In true Gomer Pyle like, “Surprise, Surprise, Surprise” Like fashion….. the US shutdown was averted with some come together votes on Saturday…. Here from AP
We will be watching interest rates for relief…. which is what would be expected!
Capital Market Comments
Meet the Koyfin – A Bloomberg Competitor
With so many options of services over the years, and having tried almost all…. we are careful to embrace new systems, but we never avoid….and constantly try to improve…
Hello Koyfin – Very comprehensive, and most importantly very clear in showing information!
Have a Great Day, Talk to You at the End of October !
Debt Ceiling/Government Shutdown …. Yaaa, yaaa… it may seem like we have been here before….
That is because we actually have, as mentioned here on May 26, 2023 – just a few months ago… We were in a Debt Ceiling Government showdown that was … as expected, kicked down the road….
Welcome to our Video and Audio Podcast Review of our Q4 2023 Newsletter. For those on the road or just unable to grab the time to read, our podcast type review gives you the behind the scenes insight to our thoughts, observations and deep views of the entire Newsletter.
Click the Download button below, for a direct link to an electronic version (an early peek-good ole fashion paper versions are on their way to you shortly) and here for our Newsletter page
Rate Increase GOOD for Pension Plans and Pension Recipients
Special thanks to Milliman and Rebecca head of medial relations for allowing us the ability to reference this fantastic data… also sourced at the end of our post/article.
Here are the top 100 pension plans, a lot of names you likely know and maybe even have a pension with… At least one family member included in this.
With higher interest rates, something we have mentioned numerous times… Notice because of a rather complex future liability projection, pension plans for the most part are FINALLY funded….YAY
Don’t Fight the Fed! Wait, are we Fighting the FED? YEP
This unusual correlation especially when the blue line is going down, represents the FED (Federal Open Market Committee) pulling money from the economy or trying to slow the Economy.
Add higher rates, at the fastest pace ever….
Interesting that participants are fighting the FED, even though they regularly quote “Don’t Fight The FED!”
Stimulus still sloshing around in the Economy…
True-Up Reminders – 401k and the Like
In the year 2023 (Currently heading towards a close) the maximum amount WE (not including matching) can contribute is $22.500 and for those either age 50 or older or turning age 50 happily in 2023, you get a nice catch-up amount of $7,500 bringing your deferred amount to a whopping $30,000!
Pro-Tip – Contribute evenly throughout the year, with a terminal amount of maximizing in late November or early December.
Pro-Trick – Similar to rushing/upping your contributions near the end of employment to maximize levels, if you are new to an employer and wish to maximize your contributions for the year, dump all you can to maximize your contributions now, with the intention of dropping that contribution level down to a normal level (see Pro-Tip above) after the turn of the calendar.
Do Not Overfill Duplicate Plan Years
Remember, if you have contributed to a plan earlier in the year via another employer, your new employer will not be able to throttle your contributions back if you happen to go over the total annual limit. Reach out for help and clarity on this!
Be Aggressive in New Plans
Lastly, in new plans, starting from scratch with new contributions, allocation should be wide open and aggressive with the hope of choppy entry points as your contributions make up the majoring of the plan and will take advantage of the ups and downs in the early years of the plan.
Cyber Reminder- Tips and Tricks
If there’s one thing, for those of us with little time or patients for a long read that we would like you to take from this article it is that most cyber intrusions come from an e-mail that has a bad actor with a hot link click, do not click on that bad hot link!
The second thing and more encouraging, most cyber security situations are not extremely complicated and are allowed by a simple letting of our guards down- see above point!
Handy tip #1– Use an only known to you, phrase or password.
Handy tip #2– Do not ignore the recommended updates!
USB/Pen Drives a No No Avoid the USB/pen drive at all costs unless you absolutely, 100% know where it came from
RMD Age Changes and other Important Dates
RMD (Required Minimum Distributions)
One of the most important and likely most confusing due to the recent multiple updates is the adjustment of Required Minimum Distributions (RMD) They are now mandatory to commence for those aged 73. Those turning 75 after 2033, your new RMD age is 75. Recall, these just a few years ago, moved from age 70 1/2 to 72, now to age 73 and eventually age 75. No wonder we are all confused!
Social Security Mandatory Commencement Date reminder age 70
The current maximum age that you may defer commencement of Social Security still remains at age 70, well below the new younger thresholds that we hopefully are all feeling.
The earliest one may take Social Security remains age 62, with a 25% discount to the full retirement age (FRA) benefit amount AND has a maximum earnings level of $21,240 from W-2 or 1099 (working income) not pension, investment or other non working types of income.
