Quiver Financial News

Buckle up butter cup this episode is a good one. This week on the Half-Truth.  We discuss what is half true behind Ryan Reynolds and Jim Cramer, Inflation and the CPI revisions that have been happening for the last year.  We talk about Real Estate Brokers 6% commission.  BlackRock getting into Target Date funds.  We poke fun at how stupid the” Ask the Advisor” articles are.  We even have a little fun about United Airlines.  Enjoy!

Taking control of your financial future often involves making decisions that ripple far beyond your own life.
One such decision is designating a 401(k) beneficiary—a choice that can secure a loved one’s financial stability long after you’re gone.
Navigating this essential aspect of estate planning involves more than just ticking a box. It’s a journey through complex rules, varying options, and sometimes emotionally charged family dynamics.
So, I wanted to dive in and steer you through the labyrinth of 401(k) beneficiary rules and offer insight into making the best choices for your unique circumstances.
What is a 401(k) Beneficiary and Why Are They Important?
When you have a 401(k) or IRA account, you’re not just saving for your future. You’re also paving the way for financial stability for your loved ones when you’re not around. A 401(k) beneficiary is someone you designate to receive the assets in your 401(k) account after you pass away. They are a critical part of your estate planning.
Why is naming a beneficiary so important? If you don’t set one, your assets could be tied up in a lengthy legal process. Even worse, they might not go to the person you’d have chosen. Let’s say you’re married but haven’t named your spouse the primary beneficiary. Depending on the laws of your state and the rules of your retirement plan, your hard-earned savings might not go to your spouse automatically.
So, a 401(k) beneficiary is not just a name on a form; it’s a crucial decision that impacts how your assets are distributed after your death. It’s not just about you; it’s about securing the financial future of the people you care about.
Contingent Beneficiaries
Contingent beneficiaries work precisely as the name implies: they act as backup beneficiaries if the primary beneficiary predeceases you or is otherwise unable to claim the assets. Naming contingent beneficiaries can help prevent your estate from experiencing legal holdups, such as an extended probate process. While not necessary, naming a contingent beneficiary can add more flexibility and security to your estate planning.
The Impact of the Secure Act on 401k Beneficiary Rules
In 2019, the landscape for naming 401(k) beneficiaries changed dramatically with the introduction of the Secure Act. This legislation separated beneficiaries into three categories: eligible designated beneficiaries, designated beneficiaries, and those who don’t fit into either of these classes. The legislation was popular and successful, leading to an update in 2022 under the new Secure Act 2.0.
So, what does this mean for you? First, it adds an extra layer of complexity when deciding who to name as a beneficiary. For instance, surviving spouses, minor children, and disabled individuals fall under “eligible designated beneficiaries (EDBs).” This category gets special tax treatment and more flexibility in withdrawing funds. Additionally, any individual not more than ten years younger than the deceased 401(k) owner can be named an EDB.
Others, like adult children or friends, fall under “designated beneficiaries.” Their withdrawal options might be more limited, affecting how quickly they must withdraw the money and whether they’ll face an early withdrawal penalty.
And finally, entities like charities or trusts, as well as individuals not clearly defined, fall into the last category. They have to adhere to different rules, often less advantageous.
Most beneficiaries must follow the 10-year rule. This rule stipulates that beneficiaries must take Required Minimum Distributions (RMDs) to completely empty the account by the 10th year following the original owner’s death. Spouses are the most flexible beneficiaries, as they can blend the inherited 401(k) with their own plan, allowing them to delay RMDs until they retire. Minor children can also delay RMDs, as we’ll see below.
To navigate this maze of rules, it’s advised to consult with an experienced financial advisor or a family law attorney, especially before naming a minor as a beneficiary.
The Complexity of Naming a Minor as a Beneficiary
Choosing a minor as a 401(k) beneficiary may seem like a generous gift for their future, but it’s a decision that comes with a set of complications. Minors, defined as individuals under the age of 18 who haven’t been emancipated, can’t directly manage a 401(k) account or a traditional IRA. So, if you do name them as beneficiaries, someone else has to step in and manage the assets until they reach the age of majority.
First, an executor must be appointed to oversee the management and disbursement of the 401(k) funds. This typically involves a legal process where someone petitions the state’s courts on behalf of the minor. Legal experts, such as a family law attorney, are generally necessary to file the appropriate paperwork.
Additionally, family dynamics can make this process even more challenging. For example, if the minor’s parents are going through a contentious divorce, the proceedings to name an executor could get complicated and prolonged. Moreover, other relatives like grandparents might need to be notified and could have a say in who gets appointed as the executor.
And here’s one last consideration when naming a minor child as your 401(k) beneficiary: while minor children who inherit a 401(k) can delay RMDs, they can only do so until they reach the age of the majority (in most places, 18 years old). At this point, the ten-year rule begins, giving them ten years to empty the account through RMDs.
For all these reasons, if you’re considering a minor as a beneficiary to your 401(k) plan, it’s crucial to consult with professionals versed in your state’s laws to make the process as smooth as possible.
Special Considerations for Spousal Beneficiaries
If your spouse is your 401(k) beneficiary, special rules come into play, largely thanks to the Secure Act. Surviving spouses are classified as “eligible designated beneficiaries,” which gives them more flexibility than other beneficiaries.
Spousal beneficiaries often have more options and flexibility. Still, each choice comes with its pros and cons. As always, it’s recommended to consult a financial advisor familiar with the laws of your state to make the most informed decision.
Understanding these rules and options empowers you to make the best financial decisions during a challenging time.
