The Markets (as of market close July 14, 2023) Wall Street enjoyed a positive week of returns, with each of the benchmark indexes posting solid gains, despite a marginal downturn at the end of last week. The financial sector began releasing quarterly updates last Friday as investors focused on the state of the banking industry. A few major banks reported increasing profits in the second quarter, while more data will be released this week. The Russell 2000, the Global Dow, and the … [Read more...]
Rescuing America’s Safety Net
A March 2023 survey found that more than 90% of Americans worry about the Social Security program, and about half of those said they worry a great deal.1 A separate survey the same month found that more than 80% of Americans worry Medicare will not be able to provide the same level of benefits in the future.2 These concerns are well-founded, because both of these programs — the cornerstones of "America's Safety Net" — face serious fiscal challenges that require Congressional action. And the … [Read more...]
The Debt Ceiling and Deficit Spending
On January 19, 2023, the outstanding debt of the U.S. government reached its statutory limit, commonly called the debt ceiling. The current limit was set by Congress at about $31.4 trillion in December 2021.1 On the day the limit was reached, Treasury Secretary Janet Yellen instituted well-established "extraordinary measures" to allow necessary borrowing for a limited period of time. While Yellen projects the extension will last until early June, the Congressional Budget Office (CBO) … [Read more...]
Taxation of Investments
It's nice to own stocks, bonds, and other investments. Nice, that is, until it's time to fill out your federal income tax return. At that point, you may be left scratching your head. Just how do you report your investments and how are they taxed? Is it ordinary income or a capital gain? To determine how an investment vehicle is taxed in a given year, first ask yourself what went on with the investment that year. Did it generate interest income? If so, the income is probably considered … [Read more...]
Retirement Investors Get Another Boost from Washington
Amid the 1,650-page, $1.7 trillion omnibus spending legislation passed by Congress last week and expected to be signed by President Biden were several provisions affecting work-sponsored retirement plans and, to a lesser degree, IRAs. Dubbed the SECURE 2.0 Act of 2022 after the similarly sweeping Setting Every Community Up for Retirement Enhancement Act passed in 2019, the legislation is designed to improve the current and future state of retiree income in the United States. "This important … [Read more...]
New Retirement Contribution Limits for 2023
Near-record levels. The Internal Revenue Service has released new limits for the coming year. After months of high inflation and financial uncertainty, some of these cost-of-living-based adjustments have reached near-record levels. Individual Retirement Accounts (IRAs). IRA contribution limits are up $500 in 2023 to $6,500. Catch-up contributions for those over age 50 remain at $1,000, bringing the total limit to $7,500. Roth IRAs. The income phase-out range for Roth IRA contributions … [Read more...]
Prepare Now for Future Emergencies
September is National Preparedness Month, part of an effort by the Federal Emergency Management Agency (FEMA) to raise public awareness and inspire disaster readiness. Most communities could be impacted by some type of natural disaster, whether it's a wildfire, hurricane, tornado, earthquake, or flood. Here are some tips to help keep your family safe in an emergency and allow you to leave quickly with the items you need most. Gather important documents that may be difficult or impossible … [Read more...]
5 Retirement Concerns Too Often Overlooked
Baby boomers entering their “second acts” should think about these matters. Retirement is undeniably a major life and financial transition. Even so, baby boomers can run the risk of growing nonchalant about some of the financial challenges that retirement poses, for not all are immediately obvious. In looking forward to their “second acts,” boomers may overlook a few matters that a thorough retirement strategy needs to address. RMDs. The Internal Revenue Service directs seniors to withdraw … [Read more...]
Inflation Reduction Act: What You Should Know
The Inflation Reduction Act, signed into law on August 16, 2022, includes health-care and energy-related provisions, a new corporate alternative minimum tax, and an excise tax on certain corporate stock buybacks. Additional funding is also provided to the IRS. Some significant provisions in the Act are discussed below. Medicare The legislation authorizes the Department of Health and Human Services to negotiate Medicare prices for certain high-priced, single-source drugs. However, only 10 … [Read more...]
Handling Market Volatility
Conventional wisdom says that what goes up, must come down. But even if you view market volatility as a normal occurrence, it can be tough to handle when it's your money at stake. Though there's no foolproof way to handle the ups and downs of the stock market, the following common sense tips can help. Don't put your eggs all in one basket Diversifying your investment portfolio is one of the key ways you can handle market volatility. Because asset classes often perform differently under … [Read more...]