3 Retirement Moves to Make Before 2023

A lot of people are already focusing on 2023 and what that means for their investments, Social Security benefits, and more. But there are still three months of 2022 to go, and that’s plenty of time to improve your retirement readiness and maybe save a little on your 2022 taxes in the process.

You can start with the three steps outlined below if you haven’t already done them this year.

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1. Claim your 401(k) match for 2022

If your employer offers a 401(k) match, you must contribute enough to your account by the end of the year or else you’ll lose it. 401(k)s don’t allow for prior-year contributions like IRAs, and employers don’t give employees an extra bonus if they choose not to claim their match.

Talk to your HR department or plan administrator if you’re unsure whether your company offers a 401(k) match or whether you’ve already claimed it for the year. If there’s still money left on the table, figure out how much you must set aside by Dec. 31 to get the full match.

Then, divide this by the number of pay periods left to see how much you need to set aside per check. For example, if you need to put $1,000 more into your 401(k) to get the full match and you have six more pay periods left, you’d need to set aside about $166.67 per pay period.

If you aren’t able to claim your full 401(k) match, do your best to get as much as possible by the end of the year. Then, as we enter 2023, make claiming your match your top priority. Put money in your 401(k) first before using other retirement accounts, and aim to set aside at least enough to earn your full match.

2. Stash extra cash away for retirement

Savings you don’t plan to use in the next few years can serve you better if you invest it for your future. But you can’t toss this money in a 401(k). You must open an IRA if you want to make a lump-sum deposit. Technically, you have until the April tax deadline to do this, but it’s simpler to make the contribution before the end of the year if you’re able to.

You can choose between a traditional IRA or a Roth IRA. Traditional IRAs give you a tax break upfront on your contributions, but you owe taxes on your withdrawals later. Roth IRAs work the opposite way, giving you tax-free withdrawals in retirement if you pay taxes on your contributions now. A Roth IRA is probably the way to go unless you expect your income to drop significantly in retirement. Then, a traditional IRA might help you save more on taxes.

A health savings account (HSA) is another option. These accounts are intended to hold medical savings for those with high-deductible health insurance plans — plans with a deductible of $1,400 or more for an individual and $2,800 or more for a family. But once you turn 65, the account essentially becomes a traditional IRA with the bonus of tax-free medical withdrawals.

If you have a qualifying individual plan, you can set aside up to $3,650 in an HSA in 2022, while those with qualifying family plans can save up to $7,300. Adults 55 and older can add an extra $1,000 to these limits. Like traditional IRAs, these contributions reduce your taxable income this year.

You can open one of these accounts with many banks and brokers, but it’s best to choose one that enables you to invest your HSA funds so your balance grows more quickly.

3. Review your retirement plan

Now’s a great time to look over your retirement plan to make sure you’re still on track for your goals. If you weren’t able to save as much as you wanted this year, you may need to increase your contributions in 2023. Or, if you decided to retire earlier or later than originally planned, you may need to create a new retirement plan.

Even if nothing’s changed for you, looking everything over can give you confidence you’re heading toward the future you want. It can also help you prioritize your savings goals for next year. Think about how much you’d like to save and which accounts you’re going to put your money in first, so when 2023 rolls around, you can put your plan into action.

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