Year End Financial Planning in 2022

Sage Casaga, Investment Advisor Representative

Coming into 2022, middle and upper-class households had lofty financial goals and expectations. With the S&P 500 gaining ~26.9% in 2021 and the US economy (GDP) growing faster than any year since 1984, it was hard to imagine that 2022 would be as difficult of a time, as it has been for investors. While market volatility is inherently part of investing, the most important thing is to make sure you and your family have a solid financial plan in place to deal with it.

As we approach the last quarter of the year, it is crucial to understand and implement the planning strategies that are still available and can help maximize your financial situation.

Here are some ideas we use for some of our affluent clients:

Tax-Loss Harvest

A good way to reduce your overall tax liability is to make sure tax-loss harvesting is done in any taxable account. While many wait to do this at the very end of the year, this should be considered throughout the entire year (especially with the turbulence we’ve experienced in both stocks and bonds in 2022). Realizing capital losses can be used to offset other realized capital gains throughout the year. The IRS allows $3,000 in capital losses to offset ordinary income, and the excess can be carried forward to the following years. Don’t forget the wash-sale rule, and the fact that realizing gains, with losses in your portfolio can be a beneficial strategy.

Roth IRA Conversions

More likely than not, individuals who have done an excellent job saving for retirement will have too much money in Pre-Tax assets. This means a retiree would be paying more in taxes in retirement because the assets are producing more income. In addition, required minimum distributions (for Pre-Tax assets) may push a retiree into a higher tax bracket. To avoid this scenario, it may be worthwhile to convert some Pre-Tax dollars to Roth in lower income years and when account amounts are lower. This strategy can work well in certain scenarios because there are no required minimum distributions with Roth assets.

HSA (Health Savings Account)

One of the biggest risks to one’s financial plan is the possibility of having to pay medical bills due to unforeseen health issues. Outside of making sure one has the appropriate insurance coverage, contributing to an HSA can help prepare for the worst-case scenario. For 2022, the maximum contribution to an HSA is $3,650 for individuals and $7,300 for a married couple filing jointly. For those over 55, the additional “catch-up” amount is $1,000. Contributions to an HSA can provide a tax deduction now, as well as provide tax-free distributions after 65 if used for qualified medical expenses. Utilizing an HSA is a very tax-efficient account that may help in the most vulnerable times.

Solo 401k

For business owners, that don’t have any full-time employees and are looking for a tax deduction, talk to your advisor about contributing to a Solo 401k. The maximum employer contribution for 2022 is 25% of compensation, up to $61,000. The money in the individual 401k can be invested and grow tax-deferred for retirement. Often, it makes sense to contribute to other retirement accounts simultaneously.

Estate Planning

The current estate tax exemption is ~$24.12 million, which is set to sunset down to about half of that in 2025 (married filing jointly). For those that are charitably inclined and need to remove assets from the estate, there are a few tools to help gift money:

1) First, consider gifting cash to family members such as your children. The annual
gift tax exclusion for 2022 is $16,000.

2) A good vehicle to use can be a Donor-Advised fund – sponsored by a public charity
that allows one to make an irrevocable contribution to charity and be eligible
for an immediate tax deduction. See Hatem Dhiab’s article for more detailed

3) Another planning strategy is to gift assets through Charitable Trusts. Many of
these can provide tax benefits today and help you plan for a potential exit or an
expected, large taxable event in the future.


There are many ways to plan before the end of 2022, and these just highlight a few. Investors have experienced so many changes this year – from changing tax policies, to macro-economic conditions, to political shifts, and adjustments in contribution limits to certain accounts, which all provide planning opportunities. Because these strategies are quite complex, your advisor should sit down alongside your CPA and tax advisors to implement the best strategy for your situation and long-term plans. It is our pleasure to help our clients navigate this complex world and offer tailored solutions to meet their financial objectives.
Let us give you the Sage advice you’re seeking.

Sage Casaga is a Financial Advisor of Santa Monica, Calif-based Gerber Kawasaki Inc., an SEC-registered investment firm with approximately $2 billion in assets under management as of 04/30/22. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which course of action may be appropriate for you, consult your financial advisor. No strategy assures success or protects against loss. Readers shouldn't buy any investment without doing their research to determine if the investments are suitable for their situation. “All investments involve risk and one should consult a financial advisor before making any investments. Past performance is not indicative of future results."