Don’t Assume Clients Know the 2022 Playbook

Reach out to remind them of changes regarding taxes, Social Security and more.

By Alex Reffett

With a new year upon us, it’s only natural to reflect on the ups and downs of the past 12 months – and to think about the direction we’d like to go over the next 12. And while nothing is completely predictable (a lesson we keep relearning, it seems), we can use the trends and insights of 2021 to help shape the way we operate in 2022.

Mistakes Made, Lessons Learned

Hindsight is 20/20 of course, but looking back at some of the missed opportunities from the previous year can highlight areas of opportunity for the upcoming year.

It may seem basic, but the biggest mistake people made last year (and every year, frankly) is not getting started sooner. By not participating in the historic markets we had in 2021, especially during a time when inflation was peaking, they may fall further behind in meeting certain goals.

Separately, low interest rates were certainly an opportunity for mortgage owners to consider refinancing their properties. It’s likely the Fed will begin raising rates in 2022 to combat inflation, so time is running out for those clients who might want to take advantage.

The environment is ideal for reconnecting with current clients. Take the time to explain how it impacts them, reevaluate plans, and pivot strategies if needed.

Combatting Inflation

News of record inflation dominated the financial world toward the tail end of 2021 and appears to still have a stranglehold on our economy. While inflation is likely to moderate later in 2022, it should continue to remain somewhat elevated relative to the last 20 years. Therefore, advisors would be wise to continue to factor this into planning.

For our firm, a multi-prong approach incorporating strategies like TIPS, floating rates, broad commodities and quality stocks helps balance portfolios against inflation. As previously mentioned, the Fed is likely to raise rates in an attempt to counteract this ongoing inflation. When that time comes, we will favor Quality Stocks with pricing power as opposed to those of high growth or speculative issues.

New Year, New Rules

Social Security

Two major changes are in effect for Social Security this year. First, the nation’s more than 64 million Social Security beneficiaries are receiving a 5.9% cost-of-living adjustment — the largest increase in 40 years.  Second, full Social Security benefits will not kick in now until age 67 for anyone born in 1960 or later. The oldest members of this cohort turn 62 this year, the age of eligibility to retire and collect reduced Social Security benefits.

While the COLA increase was a nice surprise, full retirement age — being able to claim 100% of the Social Security benefit calculated from lifetime earnings — has been incrementally increasing and this should already be baked into plans as it has been known about for some time.

Advisors should also keep in mind that the maximum earnings now subject to Social Security tax climbs to $147,000 this year (up from $142,800 in 2021). Social Security beneficiaries who are younger than full retirement age can earn up to $19,560 before their benefit is temporarily withheld. Additionally, clients can expect to receive new Social Security statements that will include extra information about available benefits at different ages, as well as details about earnings history.


Tax laws are also undergoing major changes this year. The highest federal tax rate will remain at 37%, but individual taxpayers won’t enter this bracket until their incomes hit $539,900 (up from $523,600). Married, couples filing jointly will reach this top tax bracket at $647,850 (up from $628,300).

Ultra-high-income earners, will also face a tax surcharge of 5% on modified adjusted gross income exceeding $10 million and a 3% surcharge on MAGI topping$25 million.

Contribution Limits

Employees’ 401(k) contribution limits are breaking the $20,000 mark for the first time in history, increasing to $20,500 for 2022. The maximum contribution for both employer and employee is now $61,000; for taxpayers 50 and older the catch-up limit increases that to $67,500.

Make sure clients are aware of these changes – don’t simply assume they already know. Not only will it show you’re thinking of them proactively, it will also give you a chance to reengage with them about new life events or recent concerns that might necessitate a change of plan or a more in-depth meeting.

Trends to Watch

Crypto was certainly a hot topic in 2021 as the industry raced to provide securitized options for investors. While interest has been piquing in both the general public and investment companies, the SEC is still very wary of these unregulated markets and has tight regulations around what is allowable. It’s probably a safe assumption that most advisors will continue to caution their clients against crypto, but it is going to be very interesting to watch these markets continue to develop in 2022 regardless.

Another trend we expect to see continue is an increase of advisors fleeing large institutions for the independent channel. Considering the scale of breakaway firms that have emerged over the recent years, it seems almost irreversible at this point.

 Regardless of what 2022 brings, it is our responsibility to help our clients navigate the complexities of achieving their financial goals. Taking a moment to reflect on the changes that have taken place over the past year, and those we expect to see this year, will strengthen our ability to serve clients in a more thoughtful way.

After working for an industry broker-dealer, Alex Reffett broke away and co-founded East Paces Group to provide more customized money management solutions to his clients. He spearheads the company’s growth strategy by forging strategic partnerships and leading advisor recruiting and acquisition efforts.


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