Long time followers have heard of times when the subject matter gets tough… Some Call it Writers Block, think it more Writers Fatigue… haha
Maybe it is the turn of the calendar… maybe excitement from new research and technology we have acquired…. No matter, the post subject glass is VERY full! Looking forward to delivering to you!
Short Day, Long Weekend
With most of our gang out at noon today, we will be following suit for the safety of fellow patrons on the streets!
Early release is due to the Monday honoring of MLK day, which means Capital Markets, Banks, Government entities and our office will also be closed… Enjoy!
Not to worry, with LOTS to talk about we look forward to sharing!
Have a Great Friday and super long Holiday Weekend!
First In Back to Basics Series – “The Emergency Fund”
In the inaugural post of a neat (well we think so) new idea, here in our Back to Basics series we discuss the all important Emergency fund.
This series is a review of the basics, and will serve as somewhat of a semester study of the Financial Planning foundations all the way to more advanced topics later in the series…. We plan on a mid month release of each part and somewhere south of double digit parts…. possibly with a video added to each for additional insights…. thanks in advance for sharing with those who may find this series helpful….
With the FOMC holding rates low currently, we remind that the Emergency fund is NOT investment funds, and as such may earn little if any interest in the current environment…. but that is ok, it needs to be safe, safe safe and very liquid!
We also discuss the size of the Emergency fund, depending on your situation!
FHFA Raises Conforming Mortgage Loan Amount
This post came to us due to the much larger than normal increase in the confirming (non-jumbo) loan increase amount. We have spoken at length on inflationary increases in a variety of assets, this includes homes and this much larger than normal increase in the non-jumbo Mortgage amount to $647,200 will be helpful in allowing more entry to many into the Residential Housing market, here is the actual article. and here is the link to the FHFA announcement…..
Capital Market Comments
Interest Rates and the FOMC – On Two Different Pages at Time of Post
With such importance on interest rates, the possible raising of the rates and the FOMC’s (Federal Open Market Committee) adjustment of rates…..
This post on FOMC’s rate increases, versus what the Markets are pricing in, was at the time very different. With Markets pricing in an increase in mid year of about 20% and AT THE TIME FOMC members saying a late 2022 if at all increase.
Fast forward to today and both the markets and the FOMC are saying a 60% increases in the Fed funds rate around March may be in the cards…. hmmmm
Have a Great Day, Talk to You at the End of January!
Welcome to our Video and Audio Podcast Review of our Q1 2022 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
In our main article, we review the last three drawdowns/slowdowns/recession for examples of how fast they occurred and the extremely fast recovery as can be seen by the main graph below.
We are not calling for a major slowdown/recession or the like, but we wanted to remind ourselves as well as everyone else, the last three drawdowns were not normal.
Longer drawdowns are the norm, and in the Newsletter Article we also go deeper into the Great Financial Crisis of 07-09, which was also not normal… it was much larger and much longer than the normal.
The past decade and a half have had it’s scary moments, but they did not last very long and were quickly attacked by the FOMC (Federal Open Market Committee) to give support in the system, fortunately very successfully. This may not always be the case, hence a reminder of the Umbrella use during sun shining times!
New Retirement Contribution Maximums, Best Practice, Tips and Tricks
The new retirement maximums are out at the IRS Website .
Again in our Newsletter article we remind those of smooth contributions throughout the year, UNLESS you have knowledge that may have you severed from your 401k some time during the year, in which a neat trick is to accelerate you contribution level in order to max that 401k out before you leave!
IRAs
2022
2021
2020
2019
401(k), 403(b), Profit-Sharing Plans, etc.
2022
2021
2020
2019
Annual Compensation
305,000
290,000
285,000
280,000
Elective Deferrals
20,500
19,500
19,500
19,000
Catch-up Contributions
6,500
6,500
6,500
6,000
Defined Contribution Limits
61,000
58,000
57,000
56,000
IRA Contribution Limit
$6,000
$6,000
$6,000
$6,000
IRA Catch-Up Contributions
1,000
1,000
1,000
1,000
Traditional IRA AGI Deduction Phase-out Starting at
We had been very excited to show you this, but needed Copyright approval first.
A very timely update to our end of the week CPI analysis.
Last week we finally got Copyright approval….
So here we go!
National Rental Costs from Apartmentlist.com
We have been hearing of rent increases, but did not have a great way to track it. After running across the fantastic Apartment site at www.apartmentlist.com, which has over 5 million apartments and counting for rent, and they are collecting data.
The following is the National Average from 2017 to present. More specific geographic areas are available, but we wanted to use the broadest measure.
