If you go to cocktail parties or meet regularly with colleagues for a few years, then you almost certainly witness people speaking without knowing what they’re talking about. Humans are generally overconfident about their knowledge of everything, including personal finance. To help assess your personal financial IQ, here’s a 30-second quiz.
In an era of financial titans like Elon Musk, Jeff Bezos, and Warren Buffett, it's hard to imagine that, at the turn of the 19th century, one of America's dominant investors was a woman. But it's true.
Big declines in the stock market are associated with recessions, and stocks often bottom months before recession-end.
Let's talk about stock market volatility because we have seen some extraordinary volatility lately. Let's start by recalling the basic axiom of investing in common stocks: If you want the so-called equity risk premium, then you should expect stock market volatility and, in fact, welcome it. It’s completely counterintuitive.
Stocks have been in a bear market since June 13, 2022. The decline began on January 3rd, worsened in February when Russia invaded Ukraine, and sunk further after the Federal Reserve in March began an aggressive series of interest rate hikes to fight inflation.
The Federal Reserve System, the nation's central bank has a dual mandate to pursue maximum employment and maintain price stability. These two priorities are currently treated equally, but this was not always the case. In fact, the Fed's bias toward maximum employment in the late 1960s and 1970s was a critical driver of the Great Inflation.
The Standard & Poor's 500 stock index fell into a bear market on June 13, 2022, rebounded in the summer, and then tanked again as summer ended; autumn is beginning with the fall continuing. This morning's higher than expected inflation number may make you wonder when the post-Covid financial pain will stop.
Everyone says trying to get in and out of the stock market is unwise, but this bar chart makes clear why.
Last week, we provided 10 year-end tax reminders. In case you missed it, it's on our website.
This is an unusual year-end tax planning season. The pace of federal tax law reform has increased in the four decades and accelerated since the pandemic.
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The New Retirement Plan Distribution Rules
Published Thursday, September 8, 2022 at: 8:29 AM EDT
In case you missed it, sweeping new rules on distributions from IRA And Qualified Retirement Plans (QRPs) went into effect at the beginning of 2022.
With the pandemic, high inflation rate, Federal Reserve tightening and other crises preoccupying attention, it is understandable if you did not know about the important new rules affecting retirement planning.
On December 20, 2019, President Donald J. Trump signed into law the SECURE Act (Setting Every Community Up for Retirement Enhancement” Act). On February 23, 2022, the IRS issued proposed regulations implementing the law. These regulations detail specifics of how the new law is to be enforced.
While the rules are only proposed and have not been finalized, it is wise to update personal tax and financial plans based on rules proposed by the IRS. While they may be changed or augmented, acting as if proposed IRS rules are final is prudent. The new distribution IRA and QRP rules implement new tax law contained in SECURE Act regarding:
- Required minimum distribution requirements
- Distributions commencing during an employee's lifetime
- Death before the required beginning date (RBD) for distributions
- Who is a designated beneficiary?
- Required minimum distributions (RMDs) from defined contribution plans
- Required minimum distributions from defined benefit plans and annuity contracts
- Rollovers and transfers from IRAs and QRPs
IRAs and other federally qualified retirement plans are central to personal financial planning, impacting estate and income tax as well as retirement planning. The new rules affect a complex and technical tax topic.
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