Greetings!
Welcome to our summer newsletter!
The investment markets have continued their recovery so far this year. As of the close on Thursday, July 20, the S&P 500 is up more than 19% for the year, international developed markets are up over 14%, and the broad bond market index is up a little over 2%.* The markets have proved remarkably resilient weathering the bank crisis, inflation, fed rate increases, debt ceiling drama, global tensions, and more. It's another year that reminds us of the unpredictability of the investment markets and the importance of staying invested even when there's a lot of uncertainty.
For workers 50+ making more than $145,000 per year, this is the last year you can do your 401(k) catch-up contributions pre-tax. Beginning next year, catch-up contributions for high earners will need to be Roth. It's still beneficial to you to make catch-up contributions rather than shifting the savings to a brokerage account; it just means your current tax bill will be a little bit higher. There's a lot of lobbying going on now to get the deadline extended because employers say they can't get ready in time, so we'll stay tuned to see what develops.
If you inherited an IRA in 2020 or later, the IRS announced last week that they will again waive penalties for not taking a required minimum distribution (RMD) in 2023 (as they also did for 2021 and 2022). That means that you get another year where you don't need to take an RMD, but it doesn't mean you shouldn't take one. The entire balance will still usually need to be distributed within 10 years, so it's the perfect opportunity for a little tax planning to ensure you don't pay more than necessary.
Our team has some fun updates. Sterling Gray, CFP® joined our financial planning team and relocated from Houston to be near our office in Keller. To learn more about Sterling, please visit the "Meet our Team" page. And congratulations to Thomas Warkins, our operations associate, who successfully passed the CFP® exam this month on his 1-year anniversary with the firm!
If updating your financial plan is on your to-do list, it may be helpful to know that we are usually scheduling at least a few months out. However, we also understand that unforeseen circumstances can lead to reschedules, creating last-minute openings. To make the most of these opportunities, simply have your financial records prepared when you call to schedule your appointment. By doing so, you can express your interest in securing an earlier slot if any become available. We appreciate your proactive approach to planning and enjoy assisting you with your financial goals.
As you may be aware, the transition from TD Ameritrade to Schwab is occurring over Labor Day weekend. If you have any questions or concerns about this transition, please let us know.
Please read on for other actionable planning ideas. We will be closed for Labor Day (Monday, September 4th). We plan to send the next newsletter out in mid-October. We'd love to hear from you on questions or suggestions for topics you’d like to see covered in the future.
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