.

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In the new student loan repayment plan proposal rolled out Jan. 10 by the Biden administration, more borrowers could see their monthly payments drop to $0.
The new option revises one of the four existing income-driven repayment plans, which cap borrowers’ bills at a share of their discretionary income with the aim of making the debt more affordable to pay off.

Instead of paying 10% of their discretionary income a month, under the proposal, the Revised Pay As You Earn Repayment Plan, or REPAYE, borrowers would be required to pay 5% of their discretionary income toward their undergraduate student loans.
The new REPAYE plan could officially be available July 1, 2024, according to higher education expert Mark Kantrowitz. That estimate accounts for a 30-day public comment period on the proposed regulation and then a window before new rules can go into effect. But some parts of the plan could be implemented sooner, he said.
Here’s what borrowers need to know.

More people will have $0 payments

Under the current REPAYE plan, discretionary income is calculated as money earned over 150% of the federal poverty guideline. And so, single borrowers begin to make payments based on income over roughly $21,900, based on 2023 guidelines, said Kantrowitz.
Under the new plan, borrowers wouldn’t need to make payments based on income earned until it hit 225% of the federal poverty guideline, or about $32,800, Kantrowitz said.

He provided an example of how monthly bills could change with the overhauled option.
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Previously, a borrower who made $40,000 a year would have a monthly student loan payment of around $151. Under the revised plan, their payment would drop to $30.
Someone who earned $90,000 a year, meanwhile, could see their monthly payments shrink to $238 from $568, Kantrowitz calculated.
Those who earn under around $32,800 will have $0 monthly payments.

Undergraduate borrowers benefit most from the change

The new option should be available to borrowers with undergraduate and graduate student loans, although undergraduate borrowers will have lower payments.
Those with Parent Plus loans won’t be eligible to enroll in the overhauled plan.

Defaulted loans are typically ineligible for income-driven repayment plans.
Yet under the new proposal, those who have fallen behind may be able to sign up for the income-based repayment plan, another one of the income-driven repayment plan options.

Borrowers will need to enroll

Once the new REPAYE plan is available, borrowers can call their student loan servicer to enroll in the option, or apply at StudentAid.gov.
“Any new plan will likely take quite some time to implement, so borrowers will have plenty of time to learn about how it might work,” said Scott Buchanan, executive director of the Student Loan Servicing Alliance, a trade group for federal student loan servicers.

There’s a 10- or 20-year payment timeline

After 20 years of payments on undergraduate student loans, any leftover debt is forgiven on the current REPAYE plan. The revised option preserves that timeline.
Plus, under the Biden administration’s proposal, those with original student loan balances of $12,000 or less may get their loans forgiven after just 10 years.

Forgiven student debt may come with a tax bill

It’s unclear whether debt forgiven at the end of the repayment timelines will be taxable at the federal level.
Debt forgiveness used to trigger a tax bill under income-driven repayment plans. But a recent law ended that policy until at least 2025, and experts expect it to become permanent.
It’s also possible that some states will consider the forgiven debt taxable.

What’s going on with the payment plan pause?

The pandemic-era relief policy suspending federal student loan bills and the accrual of interest has been in effect since March 2020. 
For now, the Education Department is leaving things a little open-ended when it comes to the timing of payments resuming.

It has said the bills will be due again only 60 days after the litigation over its student loan forgiveness plan resolves and it’s able to start wiping out the debt.
If the Biden administration is still defending its policy in the courts by the end of June, or if it’s unable to move forward with forgiving student debt by then, the payments will pick up at the end of August, it has said.
The Supreme Court will start hearing arguments on legal challenges to the plan Feb. 28.

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Whether they’re leaving due to layoffs or in search of greener pastures, there’s a good chance some departing workers will be leaving a 401(k) behind.
While you generally have three options for handling an old 401(k), some are better than others, experts say.
Here are the rules to know if you’re leaving your job and were participating in a 401(k).

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Whether you’re leaving your job by choice or not, don’t forget about your 401(k) plan.
As workers continue quitting their jobs at an elevated rate and some companies embark on layoffs — including Amazon, Salesforce and Goldman Sachs — there’s a good chance some departing workers will be leaving an employer-sponsored retirement plan behind.