Options for Surviving Spouse Beneficiaries
Lump Sum Distribution: One option is to take the entire 401(k) balance as a lump sum. While this provides immediate access to funds, it’s crucial to consider the tax implications. The entire amount is taxable in the year it’s withdrawn, which could bump you into a higher tax bracket.
Rolling into Own IRA: A more tax-efficient approach is to roll the deceased’s traditional 401(k) account into your own traditional IRA. This option allows the assets to continue growing tax-free until you decide to make withdrawals. If the inherited plan is a Roth 401(k), you can only roll it over into another Roth account.
Family Trusts: An Alternative to Direct Beneficiary Designation
Not comfortable with naming a minor or even a spouse directly as your 401(k) beneficiary? You might want to consider naming a family trust as the beneficiary instead. Trusts can offer a layer of protection and control that individual beneficiaries cannot. They can also avoid the need for an executor when leaving your assets to a minor.
Setting up a trust requires careful planning and some legal paperwork, but it can give you greater peace of mind about how your 401(k) assets will be managed and disbursed. As with any complex financial decision, it’s best to consult with experienced professionals like financial advisors and family law attorneys to explore whether this option is right for you.
Benefits of “Conduit” and “Accumulation” Trusts as Named Beneficiaries
Two popular types of trusts often used are “conduit” and “accumulation.” Both types are recognized under the Secure Act, offering tax advantages and regulatory compliance.
Conduit Trusts: With a conduit trust, RMDs from the 401(k) pass directly to the trust and then must be distributed to the trust beneficiaries. This type of trust can help control how much money minor beneficiaries receive at a time.
Accumulation Trusts: Unlike a conduit trust, an accumulation trust allows the trustee to accumulate distributions within the trust. This can provide protection from creditors and more controlled disbursement of funds.
Practical Advice and Special Circumstances
When naming 401(k) beneficiaries, several variables must be considered. While the rules and regulations can be navigated, you should also account for the practical aspects and the unique circumstances your beneficiaries might face.
Naming a 401(k) beneficiary isn’t a decision that should be made lightly. It requires strategic planning and, often, professional advice to ensure that the account holder’s wishes are honored while safeguarding the beneficiaries’ financial future.
Age Considerations and Health
First, consider the minor beneficiaries’ ages and your health. If the child is 16 or 17 and you’re in good health, the risk of them facing complications may be lower. But remember, you’re essentially rolling the dice. If something unforeseen happens, the minor could still face challenges accessing and managing those assets.
Divorcing Parents and Contentious Divorces
The situation becomes even more complex when the minor’s parents are divorcing or are embroiled in a contentious divorce. These personal matters can slow down the already lengthy process of transferring assets and may require more legal maneuvering. Therefore, consider the family dynamics that could impact the minor’s ability to receive and manage the inheritance.
Consultation with a Family Law Attorney for State-Specific Rules and Advice on Trusts
Every state has its own set of laws on inheritance and trusts. Therefore, the textbook advice is to consult a family law attorney who is well-versed in your state’s regulations. They can guide you on how to set up a conduit or accumulation trust best and help you navigate the state-specific rules that ultimately determine how smoothly the process will go for the minor beneficiaries.

Financial planning is a critical aspect of starting and operating a successful business. It also plays a crucial role in your personal wealth management.
Whether you’re just starting or you’ve been in the game for a while, a well-thought-out financial plan is your roadmap to long-term success.
We want to help equip you with the necessary tools and knowledge to secure your financial future.
So, read on to discover tips for small business owners and entrepreneurs hoping to make the most of your business and personal finances.
The Importance of Separating Personal and Business Finances
When you’re an entrepreneur, mixing personal and business finances is tempting. After all, it’s all your money, right? But here’s the thing: blending them is a bad idea for a few key reasons.
Legal Protection
First off, you want to protect yourself legally. It helps create a clear line between you and your business. So, if your company faces legal issues, your personal assets—like your home or personal savings—are safer.
Easier Tax Management
Tax time is simpler when your finances are separate. You can more easily identify business expenses, income, and potential tax deductions. No one likes sifting through months of mixed expenses at the last minute. Plus, when you file your income tax return, it’s easier if everything is already sorted.
Clear Financial Picture
Having separate accounts gives you a clearer picture of how your business is doing. You can track income, manage business expenses, and see your bottom line at a glance. This helps when you’re making decisions. For example, you’ll know when you can afford to hire more staff or invest in new equipment.
How to Separate Finances
Navigating the financial landscape as a small business owner can be daunting, especially when personal and business finances intertwine. Separating these two financial realms is not just a good practice—it’s essential for transparent bookkeeping and stress-free tax preparation.
Here are some common steps that can help effectively separate your personal and business finances, paving the way for long-term success in both:
Establish a legal entity (LLC, S Corp, Sole Proprietor, etc.).
Open a checking account exclusively for the business.
Get a business credit or debit card for expenses.
Pay yourself a salary to separate your personal money from the company’s.
Keep track of receipts—both business and personal.
Track shared expenses (car, phone, or—for those who work from home—mortgage), as some may be deductible.
Financial Planning Tips for Entrepreneurs
In the world of entrepreneurship, financial planning is one of the most important steps you can take to maximize wealth. This requires steps like budgeting, expense management, and cash flow monitoring.
Mastering concepts like these is critical to ensuring the long-term financial health of your business. To build business wealth, consider:
Creating a Realistic Budget for Your Business
A realistic budget is integral to your business plan, helping you allocate resources efficiently. Assess your business for necessary expenditures, keep track of your income and expenses, and revisit your budget regularly to adjust as needed. With a realistic budget, you’re not just flying by the seat of your pants—you’re making data-driven decisions that can better your bottom line.
