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!
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!
Welcome to our Video and Audio Podcast Review of our Q3 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
Let’s get going! We hope you enjoy!
BREAK IN – The TDAmeritrade Charles Schwab merger will happen over Labor Day Weekend (September 5th, 2023) – Only Changes: Log in portal and account number – Expect (no reply) Legal Paperwork and emails!
Looking Forward Now with Regards to Rate Increases
Three Articles Centered around this main leading Article –
In our main lead article, we discuss the look forward expectations of NOT lowering rates as soon as many think. With higher rates, cost of capital will be more expensive for many projects, giving the Federal Reserve the desired slow down in the Economy ! Hopefully, and not too much!
Research Affiliates Robert Arnott 10 Year Expected Returns
Take note of Arnott’s powerful firm with predictions of the slower/safer Bonds earning more than the good ole SP 500 like stocks, earning and inferior 10 year return- Lots of disclaimers of course!
Higher for Longer
Asset Allocation – What’s old is New Again (Wish I would have thought of this title for the Newsletter) – Bonds may be our new Buddy – Especially if Powell is to be taken at his word!
Slow motion Slowdown – It is likely not over yet
Sneaky stimulus remains and with the fencing of Banks, this has the effect of additional stimulus in the system!
A Day in the Life and Summer Plans
While we may not talk Wall Street talk, our days are full of watchful research and fun client interactions!
The return of what we are doing this summer finally makes its way back into the Newsletter – we hope you enjoy!
The Forward-Guidance podcast review, recommended from one of my coveted study buddy groups, a week or so ago!
With downtime over the holiday weekend and the newsletter not being in print just yet… Robert Kaplan’s comments from a podcast came in very much in line with some of the articles in our coming Q 3 2023 newsletter, as such we had to bring you up to speed on this podcast. NICE!
Recall Robert Kaplan was a Dallas Federal Reserve President, before getting caught up in a political issue and he along with several other members ended up resigning.
What stands out about this podcast is the candor that Kaplan gives, which is what we are always looking for. Is it because this is a less than hugely popular podcast ? … although it will make my regular check for subject matter from now on, Or it is due to the resignation which would make Kaplan never available for public service again? …so he has nothing to lose period. Does not matter the reason his candor again is what grabbed attention.
The just over one-hour podcast which can be found here (Forward Guidance), had three important points to bring to your attention:
There’s still stimulus flowing in through the system- Again one of our articles in the coming Q 3 2023 newsletter speaks about the ERC or employee retention credit, Kaplan mentioned specifically talking to many mayors of many cities across the United States which have an abundance amount of stimulus capital still on their balance sheet that must be spent before 2025. hmmmmm
Higher interest rates for longer should be the baseline assumption according to Kaplan– Again this is the subject matter of another of our newsletter articles. Kaplan speaks to the podcaster candidly and says capital markets even though we were just beginning a credit cycle (Tightening of lending standards, less loans, higher interest rates and lower margins, increased defaults all the intent of the federal reserve’s higher rates to slow the economy)- while capital markets and participants are pricing a lower interest rate at the end of 2023 and the beginning of 2024, Kaplan cautions participants to take Jerome Powell at his word. The only thing that would make him change his posture is some large event created by the further progress of the aforementioned credit cycle.
It is a good old boys club– In an aha moment that we always thought existed, Kaplan slips and says his dissenting vote in September of 20 was a frowned upon event by Jerome Powell! However he quickly corrected himself and said I will let Powell speak for himself, but the rabbit was out of the hat, Kaplan realizing this went on to say that the general spirit of the FOMC (Federal Open Market Committee) is everybody agrees and falls in line with a distinct hierarchy of ranking. We could all remember and learn that there is a very much pecking order where the king is the chair, and the pawns are supposed to follow.
Apologies for the length of this post, as mentioned with some time off and the dictation in hand, along with a total complement to our pending newsletter, wanted to bring this to your attention.
Have a great “Inside the Federal Reserve via Robert Kaplan” day!
With a few days out of the office …. that saying of “Sharpening the Saw” comes to mind… Think it speaks more to a solitude down time than we have in this day of technology and need to stay connected… but we get the point, and feel the saw has been sharpened, maybe in a more modern day sense….
