Ladies and gentlemen, the weekend! In this space each week, Greg and I share some of our favorite articles, notes, and graphics from the past week along with our commentary. Please feel free to provide feedback and forward along to others if you enjoy. We appreciate you taking the time to read. 

If you are a client, we truly appreciate your business. If you are not a client, please click below to learn more about our firm and contact us.

CPA firm Reynolds, Bone & Griesbeck adds wealth-advisory

“Memphis-based Reynolds, Bone & Griesbeck is partnering with two veteran wealth-management advisers to launch a wealth advisory division.

Greg Davis and Tim Ellis, both Certified Public Accountants and Certified Financial Planners, have been tapped to head RBG Wealth Advisors, a fee-only, independent wealth advisory firm.

‘When you look at why we exist, it is to challenge and inspire our employees and clients to achieve their goals while creating lasting legacies,’ said Skeet Haag, a managing partner of Reynolds, Bone & Griesbeck. ‘What we were really missing was the last piece that (RBG Wealth Advisors) has.’”

The Daily Memphian featured our firm in a story this past week. Greg and I are thankful for the opportunity to spread the word about the new firm and how we can serve clients.

Fed's Powell Should Apologize to Americans

“‘The Fed’s talk and the tightening is so extreme’ that the risk of recession ‘is much higher’ than the odds the central bank will waffle on its inflation-fighting mission, he said. ‘The Fed’s tightening and their talk of super tightening has just pushed markets way to [the] extreme.’

Siegel has repeatedly denounced the Fed for what he and other critics consider a bungled delay in addressing inflation last year and for this year’s policy to tame soaring prices by aggressively raising the bank’s benchmark interest rate.

The finance professor cited signs that real prices, including home and commodity prices and freight rates, are coming down despite lagging official indicators that suggest persistent high inflation.

Meanwhile, the money supply, a clue to the inflation experienced over the past two years, recently has experienced the most protracted decline since World War II, according to Siegel.”

Professor Jeremy Siegel’s rant on CNBC about the Fed’s policy decisions was both entertaining and valid. The Fed may be proved wrong on both sides of the economic cycle – too loose for too long, which drove inflation to 40-year highs, and now too tight, too quickly.

One of his points was that monetary supply through Covid-related fiscal stimulus and the Fed’s quantitative easing measures can help explain some of the inflationary data. Money supply has now rapidly normalized while interest rates are rapidly rising. That creates a double whammy for the economy and capital markets.

Fed Chair Powell and FOMC members should be analyzing and basing decisions on leading and coincidental indicators and market-based data rather than their typical lagging personal consumption expenditures and labor market data. 

The Most Tax-Friendly States for Retirees

“As an individual begins planning for retirement, one of the factors often considered is whether (and where) they might relocate to enjoy their retirement. When evaluating their potential options across the U.S., a state’s income tax rules can have a significant impact on where they might choose to live. The perception of a state as having high or low taxes could make it more or less attractive for someone choosing where to relocate, and those perceptions are often skewed by the state’s ‘headline’ tax rate…

In reality, however, the top marginal rates don’t usually tell the whole story – at least not for retirees.

State tax breaks for retirees usually come in 4 flavors: no income tax at all; exclusion of Social Security income from taxable income; exclusion of pension or retirement plan withdrawals; and additional exemptions, deductions, or credits for all taxpayers above certain age thresholds. Every state in the U.S., plus the District of Columbia, features at least one of these types of tax breaks benefiting retirees…”

This was a good, detailed breakdown of state taxes for retirees. There is more that should go into the calculation than just a top marginal tax rate.

The average 30-year fixed mortgage rate increased to 6.7% this past week. The increase in interest rates translates to a 20% down payment, $2,500 monthly payment homebuyer can afford a $476,425 home, down from $758,572 in mid-2020.

Thanks for reading. Have a great weekend!