While not everyone has a 401(k) or similar workplace retirement plan, those who do may want to be familiar with what happens to their account when they leave a job and what the options are — and aren’t.

You have three basic choices for an old 401(k)

Broadly speaking, you have several options for your old 401(k). You may be able to leave it where it is, roll it into your new workplace plan or an individual retirement account, or cash it out — although experts generally caution against the third move.
Cashing out “is the least desirable option,” said Eric Amzalag, a certified financial planner and owner of Peak Financial Planning in Canoga Park, California.
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For starters, he said, you’d face paying taxes on the distribution — unless it’s post-tax money you put in a Roth 401(k). With some exceptions, you’ll typically also pay a 10% tax penalty if you’re younger than age 59½, which is when withdrawals from 401(k)s and other retirement accounts can begin.

“If the account size is large, it could push the individual into a high tax bracket, causing the funds to be taxed at a higher and disadvantageous rate,” Amzalag said.

Keep track of money left in a former employer’s 401(k)

Perhaps the easiest thing you can do is leave your retirement savings in your former employer’s plan, if it’s permitted. Of course, you can no longer contribute to the plan. Nor will you be able to take a loan from that account as you can when you’re an active employee in the 401(k).
However, while this might be the easiest immediate choice if it’s available, it could lead to more work in the future.
Basically, finding old 401(k) accounts can be tricky if you lose track of them. While congressional legislation known as Secure 2.0, enacted in December, includes a provision for a retirement account “lost and found,” the Labor Department gets two years to create it. Some large 401(k) plan administrators — Fidelity Investments, Vanguard Group and Alight Solutions — also have teamed up to offer their own lost and found.

Also be aware that if your account is small enough, you may not be able to keep it at your ex-employer even if you want to.
If the balance is between $1,000 and $5,000, your ex-employer can roll over the amount to an IRA. (Secure 2.0 changed that upper limit to $7,000, effective for distributions made after 2023.)
If the balance is less than $1,000, the plan can cash you out — which can lead to a tax bill and an early-withdrawal penalty.

Consider a rollover to a new workplace plan or an IRA

Another option is to transfer the balance to another qualified retirement plan, such as the 401(k) at your new employer, assuming the plan allows it.
“The main advantage of this option is consolidation of your accounts and less to keep track of,” said CFP  Justin Rucci, an advisor with Warren Street Wealth Advisors in Tustin, California.
You also could roll it over to an IRA, which may provide more investment choices — but also may come with higher fees, which can eat away at your nest egg.

Be aware that if you have a Roth 401(k), it can only be transferred to another Roth account. This type of 401(k) and IRA involves after-tax contributions, which means you don’t get a tax break up front as you do with traditional 401(k) plans and IRAs.
However, the Roth money grows tax-free and is untaxed when you make qualified withdrawals down the road.

Watch out for 401(k) ‘exit costs’

No matter what you choose to do with your old workplace retirement account, be aware of some of the potential “exit costs” related to it.
For example, while any money you put in your 401(k) is always yours, the same can’t be said of employer contributions.
Vesting schedules — the length of time you must stay at a company for its matching contributions to be 100% yours — range from immediately to up to six years. Any unvested amounts generally are forfeited when you leave your company.

Also, if you have taken a loan from your 401(k) and haven’t repaid it when you leave your company, there’s a good chance your plan will require you to repay the remaining balance fairly quickly. Otherwise, your account balance will be reduced by the amount owed — called a “loan offset” — and considered a distribution.
In simple terms, unless you are able to come up with that amount and put it in a qualifying retirement account by the following year’s tax-return deadline, it is considered a distribution that may be taxable. And, if you are under age 59½ when you leave the job, you may pay a 10% early-withdrawal penalty.
About a third of employer plans allow former employees to continue paying the loan after they leave the company, according to Vanguard. This makes it worthwhile to check your plan’s policy.

