End Of The Year Financial Contributions & Checklist

It’s hard to believe, but the final quarter of the year is now upon us. As 2022 comes to a close, here are some key money moves you can make to finish the year off strong and set yourself up for success in 2023.


As we head into the final months of the year, it may be a good time to gather your important financial documents, preferably into once place such as an automated financial planning software. Once your financial data is organized, analyze it, take a look at your spending, budgets, and cash flow, to make sure you are on track to reach your financial goals for the year. Then, implement any necessary changes. Additionally within this process, take some time to set new financial goals for you and your family for the upcoming year.


Given the extreme market volatility and economic uncertainty we’ve seen this year, this task is more important than in previous years. If you are working with a financial professional, ask them to tax loss harvest your accounts to capture losses, and rebalance your portfolio. As mentioned above, given the extreme market volatility the markets have been facing, make sure your asset allocation is right for you, that you are comfortable with your portfolio during the highs and the lows. Even if you’ve found the perfect asset allocation for your investment portfolios, its important to revisit your allocations periodically and do a portfolio review. Overtime, your investments may perform differently than you expected, which will change your intended allocation.


If you’re planning to max out your 401(k) for 2022, mark your calendar for December 31st, as this is the last chance to do so. The IRS just announced retirement contribution limits for 2023, so check those out as your project your budget for next year. If you receive an end-of-the-year bonus, you may want to consider putting as much of it toward your 401(k) plan as you are able to. Additionally, if your company offers a match, make sure you are contributing at least the match to take advantage of those essentially free dollars.

If you are HSA eligible, make sure you are contributing to your HSA before the end of the year. Lastly, if you have young children, hopefully you are already contributing to a 529 plan to help pay for college when the time arrives. If not, now is the time to set one up. If you already have an account set up, make sure you remember to make your annual contribution. 529 plans have varying deadlines set by the state, but many have a December 31 cut-off. If you miss the end-of-year deposit deadline for your plan, you could be missing out on significant state tax breaks. 


A Roth IRA conversion involves transferring retirement funds from a traditional IRA or 401(k) into a Roth account. Since the former is tax-deferred while a Roth is tax-exempt, the deferred income taxes due must be paid on the converted funds at that time. There is no early withdrawal penalty. Inquire about whether a Roth conversion is right for you. 


Donor-advised funds are tax-deductible financial accounts provided by 501(c)(3) nonprofits who are approved, donor-advised fund sponsors. The funds are opened in the donor’s name, and they enable a donor to donate funds and get a tax-deduction immediately while deciding later which organization those funds will support.

After you set up a DAF, you can add money or appreciated assets into one of these funds and receive a tax deduction for the money or assets on the day you put them in the fund. And then, any time in the future — whether one day or ten years later — you can give the money out to any charity of your choosing. Check out our podcast with Elizabeth Goldstein regarding Donor Advised Funds and how to get involved.


Now is a good time to revisit the annual subscriptions you are paying for. Do you really need Netflix, Hulu, Apple TV and other streaming services at the same time? You might be able to cut down on some of your monthly expenses by taking a good look at what you are actually using vs. what you are paying for. You’d be surprised at how these services add up so it’s a good time to assess what you might be able to save money on in the upcoming year.

Finally, now is a great time to schedule a meeting with your financial advisor to review your year-end financial planning. It’s important to have that meeting before year-end to set the stage for a financially successful year in 2023. Besides the list mentioned above, there are tons of other tasks you may need to check off your list before the end of the year so let us know if you need any help!  If you don’t currently have a financial advisor and would like some help with your year-end planning, please contact us for a free 30-minute consultation today! 

The Value Of Ongoing Financial Advice

As financial advisors, we work with individuals everyday to deliver value and financial advice. At Sherman Wealth, we specialize and focus on customized financial advice and plans. We often discuss the difference between DIY “do-it-yourselfers” and financial advisors. One very important differentiator between the two is the value of the advice.

We believe that financial advice is most successful when it’s built on a relationship. The reason we strongly believe in customized plans is because no investors are alike. Therefore, it’s prudent to work with someone you not only trust, but who will create a plan that is specific to and will reflect your goals and needs and adjust them as they change over time.

When looking for the right advisor to provide you advice, make sure they can help in these three overarching areas: investments, planning, and ongoing advice. I’d say one aspect many individuals don’t focus on is the ongoing advice component. We always tell our clients and prospects that a one-time financial plan is just a roadmap and snapshot in time. While that snapshot and roadmap will lay the foundation of your financial future, life is complicated and changes overtime. It’s important to have a trusted individual stay the course with you, jump the hurdles, and adjust your advice as your life becomes more complex.

