Category Archives: Retirement Planning

New Uniform Life Tables Gives RMD’s a Slight Break … You are a Few Years Younger in the IRS’s Opinion! YAY

As the calendar turned to 2022, those that are requited to take RMD’s (Required Minimum Distributions) from their IRA and or other qualified taxable accounts, became a few years younger in the eyes of the IRS! YAY !

New Uniform Table Makes You Younger

If you did not feel younger after the turn of the calendar to 2022, don’t feel bad, the IRS sees you as younger … maybe living 10% longer….

What Happened?

The IRS updated their mortality tables as can be seen HERE in this terribly formatted release:

III. Updated Life Expectancy and Distribution Period Tables

The life expectancy and distribution period tables in these regulations have been developed based on mortality rates for 2022. These mortality rates were derived by applying mortality improvement through 2022 to the mortality rates from the experience tables used to develop the 2012 Individual Annuity Mortality Basic Tables (which are the most recent individual annuity mortality tables). As was the case in the proposed regulations, the separate mortality rates for males and females in these experience tables, which were based on the 2000-2004 Payout Annuity Mortality Experience Study,[11have been projected from the central year of 2002 using the respective mortality improvement rates from the Mortality Improvement Scale MP-2018 for males and females.[12The mortality table in these regulations was developed by blending the resulting separate mortality rates for males and females using a fixed 50 percent male/50 percent female blend.

What does it mean?

All other things being relatively equal, you will not have to take as much out/(pay taxes on) the distributions of our qualified account, because the amount may be less … YAY … thereby making you younger in the eyes of the IRS, because we are all living longer!

So we are younger, don’t have to take as much of and RMD, which means less taxes? Yep… sign me up!

Have a Great ‘Living Longer, Less Taxes” Day!

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

Short Day, Long Holiday Weekend! , Great Topics Coming … Why Your RMD May Be Less than Last Year? … Back to Basics Part 2 … Inflation Analysis …

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!

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

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

Q1 2022 J.K. Financial, Inc. Newsletter … Video Audio Podcast Review ! By John Kvale CFA, CFP

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

Let’s get going! We hope you enjoy!

Q 1 2022 Newsletter

(YouTube)

Anatomy of a Slowdown/Recession

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!

IRAs2022202120202019
401(k), 403(b), Profit-Sharing Plans, etc.2022202120202019
Annual Compensation305,000290,000285,000280,000
Elective Deferrals20,50019,50019,50019,000
Catch-up Contributions6,5006,5006,5006,000
Defined Contribution Limits61,00058,00057,00056,000
IRA Contribution Limit$6,000$6,000$6,000$6,000
IRA Catch-Up Contributions1,0001,0001,0001,000
Traditional IRA AGI Deduction Phase-out Starting at2022202120202019
Joint Return109,000105,000104,000103,000
Single or Head of Household68,00066,00065,00064,000
SEP2022202120202019
SEP Minimum Compensation650650600600
SEP Maximum Contribution61,00058,00057,00056,000
SEP Maximum Compensation305,000290,000285,000280,00

We hope you enjoy … talk to you in 2022!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com

No Tax Law Changes for 2021, Same as 2020 … Last Minute Shoppers Watch Out, New Cyber Email

Of coarse …. the keyboard is calling even while out of the office with the 14 year old….

Felt this very important, and the WiFi is pretty good at this location!

Will keep it short, just two important items to tell you!

Washington Goes Home – No Tax Law Changes for 2021 – All Bets Off for 2022

Late last week it was agreed that the House and Senate would adjourn for the year, pushing any tax law changes that you may have heard (there were A LOT… remember often noise) as a 2022 issue!

With some new research ears on the ground in Washington, we hear there may be relief for the SALT tax cap … but never a guarantee on rumors…

On a personal self serving note, WHEW …. the Newsletter can finally not be smacked at the last minute and need to be completely redone … let our New York based printing presses begin … it is done! Yay

Last Minute Cyber Shoppers LOOK OUT – Clever Spam Email

In the span of two days the family received very clever spam emails from the following, each with an enticing link to click…. DO NOT BITE:

  • Home Depot Confirmation – But we did not make an on-line purchase and thankfully did not click on the hot link to the fake “Receipt”
  • Ace Hardware – This one was easier as we have not made any purchases at this establishment, BUT the format of the email was the same as the above HD
  • Best Buy – We have made Holiday purchases at BB (14 year old) but thankfully the email contained only “Best” and no Buy in the header, but the spam email address looked to come from BB

Have a Great “No Tax Changes and Don’t Click Bite” Day!

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

Bond Markets and Participants Say Raise Rates Mid 2022, FOMC Says WAY later (EOY 2022), Who is Correct?

Why this is important? Bond Markets are signaling a much faster interest rate increase(s) than Fed Speak… Someone is going to lose this game of chicken… Only time will tell us who?

Frequently, Wall Streeters (my nick name) are quoted as saying the smartest guys in the room are the Bond Markets/Participants.

Some of this rhetoric comes from the simplicity of a bond. Basically you have a time to payback (term) and risk of the asset (Quality i.e. Aa to junk).

With less to focus on, bonds and their players/participants are thought to have greater clarity…. However, in recent years (working on a decade now) the FOMC (Federal Open Market Committee) led by Jerome Powell currently, have been making direct purchases of bonds, causing possible distortions and lack of true free market discovery….