There may be reasons to avoid an IRA rollover

It’s worth talking to a financial advisor before moving your old 401(k). In addition to portfolio considerations such as investment choices and fees, there may be planning consequences.
For example, there’s something called the Rule of 55: If you leave your job in or after the year you turn age 55, you can take penalty-free distributions from your current 401(k). If you move the money to an IRA, you generally lose the ability to tap the money before age 59½ without paying a penalty.
Additionally, if you are the spouse of someone who plans to roll over their 401(k) balance to an IRA, be aware that you would lose the right to be the sole heir to that money. With the workplace plan, the beneficiary must be you, the spouse, unless you sign a waiver allowing it to be someone else.
Once the money lands in the rollover IRA, the account owner can name anyone a beneficiary without their spouse’s consent.

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The new year could bring more economic uncertainty and market volatility, but there are still plenty ways to shield yourself from potential headwinds, advisors say. 
Here are a few of the strategies they are using to steer their clients through the ups and downs.

By most measures, the new year is off to a good start. However, economists and business leaders alike predict there are rougher times ahead for the market and the economy.
Year to date, the S&P 500 and Dow Jones Industrial Average have advanced about 4% and more than 2%, respectively, while the Nasdaq Composite is up 5.9%.

Yet inflation remains a persistent problem. The consumer price index for December showed prices cooled 0.1% from the month before but were still 6.5% higher than a year ago.
“The easing of inflation pressures is evident, but this doesn’t mean the Federal Reserve’s job is done,” said Bankrate.com’s chief financial analyst, Greg McBride. “There is still a long way to go to get to 2% inflation.”
Even as the Fed’s battle with inflation is leading to success, it will come at the price of a hard landing for the economy, according to a survey of chief financial officers conducted by CNBC. Economists have been forecasting a recession for months, and most see it starting in the early part of the year.
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To make the best of the current climate, advisors recommend a few key money moves in the year ahead.

Here are their top four strategies to shield yourself from stock market volatility, rising interest rates and geopolitical risk — not to mention fears of an impending recession.  

1. Pay down high-interest debt

“This is a great time to pay down some of those higher interest loans outstanding,” said David Peters, a financial advisor and certified public accountant at CFO Capital Management in Richmond, Virginia.
Credit card rates, in particular, are now more than 19%, on average — an all-time high. Those annual percentage rates will keep climbing, too, as the Fed continues raising its benchmark rate.
“For so long we’ve been pretty spoiled in the markets,” Peters said. In some cases, it used to make financial sense to tap cheap credit for a larger purchase, rather than withdrawing money from a savings or investment account. Now, “we need to reverse our way of thinking.”
Consider this: “If you have a loan with an interest rate of 6% and you pay the principal down on the loan, it is almost the same as getting a 6% return on your money in the markets,” he said.
If you currently have credit card debt, “grab one of the zero-percent or low-rate balance transfer offers,” McBride advised. Cards offering 15, 18 and even 21 months with no interest on transferred balances are still widely available, he said.

2. Put your cash to work

Once you’ve paid down debt, Peters recommends setting some money aside in a separate savings account for emergency expenses.
“Online savings accounts can be a way to earn money in times when other investments may not be returning well,” he said.
However, although some of the top-yielding online high-yield savings accounts are now paying more than 3.6%, according to DepositAccounts.com, even that won’t keep up with the rising cost of living.
Ted Jenkin, CEO at Atlanta-based Oxygen Financial and a member of CNBC’s Advisor Council, recommends buying short-term, relatively risk-free Treasury bonds and laddering them to ensure you earn the best rates, a strategy that entails holding bonds to the end of their term.
“It’s not a huge return but you are not going to lose your money,” he said.
Another option is to purchase federal I bonds, which are inflation-protected and nearly risk-free assets.
I bonds are currently paying 6.89% annual interest on new purchases through April, down from the 9.62% yearly rate offered from May through October 2022.
The downside is that you can’t redeem I bonds for one year, and you’ll pay the last three months of interest if cashed in before five years.

3. Boost retirement contributions

Once you’ve paid down high-interest credit card debt and set some money aside, “putting more into your retirement accounts right now can be a great move,” Peters said. 
You can defer $22,500 into your 401(k) for 2023, up from the $20,500 limit in 2022. The new provisions in “Secure 2.0” will further expand retirement plan access and open up more opportunities to save going forward, Peters said, including making it easier for employers to make contributions to 401(k) plans on behalf of employees paying down student debt.
Even if you’re balancing contributions with short-term goals, you should still contribute enough to take full advantage of company matches, he added, which is like getting an additional return on your investment.