A timely example of needing ongoing advice is this year. As we’ve been writing about, this year has been off to a very rocky start, and the markets have been digesting lots of uncertainty creating extreme volatility. With inflation at all time highs, the Federal Reserve raising interest rates, and individuals adjusting to this economic environment, ongoing advice is prudent. We’ve been working with individuals to adjust their budget to this higher cost of living, as well as revisiting cash ideas and asset allocations based on risk tolerance. If you’ve felt financially uncertain during the course of this year, this is your sign to consider an advisor who will provide you with ongoing advice. If you have any questions and are seeking either a one-time financial plan or an ongoing relationship, email us at info@shermanwealth.com or schedule a complimentary intro call here.

Things To Do In A Market Correction

As we’ve been making our way through this market correction and this interesting economic environment with the Federal Reserve raising interest rates to combat inflation, we’ve been getting many questions about which financial moves you should be making and which ones to avoid. While market volatility can be stressful and scary for us all, the way in which you approach and react to the fluctuations in the markets themselves can say a lot about your portfolio and investments. So, let’s jump in. 

First and foremost, it is important not to panic and make sure you stick to your long-term plan when the market is going through a correction period. We know it’s easy to get caught up with the media and headlines, tempting you to derail your financial plan and allocation during volatility and market downturns. As we have seen time and time again, your long-term strategy will most likely stay the course through the ebbs and flows of the market. As long as you choose an allocation that works for you in market highs and lows, then sticking to it for the long-haul is the right move. Don’t obsess over the markets – they will always do their own thing.

If you do happen to have some extra cash sitting around right now, we’ve been talking with many clients and prospects about the attractiveness of CDs, treasury bills, and high yields savings accounts for more liquid cash and then of course putting any other money thats available to work in the markets! Dips in the markets are good opportunities to enter or invest more if you are comfortable with your overall risk.

However, if you find yourself having trouble sleeping at night through all this volatility, it might be a sign that you have too much risk in your portfolio. Maybe think about re-allocating your portfolio or working with a professional to feel more comfortable about your situation. It’s extremely important to understand your risk tolerance before investing to ensure that you can handle the investments you are taking on. If you would like access to our complimentary risk tolerance questionnaire software, email us at info@shermanwealth.com to learn more or click here

If the COVID-19 pandemic taught us anything, it’s the importance of having a plan in place for when life throws uncertainties and hardships our way. If you do not have a financial plan, NOW is the time to implement one. We’ve been working with many clients on end-of-the-year financial and tax planning, revisiting budgets, setting goals, and projecting for 2023.

Not only is it smart to have a financial plan set in case of emergencies, but you should also have an estate plan set up. For more resources on how to get started on estate planning, check out our blog here. Remember, long-term plans are put in place for a reason, so try not to panic and do not derail your plan in the presence of volatility. Also keep in mind that everyone’s personal and financial situation differs, so make sure not to confuse your time horizon with your friend or next door neighbor. If you find yourself nervous or anxious during this time or even feel comfortable but have questions, we are here to help. You can send us an email at info@shermanwealth.com or schedule a complimentary meeting here.

Now Is The Time For Your End Of The Year Financial Planning

As we are well underway in the last quarter of the year, its a great time look at your finances as a whole, see what you have achieved thus far in the year, and re-assess your goals for year-end. We know it’s been quite a wild first half of the year in the world and in the markets, in fact, it has been the worst first half on record since 1970, along with 40-year high inflation data, the Russia-Ukraine war, the Federal Reserve hiking interest rates, and more, which makes this year’s EOY planning even more prudent. 

So, as you take a look at your finances and prepare for the holidays and 2023, let’s look at some steps you can take to reach your financial milestones. First and foremost, we’ve been focusing on tax planning and projections with many of our clients. It’s crucial to know your tax liability and prepare for the year to come in terms of your cash flow and savings. If you’d like us to analyze your tax return and help project what your 2022 tax scenario will look like, we are happy to help. Next, get organized. Organization and knowing everything you have and its location is something many individuals lack when it comes to their finances. Consider automating your finances all into one place so you have it easily accessible and at your fingertips. Make sure your beneficiaries are up to date and you have your estate planning in line. If you are interested in a demo of our financial planning software or have any related questions, please let us know. 