Identifying and Managing Business Expenses
Business expenses range from rent and utilities to customer service tools and marketing. Make a list of recurring expenses and one-off costs to get a complete picture of your spending. Once you identify these expenses, look for areas where you can cut costs without sacrificing quality. Effective expense management contributes to a more profitable business in the long term.
Monitoring Cash Flow for Long-term Success
Cash is king when it comes to business longevity. Monitoring your cash flow to understand how money moves in and out of your business is crucial. Use accounting software to track your cash flow and generate reports. Always aim for a positive cash flow—more money coming in than going out—to secure your business’s long-term success.
Consulting a Financial Advisor
Financial advisors can help with more than just personal finances—they can help you analyze your company’s finances and create a roadmap for how and where to invest in your business. The SBA (Small Business Administration) also offers counseling and other resources to small businesses and entrepreneurs in the United States.
Creating a Business Succession Plan
An effective business succession plan is not just a safety net—it’s a wealth-building strategy. Planning for succession early ensures that your business remains viable and profitable long after you’ve stepped away.
Identifying and grooming future leaders can make your business more attractive to potential buyers, significantly increasing its value. This builds wealth for you and sets the stage for long-term success, creating a lasting legacy that can provide financial benefits for generations.
Business Tax Planning
Taxes might not be the most exciting part of running a business, but they’re certainly one of the most important. Effective tax planning can save money and help you reinvest in your business.
Here are some crucial considerations for planning your business taxes:
Common Tax Deductions to Maximize Returns
As a small business owner, you can maximize your income by taking advantage of various tax deductions. From home office costs to business travel, keeping track of these expenses can significantly reduce your income tax liability. Store all receipts and maintain records to simplify the tax filing process and ensure you’re not leaving money on the table.
Employment Tax and Income Tax Returns
Employment taxes are a necessary part of doing business if you have employees. Make sure you understand your responsibilities regarding Social Security, Medicare, and withholding income taxes.
When filing your income tax return, consult a financial advisor to explore avenues for potential tax savings. To stay organized, make it a point to separate your employment tax from your general business account.
Tax Advantages Depending on Your Business Structure
The type of business structure you choose—whether it’s a sole proprietorship, LLC, S Corp, etc.—directly impacts your tax obligations. Each structure has its own set of tax advantages and disadvantages. For example, an LLC offers the flexibility of passing losses through to your personal tax return, potentially lowering your tax burden.
Always consult a financial advisor to determine the tax benefits that align best with your business objectives.
Solo & Small Business Retirement Plans
Long-term financial security is not just a dream but a necessity. Unfortunately, the immediate challenges of running a business cause many small business owners to overlook retirement planning. However, just as you plan for your business’s long-term success, you should also plan for your own long-term financial security. This ensures you’ll have the means to maintain a comfortable lifestyle after you stop working.
Choosing the right retirement plan is crucial. As a small business owner, you have several options designed to help you save for retirement while providing various tax benefits. Some of the most popular retirement plans for small business owners include:
SEP IRAs
SEP IRAs are especially beneficial for those who earn a substantial small business income and want a simple, straightforward way to contribute towards their retirement. With a SEP IRA, you can contribute up to 25% of your earnings, with an annual limit much higher than traditional IRAs. This flexible plan allows you to adjust your contributions each year based on your business’s profitability.
SIMPLE IRAs
SIMPLE IRAs are designed to be easy to set up and maintain. They’re ideal for small businesses and sole proprietorships that don’t want the administrative burden of more complex retirement plans. You and your employees can contribute, and a mandatory employer match makes it a win-win for both parties. The contribution limits are lower than for SEP IRAs but still offer a solid avenue for retirement savings.
Solo 401(k)s
If you’re a business owner with no employees other than your spouse, a Solo 401(k) could be your best option. These plans allow for high contribution limits and provide the opportunity for a Roth component, allowing for tax-free retirement withdrawals. This can be particularly useful for business owners who expect to be in a higher tax bracket during their retirement years.
Personal Investment Strategies
Apart from securing your business finances, focusing on personal wealth accumulation is equally crucial. Focusing on personal investments can be difficult for entrepreneurs—especially if you’re investing a significant amount of your personal wealth into your business.
However, some basic, powerful personal investment strategies can set you on the path to long-term financial freedom. Consider:
Build Personal Wealth with Diverse Portfolios
Investing wisely is critical to building personal wealth. There are multiple avenues for growing your money, from stocks and bonds to real estate. Diversification is essential. By not putting all your eggs in one basket, you can help mitigate losses from riskier investments by also investing in safe, slow-growing stocks and assets.
Remember that each type of investment has its own risk and return profile, so make your choices wisely. A balanced portfolio is generally a winning strategy in the long run.
Keep an Emergency Fund
Access to emergency funds for unexpected expenses—car & house repairs, life expenses, etc.—can help prevent you from dipping into your retirement accounts and other investments. This way, you can afford to pay those sudden expenses while your investments continue to grow uninterrupted.
Consult with a Financial Advisor
Financial advisors offer tailored investment advice that considers your income level, risk tolerance, and financial goals. If you’re new to investing or have a significant amount of capital, consulting a financial advisor can be a wise decision. They can help you understand tax implications, optimize for tax advantages, and avoid common investment pitfalls.
 
 

With Oil, Food and Housing on the rise can Inflation remain below 5%?  
Interest rates and inflation are turning out to be kryptonite for investors in 2023.  First half of 2023 was great if you were in only 7 stocks.  Second half of the year is killing your 60/40 portfolio.