Have a Great Fall! Talk after the turn of the Calendar!
This is an abbreviated article coming in the Q 4 2023 Newsletter … Important enough, we wanted to have its’ own airtime for future reference and emphasis.
The Secure Act 2.0 completed in very late 2022 made adjustments to many age-related “Line in the Sand” important dates as well as some other peripheral and yet undetermined information.
RMD (Required Minimum Distributions)
One of the most important and likely most confusing due to the recent multiple updates is the adjustment of Required Minimum Distributions (RMD) They are now mandatory to commence for those aged 73. Those turning 75 after 2033, your new RMD age is 75. Recall, these just a few years ago, moved from age 70 1/2 to 72, now to age 73 and eventually age 75. No wonder we are all confused!
Bottom line, current earliest required minimum distribution is age 73 until the next scheduled change, if not sooner, in 2033.
RMD Practice Reminder – While you may have many different IRA type of accounts (consolidating is always best, but not always possible) you need only take your mandatory RMD amount in total, no matter the account(s) they come from. Said another way, Uncle Sam does not care which accounts your RMD’s come from, as long as you take the minimum amount needed, as he really wants in taxes on those untaxed funds.
Social Security Mandatory Commencement Date reminder age 70
With 75 being the new 65 it is not surprising that many people are choosing to work longer, happily and healthily adding to society in a peak knowledge chapter, and pushing their Social Security commencement day off accordingly. There are many reasons to start Social Security early, on your full retirement age, or wait until that last possible moment. The current maximum age that you may defer commencement of Social Security still remains at age 70, well below the new younger thresholds that we hopefully are all feeling.
The earliest one may take Social Security remains age 62, with a 25% discount to the full retirement age (FRA) benefit amount AND has a maximum earnings level of $21,240 from W-2 or 1099 (working income) not pension, investment or other non working types of income.
Have a Great “Less Confused Important Age Date Reminders” Day!
Our second lead article in the coming Newsletter is Titled “Don’t Fight the Fed” …
The general context is, the FED (Federal Open Market Committee) led currently by Jerome Powell have great control through interest rates (there it is again- they really are that important) when they lower eventually it becomes stimulus, and raise, headwinds….but this time with stimulus still sloshing around in the Economy… participants are being stubborn and fighting the FED
Next week marks the first travels of the season…while not a Road Warrior, travels are enjoyable, this years have started a bit later due to the Merger…. but the anticipation is just as great ….
Ahhhh…. Today is a Friday…. Fall is beginning to find it’s way to our neck of the woods…. Enjoy and Talk Next Week… Likely a Newsletter and Video coming!
With Copyright approval just this Monday – we can finally bring this great information to you- yay
While it may seem like we talk about interest rates and their effects constantly, there are very few things especially in the shorter term that effect an economy more and therefore economic growth and capital markets.
Good News for Pension Plan Owners and Recipients
In this higher interest rate environment, we have some really good news for not only pension plan recipients but the owners of pension plans as well. Higher interest rates help pension plan funding (see periodic table looking chart for the top 100 pension plans), in the forum of what’s called smaller present value obligations (PBO). While we understand the calculus of this equation it’s far too difficult to explain in this context but from a very high level, higher interest rates the effect of computation of PBO and the higher the rates, the lower the funding amount needed.
Said another way, pension plans generally hold large amounts of bonds and bonds are earning more now.
By taking a look at figure 3 from the fantastic white paper of Milliman, it’s easy to see that in 2007 the slashing of interest rates to levels never seen before caused a dramatic loss in pension plan funding. Not only did this funding drop but again by referencing the chart it’s easy to see that this was almost a 1 1/2 decade hurdle that pension plans fought against to regain their funding level.
Fast forward to today, again our Chart 3 favorite, shows pension plans are making a strong comeback in their obligations and with interest rates higher look to be fantastically and happily funded. This should be comforting to corporate pension plans (again looking to our periodic chart for those) that likely are breathing easier, and this should also be comforting from those pension plan recipients that maybe had concerns on the long term funding ability of their plan.
Given the full funding of Pension plans, we would infer the lump sum window may be closed! Those lucky enough to have offers over the last decade and a half, well done!
Have a Great “Funded Positive Interest Rates Pensions” Day!
On Wednesday of this week, an entrance into the office garnered Jen’s computer running a virtual visit along with Q&A’s on the Merger….with her taking notes on important updates and points..