Rising rent costs are an understatement, the move from the beginning of the year is approaching 30%…. yep a 30% increase in rent, NATIONWIDE
With Shelter being such a large portion of not only the CPI, but many families expenses, this is worth watching closely!
About three hours ago, the BLS (Bureau of Labor Statistics) released their November 2021 report on CPI (Consumer Price Index) one of the broadest measures of Inflation…
If you have noticed your grocery basket smaller and more expensive, this is why….
This report has a ton of factors in it, as can be seen at the top of the chart from the BLS report, below….
The year over year print was 6.8% increase!
A very large portion of the CPI is Energy…
Have you noticed a LOWER bill to fill your tank lately?
The BLS report is lagging, below is a current Oil price, which is over 10% LOWER currently… hence the cheaper refills…
Very likely peak in CPI as measured by the BLS, next month which will be released in early January, we will take a peak and keep you updated…
Ok, another slightly heavy Friday, BUT the FOMC is watching this very closely and making decisions based on this increase, which may be peaking/lagging already…. Let’s stay tuned!
We are certainly not recommending these as an investment, but we are watching the development of NFT’s and as such, thought it worth giving you a little background on them… of course a great chart from our friends at Visual Capitalist set us on our way….
Warning: Financial Bottlenecks are ….. well getting MORE bottlenecked
Do not procrastinate on transactions, especially ones planned, like donations, tax issues, account adjustments or necessary known in advance needed movement of money…
Do it now and avoid the stress if at all possible!
Ok, back to our regularly scheduled, a bit heavy Friday Post: FHFA Stunning Value Increase
A conforming or NON-jumbo Mortgage loan tends to have easier qualification terms, lower rates and lower down payment options … Of course each situation is different, but just on the normal margin, the preceding tends to be true…
On a side note, just really enjoy the connections of the dots via our Government Agencies…OK, Digressing…
FOR IMMEDIATE RELEASE11/30/2021
Washington, D.C. – The Federal Housing Finance Agency (FHFA) today announced the conforming loan limits (CLLs) for mortgages to be acquired by Fannie Mae and Freddie Mac (the Enterprises) in 2022. In most of the U.S., the 2022 CLL for one-unit properties will be $647,200, an increase of $98,950 from $548,250 in 2021.
Prior Year Release of 7.5%
Fannie Mae and Freddie Mac Baseline Limit Will Increase to $548,250
FOR IMMEDIATE RELEASE11/24/2020
Washington, D.C. – The Federal Housing Finance Agency (FHFA) today announced the maximum conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac in 2021. In most of the U.S., the 2021 maximum conforming loan limit (CLL) for one-unit properties will be $548,250, an increase from $510,400 in 2020.
Some takeaways:
Great for homeowners as they fight higher prices
Especially for possible new young homeowners that would not have otherwise qualified
Inflationary?
Possible, another, not cheap asset class
Did not mean to get all heavy on a Friday, but thought it worth noting……
Have a Great Friday, Super Weekend and Talk Next Week!
In this post titled “401k Plans Year 2022 Limits ($20,500 + $6,500 Catch Up), IRA Stay Same ($6,000 + $1,000 Catch Up) … Hmmm?” We go over the new limits and discuss why the catch up provisions are staying the same… the Hmmm part!
We go over not only the 401k and similar limits, but also the IRA and Roth limits and catch up provisions as well.
BREAK IN – Financial Processing Bottlenecks Continue
We mentioned earlier, but want to reiterate that we are seeing slowing of processing especially manual (think human touch processes) as we near the end of the year.
DO NOT PROCRASTINATE any unique financial transaction as there is likely a slow player somewhere in the Financial Food chain! Curve balls happen, but really try to anticipate any unusual Financial movements you may have from here to years end… it will make for a much less stressful ride to the finish line!
Party, it’s a Party Party – Tomorrow DAC 3-5 pm
We look forward to seeing all of you at the party tomorrow at DAC from 3-5 PM…
We lucked out on the weather and as such will have an indoor and outdoor area to meet and greet… Moving closer to Norm once again! YAY
Crooks are NOT on Holiday
As mentioned here, the travel schedule has happily fired back up, for the record in a very quick time…
With a two day turnaround trip to another state about two weeks ago, the large Fraudulent charge was not a surprise and caught immediately….
