Atlanta Financial Advisors & Tax Policies
2022 was a volatile year, with high inflation and volatile markets. Undoubtedly, many investors would have likely benefitted from a more sound plan as the prior year’s events unfolded. While we don’t quite know how 2023 will unfold, there are events that investors and financial advisors in Atlanta both should be aware of to prepare adequately.
In this article, we will discuss changes in Social Security, how the changing tax code could impact Atlanta, a major financial center in the U.S., and how consulting with an investment advisor can help you prepare for every contingency.
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COULD 2023 SOCIAL SECURITY INCREASES MEAN HIGHER TAXES?
2023 will see retirees receive one of the highest cost of living adjustments (COLA) in history. While this may combat the previous year's high inflation, it could also substantially increase your taxes in 2023. Advisors and retirees alike are paying close attention, as these changes could have substantial effects on Atlanta residents, as well as retirement planning in Atlanta.
Though the COLA may result in more income for retirees, it could also potentially push some retirees into a higher Social Security tax bracket. Though inflation has cooled some, it remains higher than many would feel comfortable with, and an increase in taxes could be detrimental to some retirees as prices remain high.
CHANGES HAPPEN BUT STAY FOCUSED ON THE LONG-TERM
Financial and retirement planning should be comprised of careful and comprehensive details and strategies, spread across decades. Within that timeframe of decades, there will irrefutably be changes, both within your plan and outside of it. This much is certain.
However, the important thing to remember is to stay consistent and focus on your long-term goals. Markets will neither remain robust nor volatile forever. Stay focused on your goals, and disciplined in order to achieve them.
Tax planning is a ubiquitous part of financial planning, regardless of what the markets are doing. Though the cost of living may fluctuate, as well as the tax code, you still want to have a sound distribution plan for your retirement accounts once you finally do retire.
Don’t let fickle market conditions or unforeseen circumstances allow you to stray from the path. Define your financial goals, revisit them regularly and adjust as needed, and consult the advisors at Linscomb & Williams for any Atlanta wealth management questions or concerns.
HOW CHANGES IN THE TAX CODE COULD IMPACT ATLANTA’S ECONOMY
2023 seems set to be an eventful year, as economists at the University of Georgia stated at the annual Georgia Economic Outlook that they believe Georgia's economy is headed toward a recession in 2023.
Believing that Georgia's economy will end its post-pandemic expansion within the first half of the year, they predict that a mild recession will begin. However, they also are predicting it to be mild; while many recessions last upwards of 10-12 months, the economists at the conference are predicting the recession to last around 6 months.
Although the increase in Social Security could potentially mean higher taxes on the federal level in 2023, Georgia was among many states that saw bipartisan support enacting a flat tax in 2022. Governor Kemp signed the bill into law last year, which changes the top tax rate of 5.75% to a flat 4.99% income tax for the next seven years.
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HOW ADVISORS ARE PREPARING FOR POTENTIAL CHANGES IN 2023
After such a tumultuous 2022 and an uncertain 2023, advisors in Atlanta are outlining all of their contingencies and making sure that their clients are well prepared too. Focusing on the bigger picture and putting things in the long term is paramount for both investors and advisors alike.
A CERTIFIED FINANCIAL PLANNER™ professional should stay up to date with changes in the tax code, Social Security and COLA changes, and what this could mean for their clientele and their unique situations.
While advisors are preparing the best that they can by understanding the changes and how they could relate to their clients, it’s important for you to reach out to them and schedule a meeting to see what you need to adjust (if anything).
CONSULT WITH YOUR ADVISOR
How much and how little any potential changes have on your retirement plans or finances will be entirely dependent on your situation and how you respond to it. To fully understand where you stand and how the current changes affect your portfolio and plan, you need to consult with your advisor.
Your situation is going to be unique; what investments and strategies worked for your coworker or neighbor may not work for you, and the same is true for potential changes. For example, an increase in taxes might be a mild inconvenience for some, and could significantly affect your retirement and how you distribute your income.
Schedule a call with your advisor today to discuss changes coming in 2023 and how you can prepare your portfolio and retirement plan to meet your goals.