Once you have organized and consolidated your financial accounts, think about fulfilling your goal buckets, such as your emergency fund, 401(k), IRA, HSA, and regular brokerage account. The IRS has just announced 2023 tax income brackets as well as increased retirement savings contribution limits, so make sure you are projecting for that and also funding your 2022 contributions while you still have time! The extreme volatility year to date may be having you rethink your risk tolerance and attitude towards investing; however, it’s important to make sure that you don’t let volatility completely derail your long-term financial plan. 

One goal you might want to focus on during the last quarter of the year is funding your emergency fund and buckets for large purchases or tax payments. It’s always a good idea to have an emergency fund available to you in the event of a rainy day, so come up with a number that is comfortable to you and try to reach it. Additionally, given the current economic environment, we’ve been discussing cash management with many clients. If you have a large purchase coming up or are sitting on cash earning close to 0% at a money center bank and don’t want to put that money at risk, consider setting those funds aside in a high yield savings account or an FDIC insured CD/Treasury Bill. While these are only a few ways one can maximize their finances before the end of the year, it’s important you revisit your goals and see where you are in reaching them for the year. If you have any questions about your particular situation and are looking for a professional to help you with your end of the year planning, please schedule a complimentary 30-minute intro call here or email us at info@shermanwealth.com

Does Money Negatively Impact Your Mental Health

Mental health awareness and wellbeing is so important and should be constantly discussed and talked about. With World Mental Health Day just having passed, we thought it would be timely to discuss not only the importance of mental health, but also mental health as it relates to finance. It’s obvious that finances and money can be extremely anxiety producing and stressful for many. In fact, according to a recent survey from BankRate and Psych Central, “42% of U.S adult say money is negatively impact their mental health.” So, while it’s clear that many individuals feel overwhelmed by their finances, it’s also true that there are many ways to alleviate that stress to avoid negative mental health. So let’s dive in to see what those are. 

At Sherman Wealth, we are constantly advocating for, spreading, and teaching financial literacy topics and education. Financial literacy is lacking greatly in our country and is one of the largest reasons so many individuals feel so insecure and unconfident when it comes to their personal finances, because they lack common and simple financial facts and knowledge. So, starting with the basics is extremely important. Seek out financial literacy courses or seminars, do some research, and make sure you are understanding everything you have, where it all lives, and how it works. 

Another way to feel less overwhelmed by your finances is to get organized. We always preach the importance of organization, consolidation, and automation. Make sure you are automating your finances, that they live and you can see them all in one place, and that you don’t have accounts all over the place. By not consolidating, it’s very easy to mix-up or lose old accounts you may forget about. Budgeting is a large part of financial security and financial planning. Make sure you are tracking what you spend and know how much money is coming in as well. We have also found that building and funding an emergency fund helps individuals feel more secure about their financial picture. If you are seeking financial literacy courses or would like to utilize our financial software to automate your finances, email us at info@shermanwealth.com for more information. 

Next, establishing a financial plan can help alleviate stress and maintain positive mental health. At Sherman Wealth, we build customized financial roadmaps that are unique to the needs, risk tolerance, and goals of each client. If you do not feel comfortable creating a financial plan yourself, seek help! Working with a financial advisor may lift some pressure off your shoulders as you will have an unbiased and conflict-free second opinion, accountability partner, and financial concierge in your corner as you tackle your financial life. As we approach the last quarter of the year, it’s a great time for end of the year financial planning. Keeping and maintaining positive mental health is our top priority so we are here and happy to help you in any way that we can. If you have any questions or are seeking financial assistance or reinforcement, email us at info@shermanwealth.com

Is Lifestyle Creep Impacting You?

Brad Sherman:  Today we want to discuss lifestyle creep, a big topic in the news, along balancing increasings costs, inflation, home prices, and more. We also want to talk about saving for your future and paying yourself first. Ashley, I know you wanted to talk about it being a really important balance strike, so do you want to share some thoughts and ideas that you may have about it?

Ashley Perlmutter: Yeah, well, for starters, for those of you who don’t know what lifestyle creep is, it’s pretty much when your income is rising or has rise, but your discretionary spending rises as well. So oftentimes, when you’re making more, you start to spend more, whether it’s voluntary or not. Obviously this varies per person, but sometimes life style creep makes it feel like your raise or increase in pay no longer feels like a raise, because your spending is going up as well. So a lot of times, we see individuals let their lifestyle creep get carried away. Brad, do you want to talk about some tips that you have for people who maybe let lifestyle creep take over when they get a pay raise?