Enjoyed catching fish, extra jogs and work outs… and even some movie nights with most of the gang….
The 15 year old even learned to drive a manual “Stick shift” – ouch to the back on the lack of smoothness … fortunately not hitting the roads ANYTIME soon.. not kidding here!
Newsletter Research Findings
While the exact data that was being searched for the next Newsletter (Business Tax Refunds resulting from ERC – Employee Retention Credits – causing a slow motion economic slowing due to remaining stimulus being burned off- wow- what a mouthful) WAS NOT FOUND YET -grrr… we did stumble onto some great IRS feeds via the bird site (Twitter) that we will keep in our pocket for future use… Even AI could not help us, go figure (You mean it doesn’t know EVERYTHING- digressing with a full caffeine intake this am)
Ahhhhh….but TODAY is still a Friday, heading into a drive back home weekend and early summer “Pools are open” weekend!
Welcome to our Video and Audio Podcast Review of our Q2 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
BREAK IN : From Parting Thoughts in the Newsletter
If you are not receiving our street-cents.com blog posts weekly Monday, Wednesday and Fri-day, please reach out and let us know. We have entered the late cycle portion of this economic slowdown and items are moving much quicker than our quarterly newsletter so we are posting frequent and very important items amongst our sometimes-humorous articles for your review and knowledge.
After a small top of the mind reminder that it is ok to pay taxes, we do not want to pay zero today and then pay at a much higher rate in the future, we certainly do not want to pay ANY more than we have to, we go into several reminders….
The SEP and the Spousal IRA – two things we can do now that will help last years taxes….
Important Reminder about reporting :
Just because we did not receive a tax form personally, does not mean that the IRS did not receive some type of notification of that taxable event! If you had a transaction, usually of some out of the ordinary type, that you did not receive a tax form for, we are not out of the woods and you should report it.
Lastly, comments about the possible rolling of 529 into Roth… the answer is still up in the air with additional legal clarity on this… but it cannot start until 2024 anyway!
Happy Anniversary Rate Increases
While hard to believe, the monumental rate increases (fastest of a life time in %) just started about a year ago
M2 Broad Liquidity Measure Tightens
In another – not kidding here – never seen before, M2 one of the broadest measures of liquidity, turns negative and makes our Pilot Advanced Analysis Series…
First spoken about in January, the effects are being felt through the financial system.. but not where we had expected so far….
Have a Great Finally Here Spring! Talk in the Summer!
With a turn around College viewing trip exactly mid week – the lack of sleep, fatigue from an early out late back, six hours of college program listening and walking will be nice to extinguish this weekend… thankfully…
Fun Fact – “Dad, are you tired. because I sure am? So is this what your business meeting trips are like?” Yes, tired for sure! A bit of reality? haha – College Viewing List may be shorter…all good!
Blog Update – Zoom Zoom
Here at street-cents.com our blog has been updated to a “Business” platform … faster, more features (need to figure them out) and more viewing and character formats…. Ok… sounds all cool BUT, we had to as we were pushing the boundaries of our space from the videos and large content….
Would have never believed there were over 2000 – yep – TWO THOUSAND posts to send to you guys…. All are not serious, but all are original… spelling and grammatical mistakes inclusive…haha Thanks for your continued readership and especially the comment!
Who Let the Newsletter Out!
Speaking of writing, articles, posts and grammar…. Our editor did see the post last week of no verbiage on the Newsletter, and sent an email as such…. Prompting a quick continuance of the afore mentioned missing verbiage …. ITS DONE!
Never know how much you guys will like the Newsletter, always a happy surprise — but we can say we have gone to a much avoided subject matter that we will speak very little about in this public venue – you guys can read in the comforts of your home in paper novelty format…. hope you enjoy!
Welcome to our Video and Audio Podcast Review of our Q1 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
Entering the 36 year in the Financial and Capital Markets world, a lesson was learned this year (see below) we want to thank everyone for their well wishes, patience and confidence as we went through a unique “Changing of the Tiger Stripes” event this year!
Higher Rates – Longer – CPI Stubbornly High
CPI Causes Tiger Stripes to Change?