The second immediate charge of slightly different amount but to the same company slipped through the cracks as a slow processing of the original charge…. Well done there Mr. Crook…. but no harm done…
Needless to say, the Crooks are out in full force…. Oh… and for the record a new Travel Only Card is in the works for just this type of defense …
Friday Before Thanksgiving Week – Office Hours
Ahhhh…. Today is a Friday heading into a Thanksgiving Day Week…
With the kids off the ENTIRE week for the first time ever, we will be loosely covering the office in alternating shifts, thanks to tethered technology… (None of us are 100% on where we will actually be, thanks again Mr. Technology!)
Expect MAYBE one last posting of the most popular video EVER, Blooper’s Happy Thanksgiving!
Have a GREAT Friday, enjoy your day, weekend, and restful Holiday Week Next Week!
Great News for corporate and similar retirement plans as we get a 5% (actually 5.13%) bump in contribution limits…yay
Not sure what happened to the cost of living adjustments (COLA) for regular IRA’s, Roth’s and our catch up provisions as they are stuck once again at the same levels? Maybe they are only going to increase them every four years which puts an increase next year? Maybe they (IRS) does not want to confuse us? Either way, here are the updated rules from the IRS latest release for year 2022 !
The following from this IRS.GOV announcement and hot links are live back to the IRS website if you have deeper questions on each subject!
Deferral limits for 401(k) plans
The limit on employee elective deferrals (for traditional and safe harbor plans)is:
$20,500 in 2022 ($19,500 in 2021 and 2020; and $19,000 in 2019), subject to cost-of-living adjustments
Catch-up contributions for those age 50 and over
If permitted by the 401(k) plan, participants age 50 or over at the end of the calendar year can also make catch-up contributions. You may contribute additional elective salary deferrals of:
$6,500 in 2022, 2021 and 2020 and $6,000 in 2019 – 2015 to traditional and safe harbor 401(k) plans
Deferral limits for IRA Roth
For 2022, 2021, 2020 and 2019, the total contributions you make each year to all of your traditional IRAs and Roth IRAs can’t be more than:
Retirement plan at work: Your deduction may be limited if you (or your spouse, if you are married) are covered by a retirement plan at work and your income exceeds certain levels.
No retirement plan at work: Your deduction is allowed in full if you (and your spouse, if you are married) aren’t covered by a retirement plan at work.
These charts show the income range in which your deduction may be disallowed if you or your spouse participates in a retirement plan at work:
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.
$treet-¢ents 
December 2021 Financial Planning and Capital Market Review – By John Kvale CFA, CFP
Hello and Welcome to our December 2021 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!
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!
December 2021 Video
YouTube
Financial Planning Tip(s)
First In Back to Basics Series – “The Emergency Fund”
In the inaugural post of a neat (well we think so) new idea, here in our Back to Basics series we discuss the all important Emergency fund.
This series is a review of the basics, and will serve as somewhat of a semester study of the Financial Planning foundations all the way to more advanced topics later in the series…. We plan on a mid month release of each part and somewhere south of double digit parts…. possibly with a video added to each for additional insights…. thanks in advance for sharing with those who may find this series helpful….
With the FOMC holding rates low currently, we remind that the Emergency fund is NOT investment funds, and as such may earn little if any interest in the current environment…. but that is ok, it needs to be safe, safe safe and very liquid!
We also discuss the size of the Emergency fund, depending on your situation!
FHFA Raises Conforming Mortgage Loan Amount
This post came to us due to the much larger than normal increase in the confirming (non-jumbo) loan increase amount. We have spoken at length on inflationary increases in a variety of assets, this includes homes and this much larger than normal increase in the non-jumbo Mortgage amount to $647,200 will be helpful in allowing more entry to many into the Residential Housing market, here is the actual article. and here is the link to the FHFA announcement…..
Capital Market Comments
Interest Rates and the FOMC – On Two Different Pages at Time of Post
With such importance on interest rates, the possible raising of the rates and the FOMC’s (Federal Open Market Committee) adjustment of rates…..
This post on FOMC’s rate increases, versus what the Markets are pricing in, was at the time very different. With Markets pricing in an increase in mid year of about 20% and AT THE TIME FOMC members saying a late 2022 if at all increase.
Fast forward to today and both the markets and the FOMC are saying a 60% increases in the Fed funds rate around March may be in the cards…. hmmmm
Have a Great Day, Talk to You at the End of January!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents
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Posted in Audio, Back to Basics, Clients/Clients Only, Education, General Financial Planning, Investing/Financial Planning, Market Comments, Monthly Review, Podcast, Retirement Planning, Video
Tagged CME Fed Watch tool, FHFA, FOMC, Interest Rates, Jumbo Morgtgage, Retirement Planning