The year is coming to a close. Here are the financial strategies you need to implement for a successful 2022.

This moment is ideal for reviewing your finances and executing vital actions that not only benefit you now but also set the stage for future stability. You still have time to utilize tax benefits and employee perks before year-end, and it's crucial to make informed decisions during open enrollment for 2022. Reflecting on your financial aspirations for the upcoming year and beyond is also beneficial. After many changes over the last 18 months, reassessing your financial objectives and how to achieve them is wise. Here's how to get started.

Maximize Retirement Savings Before Year-End

Review your contributions to your 401(k) or other retirement accounts to date, and if possible, increase your contributions for your remaining paychecks this year. In 2021, you can contribute a maximum of $19,500, or $26,000 if you're 50 or older.

Your contributions can lower your taxable income now and grow tax-deferred for later. For instance, if you earn $45,000 and fall into a 25% tax bracket, contributing 6% into a tax-deferred 401(k) reduces your taxable income to $42,300 ($45,000 – $2,700). This results in a tax savings of $675 compared to your full salary. The higher your income, the more you can save. With a tax-deferred 401(k), your investments can grow without immediate tax implications. You gain advantages now and in the future.

Moreover, you might receive additional funds from your 401(k) if your employer matches your contributions, typically between 2% and 6% of your salary. Don't let this opportunity pass; it's essentially a bonus from your employer.

Consider Contributing to a Health Savings Account

If you have a health insurance plan with a deductible of at least $1,400 for individual coverage or $2,800 for family coverage, you may qualify to contribute to a health savings account (HSA). You don't have to obtain an HSA through work; you can set one up independently with an eligible health insurance policy. Contributions made through your employer are pre-tax, while personal contributions are tax-deductible. Funds grow tax-deferred and can be used tax-free for qualified expenses at any time—unlike a flexible spending account, which requires using funds by year-end. Eligible expenses include health insurance deductibles, copays, prescription medications, and over-the-counter drugs. HSAs can also cover dental and vision expenses and other out-of-pocket medical costs.

Although HSAs allow for immediate use of funds, it's advantageous to let the money grow tax-free for future needs. After enrolling in Medicare, you can no longer contribute to an HSA, but individuals aged 65 and older can withdraw funds tax-free to cover Medicare premiums—making HSAs a smart way to save for medical expenses in retirement.

Utilize Your Flexible Spending Accounts

If you participate in a medical or dependent-care flexible spending account, check your current balances and plan to use those funds before the year concludes or before your employer's deadline. Many employers provide until March 15 for medical FSA usage or allow a rollover of up to $500 from one year to the next. Review your employer's guidelines, especially if they've recently changed. Unused funds may be forfeited.

In your healthcare FSA, you can cover various out-of-pocket medical expenses. Now might be a good time to schedule eye exams, dental checkups, or purchase glasses, prescription sunglasses, and over-the-counter items eligible for FSA reimbursement, like certain sunscreens and menstrual products. Check out the eligible items list at FSAStore.com.

If you have a dependent-care FSA, verify how much is remaining. You can use these funds for childcare costs for kids under 13 while you and your partner work or search for work. Covered expenses include preschool, daycare, nannies, and after-school programs. Be proactive in identifying qualifying expenses and gather receipts for past expenses as well.

Evaluate Employee Benefits During Open Enrollment

This time of year also brings the opportunity to make choices regarding your employee benefits for 2022. Avoid autopilot decisions; ensure you're maximizing your options. If multiple health insurance plans are available, consider your family's anticipated medical expenses, required medications, and the plan's network of doctors. If your spouse has coverage, weigh the benefits of joining their plan or adding your children to one plan or the other. Additionally, consider the advantages of selecting a high-deductible health plan that may qualify you for HSA contributions, especially if your employer contributes to that account.

If your employer offers the option to purchase additional disability insurance, evaluate that option as well. Your employer might provide some sick leave and disability benefits, but you may be able to enhance your coverage to protect up to 60% of your income, offering extra support if you're unable to work due to illness or injury.

Make sure to take advantage of other employer-provided benefits like gym memberships, wellness initiatives, commuting perks, and financial wellness programs. These can help you gain more value from your employment.

Reassess Your Financial Goals and Achievements

This is a great moment to review your current financial standing and consider adjusting your goals. After the disruptions of recent times, have your retirement objectives shifted? Are you now prioritizing living near family or relocating to a more affordable area? Have you adjusted to a different income or expenses? Reflecting on these broader aspects can be valuable. Consulting with a financial advisor might be beneficial to help you clarify your priorities and devise a strategy to achieve your financial aspirations.