4. Buy the dip

“Investors willing to take on additional risk might consider ‘buying the dip’ by looking at sectors that took an especially hard it and could now be undervalued,” said certified financial planner Bryan Kuderna, founder of the Kuderna Financial Team in Shrewsbury, New Jersey, and the author of the upcoming book, “What Should I Do with My Money?”
“Tech took it on the chin, Amazon lost half their market cap, if there was too much of a pullback there may be opportunity,” he said.
Kuderna recommends dollar-cost averaging, which helps smooth out price fluctuations in the market. Investing in set intervals over time can also help you avoid emotional investing decisions.
However, a long-term horizon is critical to this type of approach, Kuderna added, which means being prepared to leave that money alone.
“The overall advice I have is don’t watch the market too closely, that’s when people start to get emotional and that’s when mistakes happen.”
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Longevity can have a greater impact on how long retirement money lasts than today’s record high inflation, according to a new report.
Surya Kolluri, head of the TIAA Institute, recommends a three-pronged approach to savings combining Social Security benefits, a guaranteed lifetime income product and investments.
There are several key age benchmarks after 50 to be aware of in retirement planning.

Given today’s ongoing high inflation, many Americans worry they may not have put away enough money for retirement. They fear that sharp increases in food and energy prices and transportation and medical care costs could significantly affect their retirement savings.
Yet there’s another important factor to consider: your life expectancy.

A new report from the TIAA Institute and George Washington University reveals that more than half of American adults don’t know how long people generally tend to live in retirement, which given their possible longevity could have them failing to save enough money to last as long as they themselves do. 

‘Longevity literacy’ needed in retirement planning

Studies have shown financial literacy among women consistently lags that of men, yet the report found the “longevity literacy” of women is greater than men, with 43% of women demonstrating strong longevity knowledge, compared to 32% of men. 
It’s a “striking result,” said George Washington University economist Annamaria Lusardi, director of the school’s Global Financial Literacy Excellence Center. “We might actually need to provide help to women, because they are aware, for example, of the fact that they live long but they might not know about how to deal with their living long.”
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In consequence, greater education about retirement planning will be especially important for women, she said.

On average, American men and women retire in their mid-60s. Yet many of them may not realize that at age 60, on average, men may live another 22 years and women could live 25 years longer, according to the Social Security Administration’s calculations. 
To make your retirement money last, it is important to use a three-pronged approach, said Surya Kolluri, head of the TIAA Institute. “Some combination of Social Security, a guaranteed lifetime income [product], and then investments on top of that” might be a good way to hedge the risk of inflation and rocky financial markets, he said. 

Inflation adjustments up 401(k), IRA contribution limits

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Inflation adjustments for 2023 have also increased the amount of money that you can save in retirement accounts. This year, you can put up to $22,500 in a traditional or Roth 401(k), plus a $7,500 “catch-up” contribution if you’re 50 or older for a total of $30,000.
You can also put up to $6,500 in a traditional or Roth IRA. With a $1,000 catch-up contribution, you could save a total of $7,500 if you’re 50 or older. 

Here are the key ages in retirement planning

As you near retirement, or if you’re already retired, there are key milestones to keep in mind for accumulating and withdrawing the money you’ll need for your later years. Considering you may live into your mid-80s, here are some other important ages to keep in mind:  

At 50, you can add even more money to your retirement accounts.
At age 59½, you can start to make withdrawal money in IRAs and 401(k) plans. If you take it out earlier, you’ll likely pay a 10% tax penalty.
Between 62 and 70, you can claim Social Security benefits — but if you start taking it at 62 you’ll get 30% less than you would at your full retirement age (which varies depending on the year of your birth). On the other hand, you’ll see an 8% annual increase in your benefit for every year after your full retirement age that you wait to claim your benefits, up to age 70.
At age 65, you should apply for Medicare — or you may have to pay a penalty if you’re not covered by another health plan.
And, turning 73 has become a very important birthday. As of Jan. 1, a new law requires you to start making withdrawals — or taking “required minimum distributions” from IRAs and 401(k)s — by April 1 after the year you reach age 73. The age for taking RMDs will increase to 75 in 2033.