Very Lagging Rent and Shelter Numbers keep pushing CPI
Estate Tax Laws Set to Change – Heads Up
At the end of 2025, putting January 1, 2026 into play, without any tax law adjustments the Estate Tax level will adjust back down to somewhere between a $7 to $8 million or $14 to $16 million for couples level.
While Estate Tax is not a huge revenue earner for the IRS, in our opinion Estate tax is in purpose is to affect the very largest of the states think $100 million and up.
Additionally the IRS is having trouble completing regular federal tax returns, by some estimates some 15 to 20 thousand taxpayers are still waiting on their regular federal returns to be blessed by the IRS from 2020 to present. Lowering the Estate Tax level to an extreme low, while may sound good in the headlines, impracticality, it will likely create a huge bottleneck and more trouble than money earned.
With the turning of the Month to the last one of the year…. Can you guys believe that? Wow…The Newsletter writing begins….
On a personal note, if in a rush, the brain does not seem to be as clear…. the totally opposite of those meeting the constant overnight deadlines… not sure how they do it…
A Modern Monetary Theory is included, something very negatively seen from my perch before, but in trying to view from all angles, worth a detailed review…
Lots of new much higher retirement contribution level amounts, a complete “Well Formatted” list is hopefully in the cards…
Some sunsetting of Estate Tax Levels coming in 2026 – ya we are planners, that will be here before we know it…. a review of the changes looks to make the cut…
Ok…so there you have the Cliff Note’s version of the Q1 2023 Newsletter and how the sausage is made…haha
Today is a Friday heading into a first December Weekend … Enjoy and talk next week!
If you made it this far, you will also notice I forgot to set this post time… Glad its a Friday! Better late than never!
Welcome to our Video and Audio Podcast Review of our Q4 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
With the news being the worst near the tail end of a slowdown, after crossing paths with Ben over five times, we thought it a great time to review some of his thoughts and research…
The Missionary Statement or Strong Direct Narrative
Ben and his partner theorized that Missionary statements once saved for Oval Office wartime speeches or the like are now used in part due to the way we consume our information by almost everyone, leading to an overload possibly of missionary or breaking news like headlines and narratives.
The possible effect of strong missionary statements or narratives, again Ben theorizes is that when there is the need for a very strong subject matter or narrative, if we are not careful we have become desensitized to things because of the possible dramatization of other headlines and narratives that it’s not taken serious. Said simply, the boy who cried wolf
“Why am I reading this, and why am I reading it now?”
Dr. Hunt mentions that they have actually had a number of news organizations and authors directly communicate with he and his partner in order to make sure or check that they are not accidentally using a narrative, which is a fantastic possible change moving forward
Peter Zeihan – Russian Ukraine Thoughts – Demographics made It Now or Never
With regards to the Russian invasion of Ukraine, Peter theorizes that this is a recapture of multiple ports of invasion that Russia has given up over the past many decades. He also mentions that because of poor demographics the Russian invasion was an absolute necessity sooner rather than later due too an aging population
Interest Rate Thoughts
“The Federal Reserve led by Jerome Powell, has long wanted to get rates up to a more normalized level” For the record this has been a known goal in the halls of Wall Street and the Federal Reserve for that matter.
Peter goes on, “Seems to be a feeling from the Fed Officials, that if a recession is going to happen anyway, let’s get our toolkit back of a higher interest rates!”
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.
Q4 2023 J.K. Financial, Inc. Newsletter … Good News on Interest Rates for Pensions and Pension Recipients, What? … Don’t Fight the FED Are we Fighting the Fed? Yes … Important True-Up Reminders for Year End Deadlines i.e. 401k … Handy Cyber Tips and Tricks … RMD Age Date Changes and Others … By John Kvale CFA, CFP …
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
Let’s get going! We hope you enjoy!
Q4 2023 Newsletter
(YouTube)
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!
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!
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
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Posted in Debt - Debt Management, Donald Capone, Economy, FOMC, Forecast, General Financial Planning, Interest Rates, Investing/Financial Planning, Jen Hill, John Kvale, Market Comments, Newsletters, Personal, Podcast, Video
Tagged 401k, Bonds, Cyber, Fight the Fed, Interest Rates, Milliman, Newsletter, PBO, Pension