IN THE KNOW
Monthly Newsletter
January 2023
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This month's newsletter discusses the passing of the SECURE Act 2.0 by President Biden in an attempt to aid Americans in saving more funds for retirement. We also review the responsibilities of an executor and what they can or cannot do when distributing the assets in someone's will. For this month's employee spotlight, we ask the team about their favorite books. Keep scrolling to read our highlights from Dimensional Insights, and plan for the upcoming events this month has to offer!
We are a firm that understands that managing your assets is about more than money. It is about empowering your future. At ML&R Wealth Management, we focus on you.
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Retirement should be a time for people to celebrate life and enjoy the fruits of their labor, with as little anxiety about finances as possible. Unfortunately, a November 2021 survey by the Insured Retirement Institute revealed that workers between the ages of 40 and 73 have insufficient retirement savings to cover their income needs, and they are not saving enough to catch up. In an attempt to address this coming retirement shortfall, Congress recently passed legislation that provides increased tax incentives for employers, encourages more workers to save for retirement, and could significantly reshape and improve retirement outcomes in the coming years for millions of Americans.
The SECURE Act 2.0 was signed into law at the end of 2022 by President Biden as part of the $1.7 trillion budget bill for 2023. The legislation has almost one hundred provisions that change many of the rules for existing retirement accounts (including 401(k), 403(b), IRA and Roth). The legislative package builds upon the 2019 SECURE Act.
Due to the number of provisions in the legislation, a complete analysis is not appropriate for this article, but let’s explore several of the more impactful retirement changes in the SECURE Act 2.0 summary below.
RMD Age Changes
The 2019 SECURE Act raised the age at which individuals must begin taking required minimum distributions (RMDs) from traditional IRAs and employer retirement plans from 70½ to 72. As a result of a provision in the SECURE Act 2.0, starting in 2023, the age at which individuals must begin taking RMDs increases from 72 to 73. On Jan. 1, 2033, the age for RMDs will increase to 75. In addition, the penalty for failing to take RMDs by year end is cut in half from 50% of the undistributed amount to 25%. Also, Roth accounts in employer retirement plans will be exempt from the RMD requirements starting in 2024.
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The estate planning process can sometimes seem a little overwhelming at first with all of the legalese and fancy words we are not used to hearing. When putting together a will, you will need to choose and name an executor.
Simply put, an executor is the person you choose to handle and settle your estate when you pass away. They are responsible for making sure all outstanding debts are paid and that your assets are distributed according to your wishes.
If you die without a will, the probate court will assign an executor (sometimes also called an administrator or personal representative) to distribute your assets according to state law
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Executors/administrators are expected to act in good faith in their duties and act on behalf of the interests of beneficiaries and creditors, also known as ‘fiduciary duty’. If an executor fails to perform his or her fiduciary duties, she or he may face a civil lawsuit.
What an Executor is Responsible For
- Locating the beneficiaries named in the will
- Giving notice to creditors of decedent’s death and paying all outstanding debts
- Identifying, protecting and managed the decedent’s assets
- Preparing and filing tax returns
- Accounting for all assets of the estate and any payments made
- Distributing the assets according to the terms of the will and state law
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Key Takeaways
- In 2022, inflation reached its highest levels in decades, resulting in higher market volatility, interest rate increases, and price declines across most asset classes.
- Value stocks, international stocks, and short-term bonds helped performance.
- At the end of the year, inflation trended downward, and bond yields were at their highest in years.
- The economy might enter a recession, but this could be a “soft landing” as the labor market appears ready to absorb potential job losses.
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Employee Spotlight ~ Let's Talk to the Team |
In this year's Employee Spotlight we will be asking fun questions to the entire team and sharing their answers in this section! |
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What is your favorite book? |
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Anything by James Patterson or Robert Ludlum |
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One Hundred Years of Solitude |
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Into Thin Air by Jon Krakauer
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The Giving Tree by Shel Silverstein |
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Isaac's Storm by Erik Larsen |
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Too many favorites to mention |
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When The Men Were Gone by Marjorie Herrera Lewis |
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Home Before Dark by Riley Sager
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Untamed by Glennon Doyle
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Running with Sherman: The Donkey with the Heart of a Hero |
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The Little Prince by Antoine de Saint-Exupéry
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Anything James Patterson
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Nikki Yates
Advisor Associate
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Anything historical fiction
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Greenlights by Matthew McConaughey |
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Dayton Smith
Client Service Associate
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Harry Potter - all 7 books |
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By David Booth, Chairman and Founder
One of the best things about markets is that they don’t have memories. They don’t remember what happened last week or last year. They don’t even remember what happened a minute ago. Prices change based on what’s happening right now and what people think will happen in the future.
People have memories. Markets don’t. And that’s a good thing.
It was an up-and-down year for markets—in the end, one with more down than up. The world gave financial markets a lot to process. The coronavirus pandemic eased but remained a global concern, as did the supply-chain issues that accompanied its arrival. Inflation reached a 40-year high in the US,1 and the Federal Reserve pursued a series of interest rate increases to combat rising prices, actions similar to those taken by other nations’ central banks. Russia’s invasion of Ukraine in February brought uncertainty about political stability and energy prices, among other worries. A midterm US election shifted more power to Republicans but left Democrats in a stronger position than some had expected. Against this backdrop, equity and bond markets fell for the year, despite several rallies.
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ML&R Wealth Management is Celebrating 25 Years!
1997 ~ 2022
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Subscribe to our 401(k) Plan Services Quarterly Newsletter |
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Are you responsible for administering your company's 401(k) plan?
Would you like more insight and resources regarding the retirement plan services industry?
If so, please subscribe to our 401(k) Plan Services Quarterly Newsletter. You can check out the last few issues below.
See our latest Retirement Plan Services articles:
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What's Happening in Austin Next Month |
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Family-Friendly Events
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About ML&R Wealth Management: |
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At ML&R Wealth Management, we take investing personally. Your ML&R Wealth Management advisor will work to develop a lasting relationship with you, keeping in touch to understand your changing goals and to provide an asset management strategy to help achieve them. Whenever you need sound financial advice, you have a direct line to a trusted advisor.
For over 25 years, we have served individuals, families, businesses, and nonprofits with wealth management services, custom retirement and 401(k) plans, and portfolio management.
We believe in accountability and transparency and operate as a fee-only advisor with fees calculated solely on assets under management.
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