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No one knows what will happen with markets in 2023. That uncertainty can feel out of control, but there are things you can control and steps you can take.
Assess where your investment portfolio, liquid cash flow and retirement savings stand.
Consider tax-efficient charitable giving and take investment concerns to a fiduciary financial advisor.

Hillary Kladke | Moment | Getty Images

Before looking forward to 2023, we should pause to reflect on 2022.
The following quote from Jason Zweig of The Wall Street Journal sums up this very difficult year for investors: “Investing isn’t an IQ test; it’s a test of character.” Indeed, the most successful investor is not necessarily the smartest person in the room but the one with the most patience and self-discipline.

Our investing character was certainly tested throughout 2022. It was a dismal year for investing, with both stocks and bonds down — by 19% and 13%, respectively. The result was one of the worst years in history for the traditional balanced portfolio of 60% stocks and 40% bonds, which lost nearly 17% for the year.
Looking forward to 2023, the team here at Francis Financial reviewed several outlooks from major Wall Street firms, including JPMorgan, Goldman Sachs, Barclays and others, to help answer the question of what to expect in the next year.
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As you might expect, there is a wide array of estimates for what markets may look like in 2023, but there seemed to be consensus on a few key items:

With the U.S. Federal Reserve raising rates as aggressively as they have, most expect a minor recession for the country’s economy.
Earnings results for companies are likely to come down more than analysts currently estimate.
Inflation will continue to decline, allowing the Fed to slow and ultimately stop further rate increases around the 5% level.

The current economic uncertainty is leading to substantial variability in market forecasts, with firms estimating stock returns will be anywhere from flat to up 10% by the end of the year. The only agreement is that getting there will be a bumpy ride, with many ups and downs.

However, there is more optimism with the bond markets, with intermediate-term bond yields now above 5%, providing hope that we will see a much stronger 2023 on the bond side.
Rest assured, that outlook is about as solid as your holiday Jell-O salad.
Market forecasts are an interesting exercise in learning about potential future outcomes. As Yogi Berra once said, “It’s tough to make predictions, especially about the future.”

Regardless of how certain the prognosticators sound or how much logic they cite to support their predictions, they will be wrong. Until we build the DeLorean from “Back to the Future,” no one knows what will happen with markets in 2023. That uncertainty can feel out of control, but there are things you can control and steps you can take to make sure you are ready for whatever 2023 may bring.

1. Assess where your portfolio stands

An annual check-in with your financial advisor about your portfolio is a good practice, mainly because our lives change. As we age or as life circumstances evolve, we should reevaluate our risk tolerance. Taking stock of the previous year’s happenings is key. For example, a new child, a new job or a change in retirement plans may necessitate a change in your investment strategy.
It’s also essential to analyze the portfolio from a tax-efficiency perspective. Over the coming months, investors will be reminded how important a tax-efficient investment strategy is for their portfolio.
Investors will start receiving 1099 forms tallying taxes due to the IRS for investment income and capital gains in 2022. Holding your investments in the most tax-appropriate type of account can enhance your savings plans by helping to reduce or even eliminate taxes.
Taxable accounts, such as brokerage accounts, are best for investments that produce less in taxable gains or income. Candidates include tax-managed or index mutual funds and exchange-traded funds. Brokerage accounts are also a good home for municipal bonds.
Tax-advantaged accounts, such as individual retirement accounts and 401(k) plans, are best for investments that produce significant taxable returns. Candidates include actively managed mutual funds and ETFs. Retirement accounts are also a good home for taxable bonds and real estate investment trusts. 