Are interest rates and inflation headed higher for longer, or have they reached their peak? Find out what we are seeing and doing for our clients to help them prosper during rising rates and higher inflation. Not intended to be investment advice. Always consult your financial advisor or call us for a review prior to acting on any investment thoughts.
Advisory services offered through Quiver Financial Holdings, LLC www.quiverfinancial.com 949-492-6900.

Retirement is the ultimate goal for most of us. We dream of leaving work behind for relaxing days, hobbies, and spending time with loved ones.
But there’s a side to retirement that’s often overlooked: taxes. Understanding taxes is crucial whether you’re saving for retirement, nearing those golden years, or already there.
If you’re still saving for retirement, you might be trying to figure out how much money you’ll need in retirement. But have you considered how taxes can impact your retirement budget? Different retirement plans come with different tax burdens—and without a good tax plan, you might end up with less than you thought.
Believe it or not, the choices you make now can affect your taxes in retirement.
We want to help you keep more of your money and enjoy the retirement of your dreams. So, let’s explore various sources of retirement income, how they’re taxed, and strategies for navigating the complex world of retirement taxation.
How Is Retirement Income Taxed?
Understanding how different types of retirement income are taxed can help you plan better. In fact, falling into the Tax Trap is one of our top retirement mistakes to avoid. Learning more about taxes in retirement can help you decide when and how to withdraw from your accounts. And that kind of strategic planning can mean more money in your pocket in retirement.
Let’s break down the different types of retirement income and how they’re taxed.
Social Security Benefits
Social Security is a vital component of retirement for many Americans. After years of contributing to the system through payroll taxes, retirees anticipate receiving these benefits as a steady income stream. However, there’s a nuance that often catches retirees off-guard: taxation.
While it’s a common misconception that Social Security benefits are always tax-free, the reality is a bit more complex. The taxation of these benefits is contingent on your “combined income.” This term encompasses your adjusted gross income, non-taxable interest, and half of your Social Security benefits.
If your combined income surpasses a limit ($25,000 in 2023), a portion of your Social Security benefits becomes taxable. For individuals with a notably high combined income, this could mean paying taxes on up to 85% of their benefits.
401(k) Plans
The 401(k) plan has become a staple in retirement planning for many American workers. Offered by many employers, it allows employees to set aside a pre-tax portion of their paycheck into a retirement account. This means the money you contribute to a 401(k) reduces your taxable income for that year, providing immediate tax savings.
However, there’s a trade-off. While you benefit from these tax savings during your working years, the situation flips in retirement. When you start withdrawing from your 401(k) in retirement, the distributions are treated as regular income, and thus, they are subject to taxation. This is because the government hasn’t yet collected income tax on this money.
For example, if you’re in the 22% tax bracket in retirement and you withdraw $10,000 from your 401(k), you’d owe $2,200 in taxes on that distribution.
It’s also worth noting that there are rules about when you can start taking money out without penalties. The minimum withdrawal age for a 401(k) is 59½. This is when you can start withdrawals without incurring early withdrawal penalties. However, if you take money out before this age, you will not only pay taxes on the withdrawal but also a 10% penalty.
IRAs (Individual Retirement Accounts)
Individual Retirement Accounts, commonly known as IRAs, are versatile tools designed to help Americans save for retirement. Unlike 401(k) plans, which are often tied to an employer, IRAs are opened by individuals, offering more flexibility in terms of investment choices and providers.
There are two primary types of IRAs: Traditional and Roth, each with its unique tax characteristics.
Traditional IRA: Like a 401(k), contributions to a traditional IRA are pre-tax. This can lower your tax burden the year you make the contribution, but withdrawals in retirement are taxed as regular income.
Roth IRA: The Roth IRA is different. Contributions to a Roth IRA are made with after-tax dollars, meaning you don’t get a tax break when you put money in. However, the advantage comes in retirement. Qualified withdrawals from a Roth IRA are completely tax-free. This can be a significant benefit, especially if you expect to be in a higher tax bracket in retirement or if you believe tax rates will rise in the future.
Other Investments
Beyond traditional retirement accounts, many individuals diversify their portfolios with stocks, bonds, or real estate investments. These assets can be valuable sources of income during retirement, but they come with their own tax implications.
Stocks: When you sell stocks that have appreciated in value, you’re subject to capital gains tax. The rate you pay depends on how long you’ve held the stock. If you’ve owned it for over a year, it’s considered a long-term capital gain, which typically has a lower tax rate than short-term gains.
Bonds: Interest income from bonds is usually taxed at your ordinary income tax rate. However, there are exceptions. For instance, interest from municipal bonds is often tax-free at the federal level—but capital gains from the investment are taxable.
Real Estate: Owning property can provide rental income, which is taxable. However, it’s a very nuanced investment, with many different tax burdens and deductions depending on what kind of property you own, how you maintain it, where it’s located, and more. Additionally, when you sell a property at a profit, you may owe capital gains tax, though exclusions are available for primary residences.
RMDs: An Overview
As you approach retirement, you must be aware of Required Minimum Distributions (RMDs). These are mandatory withdrawals that you must take from your tax-deferred retirement accounts, like traditional IRAs and 401(k)s, starting at age 72.
The amount you must withdraw each year is based on a formula that considers your account balance and life expectancy. Failing to take out the correct amount can result in a hefty tax penalty, making it crucial to plan these distributions carefully.
RMDs can impact your tax situation in retirement. Large RMDs can push you into a higher tax bracket, increasing your tax liability. Therefore, understanding and strategizing around RMDs is critical to tax-efficient retirement planning.