Well Maybe!

Recent Two Year Treasury Yields Rise Dramatically

Throwing water on the theme that the FOMC has taken TOTAL control of the bond market, this recent move in the 2 year treasury is signally to the FOMC by bond folks, they expect (and want) rate hikes sooner rather than later….. Hmmmmm

CME (Chicago Mercantile Exchange) FOMC Watch Tool

This neat CME Fed Watch Tool … overlays the current interest rates with a graph to show an expected increase time probability…

The way to read this chart is the orange represents the chance of a FOMC rate increase… March of 22 showing about a 20% chance of a FOMC rate increase….

Push forward to June 22, just two months later, and the probability of at least a .25% increase moves to about 80%!

The thing is, the FOMC is saying maybe one increase very late next year (2022), but certainly not the bond market/participants.

Wait too long and the FOMC may miss their chance to raise … raise too early (not likely at this time) and it could cause an unexpected headwind for the economy.

Let’s grab some popcorn and see who wins this tug of war!

Have a Great “Fed versus Bond Market” Day!

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

November 2021 Financial Planning and Capital Market Review – By John Kvale

Hello and Welcome to our November 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!

Break In: The Brain is at it again….

Some very nice publicity for Donald, aka “The Brain” here in this post along with a neat link to the industry article.

November 2021 Video

YouTube

Financial Planning Tip(s)

New Retirement Limits

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.

All of this from a handy IRS announcement found here at this link.

Capital Market Comments

TSA Throughput Update

One of our favorite monitoring of information is the individual TSA numbers that check passengers at the point of entrance.


Here in this post we discuss the latest updates and take note of the TSA’s new easier to graph for us, formatting… NICE!

Have a Great Day, Talk to You at the End of December!

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

401k Plans Year 2022 Limits ($20,500 + $6,500 Catch Up), IRA Stay Same ($6,000 + $1,000 Catch Up) … Hmmm?

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:

  • $6,000 ($7,000 if you’re age 50 or older), or
  • If less, your taxable compensation for the year

Traditional IRAs

  • 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:

2022

2021

Roth IRAs

This table shows whether your contribution to a Roth IRA is affected by the amount of your modified AGI as computed for Roth IRA purpose.

If your filing status is…And your modified AGI is…Then you can contribute…
married filing jointly or qualifying widow(er)< $204,000up to the limit
singlehead of household, or married filing separately and you did not live with your spouse at any time during the year< $129,000up to the limit

Have a Great “Year 2022 Retirement Limits Update” Day!

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

Donald Capone aka “The Brain” Interviewed Again for his Expertise … Well Done “DC” !

Those of you that have ever been on a call with “The Brain” (aka Donald) ….and have heard him clicking the keyboard doing scenario analysis, such as exact tax implications post a move as well as detailed allocations and historical analysis, may wonder how he has all of this information at a moments notice….

The technical name is IRebal, a super powerful portfolio and investment tool! Donald has mastered the program, helped update the views and also given valuable input on the most important future direction of the tool…..

Donald “The Brain” Gets Flattering Publicity

This is directly from a major industry publication Wealth Management

“The landing page [of the dashboard] tells you all the info you need right off the bat … and allows you to make that quick decision on a visual level and ask yourself ‘do I need to dig into something deeper?’ That ‘yes’ or ‘no’ just did not exist in the old view,” said Donald Capone, the main portfolio manager in the two-advisor shop of J.K. Financial, Inc. based in Dallas. In the older version, getting to that step required him to run a seperate query. 

He said that the firm used the right term when calling the re-design of the interface a “modernization.”

“It definitely looks like you would expect it to now—it’s doing the exact same thing we’ve been doing with it from the beginning but now it matches with what expectations are of what software should look like these days,” said Capone. That should make it easier for new users to adopt the tool, he said. 

“It looks more inviting, less daunting,” he said of the new grid interface, which allows advisors to drill down more deeply right from the screen without losing their place and having to navigate back. There are also improved filtering features and simpler navigation, he said.

Well done Donald, just great!

Have a Great “The Brain Does It Again” Day!

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

Holiday Venue Preview Video VERY NICE Redo, RMD Season, 401k Max Season, Birthday Boy, Friday …

Just by accident, over the weekend the family happened to end up at our Holiday Venue, Dallas Athletic Club (Recall November 20th from 3-5pm) and there was a soft opening of our venue to work the bugs out….

The official opening was Tuesday of this week as an email went out to the entire membership…

Hoping the weather will be nice AND if so, anyone that desires an indoor/outdoor venue, we have you covered… check out the video!

Nice!!!

Hope You Can Make it!

RMD – Required Minimum Distributions Commence

For the great majority that may begrudgingly take those RMD’s, tis the season, we will begin in the coming weeks!

We want to make sure we stay well ahead of any year end disruptions…

401K Maximization Season

In maybe a tit for tat from the afore mentioned RMD, now is a good time to review our retirement contributions for maximizations…

Let us know if you need help, we have systems set up for easy calculations…

Birthday Boy Weekend

Those followers know I frequently end my post with “Spend time with those important in your life, it goes fast!”

Tomorrow he turns 14 – Recall Crazy Over Halloween Family

Ahhhh…but today is a Friday… You know the drill from above…. Talk Next Week!

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