2. Conduct a cash-flow review

Thianchai Sitthikongsak | Moment | Getty Images

Tracking your spending and savings is one of the most important steps to building a sound financial plan. Be sure to review your projected saving and spending targets for 2023. An excellent place to start is by revisiting where your money went in 2022.
Most credit cards will send you a year-end credit card expense report with your total spending for this last year neatly categorized for you. These reports typically arrive in mid-January, but you can often log into your account online to get your report sooner.
Search your credit card spending summary for saving opportunities. Are you being charged for monthly subscriptions you no longer use? Can you uncover other potential money leaks, such as excessive restaurant or take-out charges, taxi or rideshare costs, and impulse and unplanned purchases? Sometimes we spend mindlessly, and over time, this can make a big dent in our wallets.
Once you have plugged any holes in your budget, turn to your emergency fund. Building your emergency fund is the most important investment in keeping your budget on track. The general advice is to have enough saved in this fund that you can pay all expenses for three to six months. A well-cushioned emergency fund is the best defense against unexpected costs that can leave you financially vulnerable.
At my firm, we recommend accumulating six months of expenses, particularly if you have one source of income, income that fluctuates or less job security than is ideal. If your expenditures increased this year, because you took on a larger mortgage or for some other reason, reassess to determine whether you still have an appropriate emergency fund.
The best way to make that assessment is through careful budgeting and monitoring of expenditures. If you are struggling to build that emergency fund, you may need to take a hard look at some of your other discretionary expenses and consider eliminating them until you reach the target fund balance.

3. Make sure you’re saving enough to meet your goals

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Knowing if you are contributing enough to retirement accounts is crucial.  One rule of thumb for a starting point is the 4% withdrawal rule. This formula states that in retirement, you can withdraw up to 4% of your final account balance sustainably. Sticking to this withdrawal rate gives you a high probability of not outliving your money during a 30-year retirement.
For example, if you accumulate $1 million, you can withdraw about $40,000 for your first year of retirement. If the balance is $975,000 on the second year, you can only safely take out $39,000. Financial advisors recommend having extra cash on hand to dip into for those times when your investment portfolio does not grow enough from capital gains, dividends and interest income to make up for the previous year’s distribution, therefore reducing the amount you can take out the year after.
Once you have your financial goals identified, use all the tax-advantaged accounts available to you. Retirement plans, educational savings 529 plans and health savings accounts can help you minimize taxes and efficiently save for the future. Contribution limits increased for all three of these savings vehicles this year, as well.
For 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan, the 2023 contribution limit will increase to $22,500, up from $20,500 for 2022. The catch-up contribution limit for employees ages 50 and over increased to $7,500, up from $6,500. Sometimes companies change or add to their retirement plan investment options, so review those to ensure you are invested in the most solid investment choices available.
While the IRS does not levy federal contribution limits on 529 plans, most parents contribute only up to the annual gift tax exclusion so as not to incur gift taxes. The annual gift tax exemption for 2023 rose to $17,000, up from $16,000 in 2022.
Know that friends and family members can also get in on the action by contributing to your kids’ 529 plans. Even better, these contributions do not eat into your annual gift tax exclusion or ability to fund the 529 educational plan.

Savvy college savers also have the option to super-fund a 529 plan. Super-funding lets you invest a lump sum contribution equal to five times the annual gift tax exclusion. This contribution is treated as if it occurs over a five-year period for gift tax purposes.
If parents are flush with cash in 2023 and want to make significant headway saving for college, each parent can contribute $85,000 (5 x $17,000) per child. If both parents use their super-funding option, they can double the contribution to $170,000 per child in 2023.
If you have a high-deductible insurance plan, HSAs allow you to save pretax dollars for medical care now and in retirement. The HSA contribution limits for 2023 rose to $3,850 for an individual and $7,750 for a family, up from the 2022 limits of $3,650 and $7,300, respectively. Those 55 and older can contribute an additional $1,000 as a catch-up contribution, as well.
One of the easiest ways to increase your retirement, education or HSA contributions is when you receive a raise. Rather than adjusting to spending the extra income, boost your contributions to increase your savings painlessly.
According to Willis Towers Watson, the average U.S. pay increase is projected to hit 4.6% in 2023. Employers are paying more due to high inflation and tight labor markets, which gives you an effortless opportunity to bump up your savings.