Brad Sherman: Yeah, to bring it back where we started from, I think there’s two separate things here, there’s inflation that that people are concerned about. And then there’s lifestyle creep. So getting a $10,000 raise at work doesn’t necessarily mean buying a more expensive car, or going out to more dinners or taking greater vacations. I think that you should stick with your financial plan, regardless of the amount of money that you’re making. And certainly we want you to increase your lifestyle. But as you define lifestyle creep, it really is when your expenses are far exceeding your raise or increase in pay. So certainly understand the environment that we’re in where things cost more, but find a balance between saving and paying yourself first. I think that paying yourself first is really important. We always advocate to maybe increase your 401 K contribution. If you’re not already maxing that out. If you’re eligible for a Roth IRA, start contributing to that, maybe focus on your long term goals. And then we talked about this last week, but 70% of the folks out there don’t even have a financial plan, so it’s really hard to know where you’re going without a map in mind.

Ashley Perlmutter: Yeah, that statistic was really interesting and surprising. We wrote a blog last week about how important having a financial plan is, especially given the current market environment. Like Brad said, try not to increase your discretionary spending too much when you get a raise, and stick to those long term financial goals. And like we said earlier, with inflation, things are just becoming more expensive on the day to day, so keep that in mind if you decide to spend more.

Brad Sherman: Great, let’s keep all that stuff in check, like we said, if you get a 10% raise, maybe you allocate a certain percentage to going out to dinner more, something that makes you happy, whether that’s concerts, food, but don’t go too crazy to where you’re spending the raise in excess of what you can afford. So anything else you want to touch on?

Ashley Perlmutter: No, I think that is a great place to wrap up. Let us know if you have any questions about lifestyle creep. If you feel like you need to revisit your budget, I think that’s a great place to start, especially given inflationary prices and everything going on. If you’re stressed about your investments and your portfolio allocation, now’s a great time to revisit that as well. So let us know if you have any questions and if we can help in any way. Email us at info@shermanwealth.com or schedule a complimentary 30-minute intro meeting here.

Are You Nervous About The Extreme Market Volatility?

Wow, what a rough and volatile week, month, and quarter its been in the U.S stock markets. In fact, the S&P 500 has seen its worst start to the year since the 1930s. We know the volatility within the markets and the Federal Reserve hiking interest rates is uneasy for all; however, as we always say at Sherman Wealth, transparency, communication, financial literacy, knowledge and confidence is extremely important.

So, thanks to our friends at Y-Charts, we will share some visuals of how the stock market has performed over the last few months and since the beginning of the year as it’s been digesting this new economic environment with the Federal Reserve hiking interest rates to combat inflation. 

U.S stocks recovered a little to start October after closing out a rough September with consumer prices rosing higher than expected showing that the Federal Reserve still has a lot of work to do to combat inflation. As you can see in the chart pictured above, September had an ugly month, setting a new 2022 closing low ending the month down about 9%.

Due to inflation remaining high, Federal reserve officials have made it clear that monetary tightening will continue despite the risk of a recession. Zooming out even further, the stock market saw its worst quarter since 2008, as show in the chart below. 


We will continue to monitor the direction of the US economy and stock market as the Federal Reserve continues to do its job to fight inflation. Despite this gloomy economic data, now is the time to get a hold of your finances, to make sure you are comfortable with your risk tolerance and asset allocation, and to make sure you have a sound financial plan in place. If you are extremely anxious and having trouble sleeping at night, this might be your message to revisit your finances and seek help from a financial professional. If you have any questions or concerns, let us know we’re here and happy to help! Email us at info@shermanwealth.com or schedule a complimentary introduction call here

President Biden’s Federal Student Loan Forgiveness Plan

For those of you who have been taking advantage of the federal student loan relief since 2020, we know you have been anticipating this week’s announcement from President Biden on the Federal Student Loan Re-Payment/Forgiveness plan as you have been preparing to begin your student loan payments again. This payment pause included a suspension of loan payments, a 0% interest rate, and a stopped collection on defaulted loans since the COVID-19 pandemic.