Crafting a Tax-Efficient Retirement Strategy
With a grasp on how different retirement incomes are taxed, you’re in a prime position to strategize for a tax-efficient retirement. The goal is to maximize your income while minimizing taxes, ensuring you have a comfortable and financially secure retirement. By proactively planning and using the knowledge you’ve gained, you can navigate the complexities of retirement taxation.
Here are some popular strategies for turning this knowledge into a tax-efficient retirement:
Diversify Income Sources
In the realm of retirement tax planning, diversification isn’t just about spreading your investments across different asset classes—it’s also about diversifying your income sources. You gain flexibility by having a mix of tax-free, tax-deferred, and taxable accounts.
By balancing where your income comes from each year, you can strategically navigate your tax liability, ensuring you make the most of your retirement savings—as we’re about to see.
Strategic Withdrawals
Imagine entering retirement with three main pots of money: a savings account, a traditional IRA, and a Roth IRA. Each has its tax implications.
First, you dip into your savings account. This money has already faced taxes when you earned it, so there’s no additional tax hit now. Using these funds first means you’re not adding to your taxable income for the year. Keep in mind that interest earned in savings accounts is taxable whether you withdraw the money, transfer it, or keep it in your account.
Next, you turn to your 401(k). Withdrawals from this account are taxed as regular income. If you were to pull large sums from this account right away, it could push you into a higher tax bracket, meaning a heftier tax bill. By using your savings first and then gradually taking from your 401(k), you can manage your yearly income and potentially stay in a lower tax bracket. Waiting to dip into your tax-deferred accounts also helps ensure you won’t need to withdraw more than the required minimum.
Lastly, the Roth IRA is your safety net. You’ve already paid taxes on the money you contributed to this account. So, when you make withdrawals in retirement, they’re tax-free. If you need more money in a particular year, perhaps for a medical emergency or a dream vacation, you can pull from your Roth accounts without worrying about the tax implications.
This strategy of sequencing withdrawals can help you manage your tax bill each year, ensuring you get the most out of your hard-earned savings.
Roth Conversions
Roth conversions involve moving funds from a 401(k) or traditional IRA to a Roth IRA. While this means paying taxes on the converted amount now, it’s a strategic move for those expecting to be in a higher tax bracket in retirement. You’re paying taxes now to avoid paying them in retirement. And, by converting, you’re betting that your current tax rate is more favorable than future rates.
Additionally, Roth IRAs don’t have Required Minimum Distributions, offering more flexibility in managing retirement funds. For many, the upfront tax cost of a Roth Conversion is outweighed by its long-term tax advantages.
Capital Gains Management
Diversifying retirement savings often means investing in assets like stocks or real estate. When selling these investments at a profit, you’ll encounter capital gains. To mitigate the tax impact, consider strategies like tax-loss harvesting—offsetting gains with losses. Assets held over a year typically benefit from lower tax rates.
Also, always factor in state and local tax implications for capital gains from real estate, as they can influence your final tax bill.
Stay Informed
Tax laws and financial regulations are constantly evolving. As you journey through retirement, it’s crucial to stay updated. Whether through consultations with financial experts or keeping up with financial news, being informed allows you to adjust your strategy proactively.
By staying current, you ensure your retirement approach remains effective and tax-efficient.
 
 

What is hot and what is not in Stocks, Bonds, Real Estate, Interest Rates, Metals, Energy, and Inflation, we cover it all in this financial market update for October 2023. Is the stock market rally that started in October of 2023 over, or will it continue higher?
How much higher can interest rates go, and what may be their effects on the economy and real estate prices? With Oil prices headed to the moon, what should we expect for gas and food prices? Is inflation here to stay? Find out what we are doing in our portfolios in response to these pertinent questions.
Min 0-2 Intro Min 2-14
Stock Markets Min 14 - 24
Metals and Energy Min 24 - 29
Inflation and Interest Rates Min 29 - 39
Real Estate Min 39 - 48
Bottomline - What all this may mean for an investor needing their money for retirement or healthcare in the next 5-7 years? Not intended to be investment advice. Always consult your own financial professional or call us before acting on any investment idea. Advisory services offered through Quiver Financial Holdings, LLC
www.quiverfinancial.com 949-492-6900.
00:00 Introduction
01:19 What's Happening In Stocks
14:04 Metals and Energy - Looking Hot?
24:01 Inflation and Interest Rates - Higher for longer?
29:09 Real Estate - Crash, Boom or Stuck in the Mud?
39:02 Bottomline - What this can mean for you

Stepping into the golden phase of your life should be about cherishing memories and embracing new adventures—not fretting about financial stability!
If you’re inching closer to the big 5-0 or have already celebrated that milestone, there’s a financial tool designed especially for you that could be a game changer for your retirement savings.
Catch-up contributions can significantly enhance your retirement nest egg.
If you’ve ever wondered, “Have I saved enough for retirement?” or “Is it too late to amplify my savings?” we’ve got your answers!
So, let’s dive into the magic of catch-up contributions and how they can turbocharge your retirement savings after 50.
How Do 401(k)s Work?
A 401(k) is a retirement plan sponsored by an employer, designed to allow employees to set aside a portion of their paycheck for retirement. This money is often invested in a mix of assets, including stocks, bonds, mutual funds, and other investment vehicles, offering opportunities for growth over time.
The unique advantage of a 401(k) lies in its tax benefits. There are two main types of 401(k) accounts to consider: Traditional and Roth.
With a Traditional 401(k) plan, participants contribute pre-tax dollars, which reduces their taxable income for that year. While this provides an immediate tax benefit, withdrawals in retirement are taxed, including both the initial contributions and any earnings.
