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Perfection is the Enemy of Good, Focus on Executing Improvements.

Glenn Brown

While 2022 has been a challenging investment environment, it has been a fantastic year to see the benefits of executing financial plans over the past few years. 
Were all outcomes perfect? No, and they never can be. See by seeking the perfect opportunity or waiting for the perfect time, one prevents the implementation of good improvements. 
Consider the good done by executing on a remodel or outdoor project in 2017-19 or refinancing your mortgage and/or auto loans in 2020-21. More recently, how about deleveraging variable debt, establishing access to equity, raising emergency funds availability, modeling for variables such as inflation on expenses as well as remaining true to your risk tolerance. 
Sure, it’s easy to bemoan things that’s didn’t go as planned with investments, like bonds not playing their role portfolio stability in 2022. But this too shall pass as Fed pivots away from their feverishly raising of interest rates next year. Can the same be said next year about an opportunity to lock in your mortgage under 3% or get your remodel done at 30-40% less? 
There’s still some good improvements you can do by year-end, if appropriate. 
Roth Conversion. Have sizable Traditional IRAs? Think taxes are going up? You believe your holdings will rebound? With a strong handle on your sources of income and capital gains for 2022, consider modeling tax liability of different amounts converted to a Roth IRA. 
Remember, unlike a few years ago, you can no longer undo a conversion via “recharacterization”, so what’s done is done.
Tax-Loss Harvesting. Sell investments for large gains earlier in the year? Sitting on sizable unrealized losses? Consider selling to realize tax-losses that can offset current year gains or be carried forward against future year gains as well as write off up to $3,000 against ordinary income. 
Recall the IRS wash-sale rule prohibits selling an investment for a loss and replacing it with the same or a “substantially identical” investment across all household portfolios 30 days before or after the sale. So if you are going to sell and buy back, verify it’s clean 30 days prior and then wait 31 days. 
Last minute 401(k), 403(b) and 457 plan contributions. Ideally, you’d be at $20,500 maximum contributions limits ($27,00 if 50 or older). If not, many plans allow online changes up to 50% of wages. Have a year-end bonus? Can forgo a paycheck or two? Act quickly as plans require a pay cycle for updates to take effect. 
And if you’re late to impact 2022, then see how long you go with higher contributions to front load towards 2023 contributions limits of $22,500 ($30,000 if 50 or older).
Still waiting for perfect, instead of executing on the good? Ok, there’s this 30-year old “genius” that founded a crypto exchange in the Bahamas and issued their own coin for trading. In 3 years, he’s worth $25 billion and his firm’s Marketing/PR includes Tom Brady, Stephen Curry, MLB, NBA, plus TV personalities call him a modern-day J.P. Morgan and has clout as 2nd largest US political donor in 2022.  
Perfect, right?
Please note the sarcasm, and put the work in towards the good.
May you and those closest to you enjoy a happy and safe holiday season.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Glenn Brown is a Holliston resident and owner of PlanDynamic, LLC, Glenn is a fee-only Certified Financial Planner™ helping motivated people take control of their planning and investing, so they can balance kids, aging parents and financial independence.
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