Donald “The Brain” had just gotten off of a research call and was crossing the Teams Chat with a couple of updates and thoughts…
Early that morning on the way out to start a jog, a neighbor, fellow advisor and long time friend pulled up in his vehicle…. We both had to lower our volumes, he was listening to a financial podcast and I had one going via my cell on my Air Pods….
It is fun, lucky and very gratifying to have such enthusiasm and great experiences with what we are lucky enough to call “Work!” But that is not really the correct description….
Of course, it is not all puppy dogs and rainbows, but is most of the time! Thanks to you guys….
Today is a Friday …. Enjoy your day and your weekend…. Talk Next Week!
With the final editing of the Q 4 2023 Newsletter in process… an article included in is Cyber Security from a half day seminar late spring….
From the Newsletter Article..
If there’s one thing, for those of us with little time or patients for a long read that we would like you to take from this article it is that most cyber intrusions come from an e-mail that has a bad actor with a hot link click, do not click on that bad hot link!
The second thing and more encouraging, most cyber security situations are not extremely complicated and are allowed by a simple letting of our guards down- see above point!
It Happens to the Best of them – MGM Resorts
Monday morning, during a regular research call, it was noted MGM had been taken down via a hacker… maybe a bad loser… but who knows…
This from the site early am Monday… for all of MGM at the time…
Oh my…just checked it again… YIKES!
Snapshot taken 9-12-23 at 8:44 PM
Cannot imagine the lost revenue from this hack… WOW!
On Tuesday, some point-of-sale locations couldn’t process credit card transactions at MGM’s retail outlets, and in-resort ATMs were offline. Some guests complained that they couldn’t get into their hotel rooms because the MGM app was off. The company has since remedied that problem by issuing key cards. MGM’s websites and mobile app remained down on Tuesday.
Literally during the weekend of Newsletter writing/dictating/thinking… our friend Peter Diamandis nice blog hit our in box during a break from the writings….
We are really big fans as long time follower may know, these first two writings were done in 2015 after seeing Peter at a convention, prior to reading several of his books see our writings: HERE (2015), HERE(2015),HERE, HERE, HERE,HERE, and finally HERE
Here are the high points from the blog, but the above title is hot linked to the post…
1. Who You Hang Out With… Your Community
Have you heard the saying that you’re the average of the 5 people with whom you spend the most time?
Curating your social group, who you’re hanging out with and who you’re having conversations with is critical. It’s one of the most important investments you can make in training an optimistic and Abundance Mindset—it shapes who you are and who you’ll become.
2. Your Physical Environment
The second key element that you can control as you develop your Abundance Mindset is your surroundings—everything from the music (harping on the 15 year old on this one) you listen to and the brightness of you room, to what you hang on your walls.
3. What You Watch & Read
Let’s now turn to the third element under your control—what you watch on TV or read in the newspapers.
Our version of this, is Breaking News… but you guys get the point….
Thanks Peter for a great rest from a lot of authorship this weekend!
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments may be appropriate for you, please consult your financial advisor prior to investing!
Background
The is the vocal portion of J.K. Financial, Inc. a Dallas Texas Based Fee Only Total Wealth Financial Planning Firm. Founded by John Kvale, a Dallas Texas Fee only Financial Planner and Total Wealth Manager.
September 2023 Audio Video Review – Break In – Merger Update – Shutdown Averted, For at least 44 Days – Meet the Koyfin – Financial Planning and Capital Market Review – By John Kvale CFA, CFP
Hello and Welcome to our September Financial Planning and Capital Market Update!
If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast audio format as well as Video!
Break In: Merger Update: Good News – Little surprises
Its all good,…. main changes are as follows:
Newbies –
We like to articulate our thoughts and review on a Monthly basis our Financial Planning Tips, Capital Markets thoughts and current events!
Hope you enjoy!
September 2023 Video
YouTube
Financial Planning Tip(s)
US Shutdown Averted -For 44 Days at least
In true Gomer Pyle like, “Surprise, Surprise, Surprise” Like fashion….. the US shutdown was averted with some come together votes on Saturday…. Here from AP
We will be watching interest rates for relief…. which is what would be expected!
Capital Market Comments
Meet the Koyfin – A Bloomberg Competitor
With so many options of services over the years, and having tried almost all…. we are careful to embrace new systems, but we never avoid….and constantly try to improve…
Hello Koyfin – Very comprehensive, and most importantly very clear in showing information!
Have a Great Day, Talk to You at the End of October !
John A. Kvale CFA, CFP
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Posted in Audio, Economy, Education, General Financial Planning, Investing/Financial Planning, Market Comments, Monthly Review, Podcast, Video
Tagged John Kvale, Koyfin, Monthly Review, Shutdown Averted