On the other hand, Roth 401(k) contributions are made with post-tax dollars. This means individuals pay taxes upfront, but when retirement comes around, the contributions and their earnings can be withdrawn tax-free, provided certain conditions are met.
401(k) Contribution Limits
The Internal Revenue Service (IRS) sets annual limits on how much can be contributed to a 401(k).
For 2023, individuals under 50 can contribute up to $22,500. The limit goes up each year to help keep pace with inflation.
SECURE Act & Catch-Up Contributions
The passing of the SECURE 2.0 Act brings a slight change to 401(k) savers who are “highly compensated.”
As of 2024, those earning $145,000 or more a year cannot deduct catch-up contributions from their taxable income. Instead, these contributions will receive mandatory Roth treatment—meaning they’ll be post-tax deductions.
What Are Catch-Up Contributions?
Catch-up contributions are additional amounts individuals aged 50 or older can contribute to their retirement accounts beyond the standard annual limit. Recognizing that some people may be lagging in their retirement savings as they approach retirement age, the U.S. Congress introduced catch-up contributions to allow these individuals a chance to bolster their savings.
The concept is straightforward: once an individual reaches the standard contribution limit of their 401(k) in a given year if they are 50 or older, they can keep contributing up to the catch-up limit set by the IRS. This additional allowance can make a significant difference, especially when compounded over several years.
Why 50?
By the time most individuals reach 50, they’ve navigated significant financial commitments, such as raising children, paying for college education, and servicing mortgages. These responsibilities often take precedence over saving for retirement, especially in earlier years. By the time these other commitments begin to taper off, there’s an acute realization of the limited time left to bolster retirement savings.
Allowing increased contributions for those 50 and older acknowledges these challenges. It enables them to accelerate their savings, capitalizing on their often higher earning power in their 50s and 60s. Furthermore, with children often grown up and out of the home, there’s potentially more disposable income that can be directed towards catch-up contributions.
401(k) Catch-Up Contribution Limit
Much like with ordinary 401(k) contributions, there’s also an annual catch-up contribution limit. These limits can be adjusted periodically, making it beneficial to check annually for the most up-to-date information.
For 2023, the catch-up contribution limit is $7,500. This brings the total that 401(k) savers over 50 can contribute in 2023 to $30,000.
Catch-Up Contributions Across Multiple Plans
When it comes to catch-up contributions, 401k plans are the most popular and recognized option. But they aren’t the only ones!
This includes plans like 403(b)s, SARSEPs, SIMPLE IRAs, traditional IRAs, and Roth IRAs. These provisions are not exclusive to one employment sector or plan type; they span from non-profits to small businesses, ensuring that older workers in various fields can bolster their retirement savings as they near retirement age.
Each comes with its own contribution limits. For instance, a 403(b) or SARSEP may have the same catch-up contribution limit as a 401(k). But IRA catch-up limits are usually lower—$1,000 in 2023.
SIMPLE IRA and SIMPLE 401(k) plans could offer catch-up contributions, but they usually come with additional qualifications and restrictions.
What Should I Do When I Turn 50?
Turning 50 is not just a personal milestone but also a pivotal year in terms of financial planning. Once you’re old enough to qualify for catch-up contributions, it’s important to sit down, review your personal finances, and reassess your financial habits and goals.
To help further bolster your retirement, here are some actions you might consider once you become eligible for catch-up contributions:
Review Your Retirement Goals
Opt-In for Catch-Up Contributions
Adjust Your Budget
Stay Informed
Consult with a Financial Advisor
Benefits of Catch-Up Contributions
Making catch-up contributions is a powerful tool for those approaching retirement. Here are some of the primary benefits:
Accelerated Retirement Savings
The primary advantage of catch-up contributions is the opportunity to boost your retirement savings rapidly. Especially for those who might have fallen behind in their early years for various reasons— financial constraints, career choices, personal challenges, etc.—catch-up contributions offer a chance to make up for lost time.
Leveraging Tax Benefits As Retirement Approaches
In the last 10-15 years before retirement, making the most of every financial strategy at your disposal is pivotal.
With catch-up contributions, you’re adding to your savings and tapping into significant tax benefits. By deferring income tax on these additional contributions, you’re optimizing your present-day tax situation, which is particularly beneficial if you’re in a higher tax bracket during these peak earning years. You can use these tax savings to accomplish pre-retirement goals like paying off debt or bolstering your emergency fund.
Moreover, your 401(k) investments continue to grow tax-deferred. This maximizes the compound growth potential of your contributions, allowing your money to work harder for you in the crucial home stretch before retirement. The combined effect means that your retirement savings can see a substantial boost, helping secure your desired lifestyle during your golden years.
Optimizing Retirement Savings with Roth 401(k) Options
If your employer provides a Roth 401(k) option, catch-up contributions become even more strategic.
While Roth 401(k) contributions are made after taxes, their earnings grow tax-free. When it’s time to tap into these funds during retirement, your withdrawals are entirely tax-free.
By utilizing catch-up contributions with a Roth 401(k), you’re effectively hedging against potential future tax increases and ensuring a stream of tax-free income in retirement. This strategy can be invaluable, especially if you anticipate being in a higher tax bracket post-retirement or foresee a taxable income surge in your later years.
By preparing now, you’re positioning yourself for a more financially stable and predictable retirement.
Enhanced Financial Security in Retirement
With extra funds in your retirement account, you’re better positioned to handle unforeseen expenses in retirement, such as medical emergencies or rising living costs. This additional cushion can make the difference between a comfortable retirement and financial stress during your golden years.
