New Year Financial Health Check-Up!

The beginning of a new year brings a burst of fresh energy. Traditionally this is a time to commit to new habits or perhaps rededicate yourself to goals that have fallen by the wayside during the past year. While physical health and wellness are often our focus during these months, don’t forget to check in with your financial health as well. Last year was difficult for many people’s portfolios, but there are some simple actions you can take to shore up your personal balance sheet as we move into 2023.


financial health
It’s a New Year! Check

In 2023, the contribution limits for both 401(k) workplace retirement plans and for IRAs are increasing. The contribution limit for a 401(k) was $20,500 in 2022; in 2023, the limit goes up by $2,000 to $22,500. Individuals aged 50 or over can make an additional catch-up contribution to their 401(k); the catch-up contribution limit is $7,500, up from $6,500 in 2022.

There’s also good news for those eligible to contribute to a traditional or a Roth IRA. Account owners can contribute $6,500 this year to an IRA, up from $6,000 in 2022. The additional catch-up contribution limit for those aged 50 or over will remain at $1,000. These are significant changes (especially for older individuals), allowing for thousands of extra dollars to be placed into tax-advantaged accounts. As you begin to plan your yearly spending, consider taking advantage of these increased limits.


Ensuring that your individual accounts and overall portfolio maintain their intended asset allocation over time is an important task for managing the risk your investments carry, and for maximizing performance. Asset allocation refers to the division of your investments among different asset classes, including stocks, bonds, and cash.

Periodically rebalancing your portfolio to its originally intended asset allocation is a rule of thumb, and becomes especially important when the market experiences large swings as it did in 2022. This is a good time to examine the allocation of each of your accounts, as well as your total portfolio allocation, to determine if a rebalance is in order. Your financial advisor can help decide if rebalancing is appropriate and explain what tax ramifications there may be.


Inflation was one of the biggest stories of 2022, and the Federal Reserve responded by raising interest rates six times last year. While this marks an abrupt departure from the low-interest rate environment we’ve been accustomed to for the last decade, the increases also bring some benefits. Many investors keep emergency funds or cash otherwise marked for long-term savings in separate accounts, and now is a good time to review the interest rates on those accounts.

While larger banks often keep rates on their savings instruments and CDs low, online banks and smaller institutions may be offering much more attractive options. These services may not offer the convenience of nearby physical locations that bigger banks do, but still may be appropriate for housing cash that you do not intend to use in the short term.


Flexible Spending Accounts (FSAs) are health savings accounts offered through some workplaces that allow you to set aside pre-tax money for medical expenses. Typically, funds in an FSA plan must be used within that calendar year. However, some employers offer a provision known as a “grace period” that provides you extra time in the following year to use last year’s funds. If offered, the grace period is usually two and a half months, meaning it would extend until mid-March. January is the time to double check your FSA funds, find out if you’re eligible for a grace period, and to make medical and dental appointments accordingly.

Scroll to Top