4. Consider charitable giving

Once you have met your savings goals, you may want to give to charitable organizations. Giving to charities should also be given attention to ensure you have a thoughtful plan of how, when and what to give. After all, everyone wins if you can maximize those gifts simply by being tax-efficient.
Instead of writing a check to a charity, look into donating highly appreciated stocks directly to the charitable organization. Alternatively, you can set up a donor-advised fund, which will allow you to donate stocks, bonds and cash to an account that can be invested and grow over time.
An added benefit is that you will receive an immediate tax deduction for any money added to the account without the pressure to immediately give all the money away. You can recommend grants from the DAF over time, and donating is extremely easy.

5. Share other concerns with an advisor

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What other concerns do you have? Whether it’s concerns about inflation, high-interest rates, recession fears or something more personal, it never hurts to share those with your financial advisor.
The good thing about a test of our financial character is that we can always learn from it and improve. We can become better investors, which will positively impact our portfolios regardless of market conditions.
Successful investing does require strong character, including patience with the markets, self-discipline in attention to your portfolio and sound judgment. Know that you do not have to do this alone and your financial advisor is there to help.
If you do not currently have a financial expert on your team, you can find a fee-only, fiduciary financial advisor that perfectly meets your needs at www.NAPFA.org.

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Nearly 15.9 million people have signed up for health coverage through the exchange during open enrollment, which started Nov. 1, according to the Centers for Medicare & Medicaid Services.
Most people who get health insurance this way qualify for tax credits that reduce the cost of premiums.
Open enrollment for the federal exchange ends Jan. 15, although if your state has its own marketplace, it may have a later deadline.

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If you don’t have health insurance for 2023, you may still be able to get it through the public marketplace.
Open enrollment for the federal health-care exchange ends Sunday, with coverage taking effect Feb. 1. If your state operates its own exchange, you may have more time.

Most marketplace enrollees — 13 million of 14.5 million in 2022 — qualify for federal subsidies (technically tax credits) to help pay premiums. Some people may also be eligible for help with cost sharing, such as deductibles and copays on certain plans, depending on their income.
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So far, nearly 15.9 million people have signed up through the exchange during this open enrollment, which started Nov. 1. Four out of 5 customers can find 2023 plans for $10 or less per month after accounting for those tax credits, according to the Centers for Medicare & Medicaid Services.
After the sign-up window closes, you’d generally need to experience a qualifying life event — i.e., birth of a child or marriage — to be given a special enrollment period.
For the most part, people who get insurance through the federal (or their state’s) exchange are self-employed or don’t have access to workplace insurance, or they don’t qualify for Medicare or Medicaid.

The subsidies are still more generous than before the pandemic. Temporarily expanded subsidies that were put in place for 2021 and 2022 were extended through 2025 in the Inflation Reduction Act, which became law in August.
This means there is no income cap to qualify for subsidies, and the amount anyone pays for premiums is limited to 8.5% of their income as calculated by the exchange. Before the changes, the aid was generally only available to households with income from 100% to 400% of the federal poverty level.
The marketplace subsidies that you’re eligible for are based on factors that include income, age and the second-lowest-cost “silver” plan in your geographic area (which may or may not be the plan you enroll in).

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While some of the state programs are voluntary, others require companies to either have their own 401(k) plan or facilitate automatically enrolling employees in a Roth IRA through the state’s option.
Of these so-called auto-IRA programs that are up and running, workers have saved more than $630 million.
Some employers are choosing to offer a 401(k) plan instead of participating in their state’s program.

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Whether you have access to a retirement plan through work increasingly depends, at least partly, on where you live.
Within the last decade, 16 state legislatures have adopted retirement-savings programs targeting workers whose employers don’t offer a 401(k) plan or similar option. Some programs are up and running, while others are in the planning stages. 

Some also are voluntary for businesses to participate in. But most require companies to either offer their own 401(k) or facilitate automatically enrolling their workers — who can opt out — in individual retirement accounts through the state’s so-called auto-IRA program.
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“On average, we’ve seen one to two new state programs enacted each year and expect that trend to continue in 2023,” said Angela Antonelli, executive director of Georgetown University’s Center for Retirement Initiatives.
“We should see program assets soon exceed $1 billion, and more than 1 million saver accounts soon in 2023, and then more rapidly continue to grow as other states open,” Antonelli said.

