Review Your Investment Strategy and Prepare for 2022 BA Schrock

The end of the year is a good time to reflect on 2021, how your financial situation may have changed, and your goals for next year. Maybe 2022 is the year you’ll retire, or maybe not. Either way, you can review your investment strategy and prepare for 2022 and beyond.

We Saw Record Highs in 2021 – What Will We See in 2022?

The S&P 500 index logged 64 new highs in 2021 as of November.[1] But how long can this last? Are we in a multi-year bull market?  Will there be a transition from high growth to value?  There are a few major questions/unknowns for 2022, including political uncertainty and new COVID variants. Consider how these unknowns can affect your portfolio around the time you retire and affect your finances for the rest of your life and plan accordingly. This could include rebalancing your portfolio, exploring alternative investments, or working to inflation-proof your retirement savings.

Prepare for the Tax Rates of the Future

Your retirement plan should include not only an investment strategy but also a tax minimization strategy. There are several tax-increasing proposals on the table, and it’s important to prepare. One potential option is to convert funds from a traditional IRA, 401(k), or similar qualified retirement account into a Roth IRA, no matter your income. In this case, you would pay tax on the funds converted and then be able to withdraw them tax-free later on, similar to a Roth 401(k). Keep in mind that Roth IRA conversions are now irreversible and that money can’t be withdrawn penalty-free until five years after it’s converted, and typically not until age 59 ½.[2] A Roth conversion could be one way to plan for the tax rates of the future.

What Can You Expect From Us?

You’ve done a great job earning and saving; now it’s our turn to help you prepare for the next phase of life. During the bulk of our adult lives, our investment strategies are built around the “accumulation of wealth.” Now that you’re at or near retirement, the goal is to protect what you’ve saved, maintain a reasonable rate of growth, and create an income stream that will last as long as you do. We can help you create a comprehensive retirement plan that’s tailored to you. Schedule a time to meet with us to plan for 2022 and beyond.


[1] https://www.kiplinger.com/investing/stocks/stocks-to-buy/603814/where-to-invest-in-2022
[2] https://www.irs.gov/retirement-plans/designated-roth-accounts-in-plan-rollovers-to-designated-roth-accounts