Opportunity to Maximize Employer Match
Some employers match a percentage of your contributions up to a certain limit. This is usually a pre-defined percentage of your contributions. By maximizing your own contributions, including catch-up amounts, you could potentially receive more in employer matching funds, further augmenting your retirement savings.
Peace of Mind
There’s a certain peace of mind that comes with knowing you’re doing everything possible to secure your future. By utilizing catch-up contributions, you can approach retirement with greater confidence, knowing you’ve taken proactive steps to strengthen your financial foundation.
And, let’s be honest: Can we really put a price tag on reducing stress?

As an investor, retirement saver, shareholder, or even an LLC member, keeping an eye on the ebb and flow of economic indicators is crucial. Inflation is a major indicator that’s been on everyone’s mind over the past year. After the pandemic, the massive supply chain issues, and the resulting sharp rise in inflation in 2022, the rate finally shows signs of cooling down closer to where we were in March 2021. And that’s going to impact our investments and retirement plans.
Remember, the impact of economic changes like cooling inflation can vary greatly depending on your individual circumstances, the specific investments held within your retirement accounts, and your retirement timeline. Always consult with a financial advisor to understand how these changes may impact your specific situation.
With that said, what does cooling inflation mean for your retirement plans and other investments?
What Does It Mean When Inflation Slows Down?
The inflation rate is derived from the Consumer Price Index for All Urban Consumers (CPI-U, or CPI), a tool used to monitor changes in the price level of consumer goods and services.
In simple terms: when these prices go up, inflation is on the rise; when these prices go down, so does inflation.
Inflation slowing is often perceived as good news for consumers because it means the prices of goods and services are not increasing as rapidly as they were. However, for investors, the story can be more complicated, especially when it comes to how the central bank, or the Federal Reserve, responds.
Understanding the Consumer Price Index
The CPI is a statistical estimate constructed using the prices of a sample of representative items whose prices are collected periodically. It’s designed to measure changes in the price level of a set (or “basket”) of goods and services typically purchased by households. 
The annual percentage change in a CPI is used as a measure of inflation. In essence, the CPI is a gauge of the cost of living and a barometer for economic policy decisions. They also provide a measure of “core inflation,” which excludes items like volatile food and energy prices. Because these prices could be impacted by weather and other volatile, unpredictable events, they might not be a true reflection of inflation’s impact on consumers.
Federal Reserve’s Role in the Economy
The Federal Reserve, or “the Fed,” is the central banking system of the United States. It’s responsible for implementing monetary policy, regulating banks, and ensuring the financial system’s stability. One of the Fed’s main tasks is controlling inflation while attempting to keep unemployment low.
To curb inflation, the Fed can use a variety of tools. Their most common method is adjusting the federal funds rate. This move can slow economic growth and, in turn, inflation by making borrowing more expensive.
Federal Reserve officials often respond to inflation by rate hiking or raising interest rates. By doing this, they aim to slow down the economy and prevent it from overheating. In 2022, when inflation was high, the Fed began raising the interest rates and did so for ten straight months. 
However, in 2023, with inflation slowing down, these rate hikes are becoming less frequent and could stop altogether.
What This Means for Your Retirement Plan
When it comes to your retirement plan, the type of retirement account you have will largely dictate the impact a slowing inflation could have on it. For instance, those with a defined contribution plan may experience short-term fluctuations in their investment returns due to economic changes.
Here’s a look at how some common retirement plans might be affected:
401(k)s and IRAs
Defined contribution plans (such as a 401k) are often invested in a mix of stocks, bonds, and cash equivalents. With inflation slowing and the potential for lower interest rates, bond investments may offer lower yields. However, equities could potentially benefit from increased consumer spending as prices stabilize. 
Stocks: As inflation slows, companies previously pressured by rising costs may increase their profitability, potentially leading to rising stock prices.
Bonds: When interest rates fall, existing bonds with higher interest rates can become more valuable, possibly leading to capital gains for bond investors. However, the yield on new bonds would be lower. Keep in mind that bonds are fairly nuanced and intricate investments, so please consult with your financial advisor to determine how your bonds are impacted by inflation.
Cash Equivalents: Lower interest rates could mean lower returns on assets like money market funds. However, cash equivalents are considered low-risk investments. So, typically, they aren’t heavily impacted by inflation and interest rates.
Pensions
As a defined benefit plan, pensions promise a set monthly benefit at retirement. The actual payout is not directly influenced by inflation or interest rates, but these factors could impact the health of the pension recipient’s overall financial situation. For instance, pensions don’t typically receive cost of living adjustments (COLAs). So, as inflation rises, the buying power of a pensioner’s defined benefit goes down. As inflation cools, they regain some of that lost buying power.
Savings Accounts
Traditional savings accounts might actually benefit from cooling inflation. Savings accounts don’t typically offer great interest rates. In fact, they usually fall far below the inflation rate. The big difference here is that inflation can erode the value of the U.S. Dollar. So, while cooling inflation won’t offer significant growth in your savings account’s interest rate, it could help improve the value of the dollars saved within your account.
High yield savings accounts offer higher interest rates than traditional savings accounts. Unfortunately, those rates could also fall in a lower inflation environment. In some cases, the interest rates for HYSAs actually outpaced inflation. But this is situational and wasn’t true for all savers. For most, the impact of slower inflation would be similar to traditional savings accounts—the savings in these accounts would maintain their purchasing power better as inflation slows.
