Stock market concentration became more extreme during the quarter. The top 10 stocks in the S&P 500 make up just over 30% of the index which is the highest in history. The catalyst for a change in market leaders likely comes from a regime or market/economic change. Here are 3 things you need to know: In Q2, the S&P 500 was up 4.28% with the top 10 stocks contributing 5.60%, meaning the...
The IRS has provided guidance on the federal income tax treatment of certain home energy rebates offered by states, with funds provided by the U.S. Department of Energy (DOE). Background The Inflation Reduction Act of 2022 included two provisions allowing rebates for home energy efficiency retrofit projects and home electrification and appliance projects. These home energy rebate programs are to...
Each year, the Trustees of the Social Security and Medicare trust funds provide detailed reports to Congress that track the programs' current financial condition and projected financial outlook. These reports have warned for years that the trust funds would be depleted in the not-too-distant future, and the most recent reports, released on May 6, 2024, show that Social Security and Medicare...
In May there was a generally positive picture across the board after what was a challenging April. Here are 3 things you need to know: The S&P 500 was up +5.0% (total return) and hit another record, but the rally continued to be a narrow one. For example, the Magnificent 7 rose +9.1%, but the equal-weighted S&P 500 was only up +2.8%. It was a very strong month for several precious...
Does tax-free growth for your retirement nest egg sound good to you? Perhaps your employer doesn't offer a Roth retirement option, or your income exceeds the limits for direct Roth IRA contributions? If so, the backdoor Roth IRA strategy could be what you have been looking for! A Roth IRA is a retirement account where contributions are made with after-tax dollars, offering tax-free growth and...
The U.S. stock market surged in the first quarter of 2024 (Q1), once again led by the S&P 500 Index. The index notched 22 new highs in the quarter, increasing by 10.2%. Mega cap technology stocks led the charge with NVIDIA (NVDA), Meta Platforms Inc. (META), Amazon.com Inc. (AMZN), and Microsoft Corporation (MSFT) appreciating by 82.5%, 37.2%, 18.7%, and 11.9%, respectively. However, a...
An automatic enrollment provision can be a useful tool to drive employee engagement in plans, particularly for participants who otherwise have not yet considered their retirement situation. These provisions allow an employer to withhold deferrals from the employee’s pay without the employee making an election. By utilizing automatic enrollment, an employer can boost participation while...
Although required minimum distributions (RMDs) are now mandatory components of tax-deferred retirement plans, this was not always the case. RMD rules began to apply to qualified plans following the Tax Reform Act of 1986, after policy makers noticed that retirement account holders were saving the funds for their beneficiaries rather than their own retirement spending. A plan retains...
The IRS Form 5500 is an annual return that is filed for most qualified retirement plans. Here are a few new items you may notice on the form for plan years that began in 2023. Participant count has been expanded for defined contribution plans. The large plan audit requirement is now based on the number of participants with account balances at the beginning of the plan year, rather than the total...
May 2024 15th: Quarterly Benefit Statement – Deadline for participant-directed plans to supply participants with the quarterly benefit/disclosure statement, including a statement of plan fees and expenses charged to individual plan accounts during the first quarter of 2024. June 2024 30th: EACA ADP/ACP Corrections – Deadline for processing corrective distributions for failed ADP/ACP tests...
Although required minimum distributions (RMDs) are now mandatory components of retirement plans, this was not always the case. RMD rules began to apply to qualified plans following the Tax Reform Act of 1986, after policy makers noticed that retirement account holders were saving the funds for their beneficiaries rather than their own retirement spending. Fast-forward to the current day, where...
The Inflation Reduction Act of 2022 included two provisions allowing rebates for home energy efficiency retrofit projects and home electrification and appliance projects. These home energy rebate programs are to be administered by state energy offices, with the U.S. Department of Energy (DOE) providing guidance and oversight. States are not required to offer these rebates. Many states have...
Concerns mounted around inflation and geopolitics in April. The March Consumer Price Index (CPI) report came in stronger than expected, with many of the usual suspects driving the bulk of this strength. In our opinion, stalling progress on disinflation limits the likelihood of a Fed rate cut in June, although underlying disinflationary trends should allow inflation to march lower over the course...
As Sam enjoys their Sunday evening, Sam gets a call from their sister Maya. This is unexpected since Sam hasn’t talked to Maya in years. “Hi, Maya”, Sam answers the phone. Maya responds, “Hi, Sam. I have some news for you.” Maya proceeds to tell Sam that their Aunt Gertrude passed away and as the executor of her estate, Maya lets Sam know that they are one of the beneficiaries of Aunt Gertrude’s...
It's been a tough financial aid season for college students and their families. The FAFSA (Free Application for Federal Student Aid) was redesigned and simplified for the 2024-25 school year, in what was supposed to benefit families completing the application. But a late rollout and the subsequent discovery of form calculation errors have led to processing delays and, by extension, delays for...
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