Here’s what’s in the pipeline

Last year, Maryland and Connecticut launched their auto-IRA programs, joining Oregon, California and Illinois. Colorado and Virginia are expected to do so this year. Others — including Delaware, New Jersey and New York — are still in the planning phases.

Overall, 46 states have taken action since 2012 to either implement a program for uncovered workers, consider legislation to launch one or study their options, according to Antonelli’s organization. 

Although there are some differences in the programs, they generally involve auto-enrolling workers in a Roth IRA through a payroll deduction starting around 3% or 5%, unless the worker opts out (about 28% to 30% do so, Antonelli said). There is no cost to employers, and the accounts are managed by an investment company.
Contributions to Roth accounts are not tax-deductible, as they are with 401(k) plans or similar workplace options. Traditional IRAs, whose contributions may be tax deductible, are an alternative in some states, depending on the specifics of the program.
Among the current auto-IRA programs, workers have amassed more than $630 million among 610,000 accounts through 138,000 employers, according to the center.

About 57 million lack access to a workplace plan

Of course, there’s still a long way to go to reach all of the estimated 57 million workers who lack access to an employer-based retirement account.
While you can set up an IRA outside of employment, people are 15 times more likely to save if they can do so through a workplace plan, according to AARP.
Large companies are more likely to offer 401(k) plans. Among employers with 500 or more employees, 90% offer a plan, according to the U.S. Bureau of Labor Statistics. That compares with 56% at firms with under 100 workers.

The auto-IRA programs address that disparity: All but the smallest firms — say, under 10 workers or those that don’t use an automated payroll system — face the mandate to participate or offer their own plan.

Some companies choose 401(k) over the state program

It appears some companies are choosing a 401(k) instead: In the one year after the first three auto-IRA programs launched — Oregon (2017), Illinois (2018) and California (2019) — there was a 35% higher growth rate among new 401(k) plans at private businesses in those states versus other states, according to recent research from Pew Charitable Trusts.
“We’ve seen a growth of new 401(k) plans in those states that have adopted auto-IRAs,” said John Scott, director of Pew’s retirement savings project. “A lot of employers are saying they’d rather have a 401(k), so in a lot of ways I think the state programs are nudging employers toward offering 401(k) plans.”

Federal rules encourage businesses to offer 401(k)s

Changes at the federal level, enacted as part of the 2019 Secure Act, also are intended to help small businesses offer 401(k) plans. Instead of sponsoring their own plan and taking on the administrative and fiduciary responsibilities that go with that, they can join a so-called pooled employer plan with other businesses — a sort of shared 401(k).
Legislation known as Secure 2.0, which was enacted last month, includes provisions to further enhance the appeal of a pooled plan.
“The idea is to try to fill in the [access] gaps as much as possible,” Scott said.

While Congress has appeared loath thus far to require companies to offer a 401(k), lawmakers did include a mandate in Secure 2.0: 401(k) plans will have to automatically enroll their employees. However, it excludes existing plans, businesses with 10 or fewer workers and companies less than three years old.

Limitations to the state programs

There are limitations to the state programs. For example, they do not provide a matching contribution as many 401(k) plans do.
Contribution limits also are lower than in 401(k) plans. You can put up to $6,500 in a Roth IRA in 2023, although higher earners are limited in what they can contribute, if at all. Also, anyone age 50 or older is allowed an additional $1,000 “catch-up” contribution.

For 401(k) plans, the contribution limit is $22,500 in 2023, with the 50-and-over crowd allowed an extra $7,500.
However, Roth IRAs — unlike traditional IRAs or 401(k) plans — also come with no penalty if you withdraw your contributions before age 59½. To withdraw earnings early, however, there could be a tax and/or penalty.
The programs also are partly borne out of necessity. Essentially, states have recognized that doing nothing means risking increased pressure on state-funded social services for retirees who are struggling financially.
“States took the lead to begin to close the access gap,” Antonelli said. “The cost of doing nothing is too great, with significant multibillion dollars in estimated budget and fiscal impacts for many states over the next 20 years due to an aging population that will have little or nothing saved for retirement.”

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