Social Security
For Social Security, the impact could be more direct. Social Security benefits are adjusted annually based on the CPI. With last year’s rising inflation, Social Security recipients received one of America’s biggest COLAs of all time. This year, with inflation slowing, this could mean a smaller COLA next year.
Planning Ahead
Despite the potential challenges, there are ways to safeguard your investments and retirement plans from these economic shifts. Diversification is key. It’s crucial to have a balanced portfolio that can weather different economic scenarios, including periods of high or low inflation. 
Moreover, investors need to keep in mind that the economy is cyclical. Inflation goes up; inflation comes down. These are just events in the cycle. Long-term investments are going to lose value periodically. Just keep an eye on your long-term investments to ensure they’re earning more over time. You can always move your money to safer investments during economic downturns to help minimize risk and loss.

Will the rally in equity markets that started in Oct 2022 be nothing more than a Bear Market rally doomed for failure, or is it the start of a new Bull Market for stocks? And what about Oil, Natural Gas, Silver, and Gold? Where could they be headed after 14 months of sideways consolidation? Are we at the start of a new bull cycle in commodities, or will the price action continue to lull investors to sleep with more sideways rocking? Check out what we are watching in the markets for stocks, metals, oil and food commodities.
Not intended to be investment advice. Advisory services offered through Quiver Financial Holdings, LLC. www.quiverfinancial.com 949-492-6900
00:00 Introduction
01:00 What the F did we say in May and was it accurate?
03:18 What is happening NOW in stock markets?
04:22 What are some assets that may look like opportunities?
07:40 Wrap up - What's the bottom line?

Social Security beneficiaries can expect a pay increase next year.
In 1973, Congress introduced cost-of-living adjustments, or COLAs, into law. With COLAs, those receiving Social Security benefits could see their retirement income adjusted each year to match the cost of living. These adjustments came into effect in 1975 and have helped those receiving retirement benefits maintain their buying power in retirement every year since.
Last year, Social Security beneficiaries received one of the biggest COLAs of all time when benefits increased by 8.7%. This was thanks to the sharp rise in the inflation rate (which potentially affected your retirement), which also caused a jump in the cost of living.
Recently, inflation has come down to its lowest rate in several years. Because of this, current COLA estimates are low—currently at 3%.
But what does that mean for those who plan to receive Social Security in 2024?
How do they calculate COLA?
Social Security COLAs are calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which is published monthly by the Bureau of Labor Statistics. The CPI-W helps us understand the way changes in prices might affect the workers listed: those who earn wages or perform clerical work. To find the COLA, experts compare the CPI-W of the current year’s third quarter with that of the previous year’s third quarter. If they see an increase, they announce a COLA for the following year.
6 things you need to know about COLA 2024
As we near the third quarter of the year, it’s natural for many to speculate what the COLA for 2024 might be. While the news speculates about what that could mean for those receiving Social Security next year, there are a few things you should know about the potential increase.
1. The increase happens automatically
There is absolutely nothing current Social Security beneficiaries must do to receive their COLA increase. Once the Social Security Administration puts it into place, it’s official: your benefits increase that December. Because of the way benefits get paid, you should see the increase reflected in your checks the following January.
2. Last year’s COLA was the biggest in 40 years
This might be a shocking statistic for the Boomers, but the most recent COLA increase of 8.7% was the biggest since 1981. That year, benefits increased by 11.2% to meet the cost of living. In fact, the 8.7% increase was one of the most significant increases in history, being the 4th-biggest increase since the first COLA in 1975.
3. Last year’s adjustment outpaced the cost of living
In 2023, Social Security benefits increased by 8.7%. That amount is higher than the actual cost of living increase reported by the CPI-W every month this year. June’s CPI-W shows only a 2.3% increase over June 2022.
This means some beneficiaries may have received more than they needed this year. Keeping those extra funds in savings could be helpful if next year’s low increase doesn’t meet beneficiaries’ needs. And if the 3% increase proves not to be enough, make sure to check out our money-saving tips for retirees.
Remember that this is all an effort to predict the future; they sometimes make mistakes. For instance, 2022’s COLA increase was misjudged, and Social Security benefits fell short of the actual increase in the cost of living.
4. The total increase isn’t set yet
Because the increase is based on the CPI-W for the entire third quarter, it’s not yet set in stone. For that, we have to wait for the quarter to end on September 30th. The final decision on next year’s COLA should be announced the following month. The current estimate of 3% could change between now and October. In fact, this amount already reflects recent changes: the Senior Citizens League had previously announced an estimate of 2.7%, only increasing it to 3% after June’s CPI-W.
5. Your increase is based on your current income
It’s important to remember that the COLA increases Social Security income by a percentage, not a dollar amount. This means that Social Security benefits increase differently for every recipient. For the average Social Security benefit recipient, a 3% COLA would be an increase of roughly $53.60 per month.
6. A new bill could offer expanded benefits
Senators Bernie Sanders and Elizabeth Warren, along with some of their colleagues, introduced a bill to Congress last year that would expand Social Security benefits even further. It didn’t get passed, so they re-introduced it earlier this year. If it wins approval this time, the bill will give Social Security recipients an additional $200 a month, or $2,400 a year—a welcome addition to those seniors who’ve seen annual cost-of-living increases fall short.
As written, the bill would also help Social Security remain solvent for at least the next 75 years, helping to guarantee retirement benefits for nearly a century.
Another bill, introduced earlier this year by Representative John Larson, would permanently increase Social Security benefits by 2% for all recipients and adjust COLAs to more accurately reflect the cost of living increases faced by seniors.
As of today, neither of these laws has passed yet. However, similar bills are introduced almost every year. So, if these don’t pass, Congress will likely try again next year.