The end of the third quarter of 2023 brought some challenges in the financial markets. The S&P 500 fell -4.9% in September and the MSCI All Country World index dropped -5.08% for the month, driven by a sudden spike in long term interest rates. That was in the context of some dour headlines, including: And that…
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Understanding the Federal gift tax is essential for sound financial planning. This article aims to explain key concepts, debunk some common misconceptions, and outline some practical strategies for those who wish to incorporate gifting into their financial plan. A gift is a transfer of property. The IRS considers a gift to be any transfer of cash…
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Qualified tuition plans, more commonly known as “529 accounts,” are tax-advantaged savings accounts designed to help families save for future education expenses. These accounts are named after Section 529 of the Internal Revenue Code and are sponsored by states, state agencies, or educational institutions. 529 plans come in two forms: prepaid tuition plans and college savings…
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Deciding to retire during market volatility can be a tough call. Do you stick it out for another year, or take the plunge? Even with a well-diversified global portfolio, the timing of retirement can expose an investor to “sequence of return risk,” which is the risk that a market downturn will occur early in retirement. When a…
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In Q1 of 2023, global stocks gained nearly 7% in the first quarter, continuing the upward momentum that we saw in Q4 of 2022. Bonds also posted healthy returns, with the US Aggregate Bond Index returning almost 3% in just three months. Despite these investment returns, the quarter will be more remembered for a series of unnerving…
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There are several provisions in Secure Act 2.0 that relate to ROTH IRAs and ROTH accounts within workplace retirement plans. ROTH AccountsFirst, as reminder, ROTH accounts are funded with after-tax dollars. In other words, no tax-deduction is taken when funds are contributed to the account. The funds within the account grow tax-free and when they are withdrawn…
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Those who reach age 72 in 2023 or beyond now have more time to opportunistically take distributions from their tax-deferred accounts in efforts to minimize their tax liability over their retirement years.1 For those who will turn 72 in 2023-2031, RMDs must begin at age 73; for those who turn 72 in 2032 or later, Required…
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What is an I-Bond? US Treasury Series I-Bonds (I-Bonds) are inflation-adjusted savings bonds. Interest compounds every six months (May and November), and the rates are also reassessed at that time. The annual interest rate for I-Bonds purchased from November 2022 through April 2023 will be 6.89%. The stated rate applies for the first 6 months…
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As the market accepted the reality of higher interest rates, a likely recession, and heightened uncertainty, both equity and bond markets continued their decline. Below are the asset class returns for 3Q of 2022. The news media would like us to believe that these declines are the result of a world spinning out…
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With inflation and recession fears dominating headlines, both stocks and bonds continued their fall in the second quarter of 2022. At times, it useful to put short term market conditions in the context of longer market cycles. If we go back to the January 1, 2009, we observe that the S&P 500 (with dividends reinvested)…
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