However, earlier this week, President Biden finally announced a three-part plan to aid American’s with federal student loan debt as they continue to recover from the economic strains of the COVID-19 pandemic. Within his three-part plan, he announced that he would be extending the pause on federal student loan repayment “one final time” through December 31, 2022, with resuming payments starting January 2023. He also announced that the Department of Education will provide up to $20,000 in debt cancellation to individuals who received Pell Grants in college from the Dept. Of Education and $10,000 in canceled debt to non-Pell Grant borrowers. In order to qualify for the debt cancellation, borrowers individual income must be less that $125,000 or $250,000 for married couples/head of household. For more granular details on Pell Grants and other items in Biden’s three-part plan, visit the White House fact sheet here.

We know there are many unsure details and unanswered questions from President Biden’s announcement; however, we will continue to monitor more detailed clues and announcements on eligibility, rollout, and claiming relief in the coming weeks. If you have been taking advantage of this federal student loan relief for the last two years and believe that this new forgiveness plan applies to you, let us know and we are happy to help you figure out what your situation will look life. Email us at info@shermanwealth.com with questions or comments.

Women Feel Less Prepared For Retirement

Building your wealth and saving for retirement is such a prudent part of your life and career. Many individuals often times overlook the importance of starting early and learning ways to maximize their savings. While both men and women show a lack of financial literacy as it relates to their finances,  we saw some research from the TIAA Institute that found that “women have 30% less retirement savings than men”, as well as research from AARP that found “that a quarter of women nearing retirement age don’t feel confident they’ll have enough money to support themselves”. We find this statistic shocking and a wake up call for employers and individuals to help spread and teach financial literacy to their employees. In fact, further research from the TIAA Institute Personal Finance Index found that “women have lower rates of financial literacy than men, which makes them more ‘financially fragile’. Individuals who are financially illiterate have great trouble making sound financial decisions that ultimately may lead to them derailing their financial plan and harming their financial future.

So, now that we know financial literacy is lacking in many women across the globe, what are some retirement tips and facts they should know? Well first and foremost, for those who may not know, a 401(K) is a retirement vehicle often available within your workplace that allows you to save a portion of your paycheck towards your retirement savings. It is a great way to set aside money each month and build your wealth. Starting early and often is something that we always share with prospects and clients, as time in the market is more beneficial than trying to time the market, as you can take advantage of letting your money compound for the long haul. Next, it’s important to analyze your risk tolerance. Given the extreme market volatility we’ve seen since the beginning of the year, we’ve noticed that many individuals are actually inaccurately allocated in their investments, which can cause anxiety for folks. If you are interested in learning what your risk tolerance is, email us at info@shermanwealth.com to take our customized risk tolerance questionnaire. 

Some more about workplace 401(k)s, many companies offer a company match up to a certain percentage, which is essentially free money to take advantage of from your employer. Check out our blog for more information on why company matches are so crucial to take advantage of. Another great tip when it comes to your 401(K) and retirement savings is setting up automatic contributions. This way you are able to set aside the same amount of money per month, having it become automatic and consistent in nature. In conclusion, educating yourself on your workplace benefits, becoming financially literate about financial topics, and starting early on your retirement savings are all great ways to advance your financial future. If you have questions about your workplace benefits or how to maximize your retirement savings, email us at info@shermanwealth.com and we are happy to help. 


Preparing For Your Student Loan Re-Payments To Resume

If you have been taking advantage of the COVID-19 Emergency Relief and federal student loan forbearance program the last two years, you should know that the student loan forbearance is scheduled to stop at the end of this month, on August 31, 2022. This payment pause included a suspension of loan payments, a 0% interest rate, and a stopped collection on defaulted loans since the COVID-19 pandemic.

While it is still unclear whether the Biden Administration will extend this student loan forbearance program, it is a good time to start preparing to make payments again next month. So, you may be asking yourself, “How do I prepare for repayment to resume?” Well, first and foremost, login to your profile on your loan servicer’s website to ensure all your information, including email, phone number, and address is up to date, since you may have not taken a look at it in a year or two. Next, for those of you wondering what your new payment will look like, it’s a good idea to reach out to your loan servicer to get an estimation. 

Once you receive some clarity on what your new payment will look like, you may want to revisit your budget to see how this additional payment will fit in. Make sure you are projecting your budget for the rest of the year and beyond to include this payment whether there is another extension or not. We will continue to monitor updates on the forbearance and how you should be preparing for the re-payments to resume. 

As we’ve been discussing, we are over halfway through the year which marks a great time to check-in and adjust your financial plan in general. Call or reach out to your student loan servicer with more particular questions as you look into your situation. Additionally, if you have further questions on your student loans and how to adjust your budget, please email us at info@shermanwealth.com or schedule a complimentary call here as we are here and happy to help you talk and work through it.