You, Your Retirement, and the SECURE Act

You may have missed the news – buried in a much bigger spending bill and passed in the thick of the holiday season. But after months of nearly bringing it to the finish line, it’s now official: the Setting Every Community Up for Retirement Enhancement (SECURE) Act was signed into law.

 

 

The SECURE Act provides a mixed bag of incentives and obligations for retirement savers and service providers alike. Its intent is to make it easier for families to save more for retirement.

That said, “easier” doesn’t necessarily mean less complicated. The following is an overview of the most significant changes that we see for you (our clients), as the SECURE Act starts rolling out in 2020.

 

Tax-Favorable Retirement Saving

Compared to previous generations, more Americans are living longer, remaining employed into their 70s, and shouldering more of the duty to fund their own retirement. As such, the SECURE Act includes several incentives to start saving sooner and keep saving longer.

  • Initial RMD increases to age 72 – Until now, you had to start taking Required Minimum Distribution (RMDs) out of retirement accounts at age 70 ½. RMDs are then taxed at ordinary income rates. Now, you don’t need to begin taking RMDs until age 72. However, if you turned 70 ½ in 2019 or earlier there is no change; the new rules begin for those turning 70 ½ in 2020.  Rules for qualified charitable distributions (QCDs) and Roth IRA withdrawals remain unchanged.
  • IRA contributions for as long as you’re employed – If you work past age 70 ½, you can now continue to contribute to either a Roth or a traditional IRA. Before, you could only contribute to a Roth IRA after age 70 ½.
  • Expanded participation for long-term, part-time employees – Even if you’re a part-time employee, you may now be able to participate in your employer’s 401(k) plan.

> SEE MORE

Waypoint Wealth Management

Posted by:

Waypoint Wealth Management

Can You Relate To Any of The “Five Stages of Retirement”?

“Retirement is a journey with five distinct stages, and some people get stuck.  Understand them, know which stage you are in, and know how to move forward.”  -Alan Spector

 

I recently attended a conference where I had the privilege to hear from author Alan Spector.  He and his partners interviewed hundreds of retirees to discover what creates a fulfilling retirement and wrote a book (or a guide, really) to help others with this life transition.  It has numerous stories, exercises, and questions to assist with the non-financial, “life planning” aspect of retiring.  Since most of you (our clients) are in or nearing retirement, this is something that I have a deep interest in as well.  There are so many great takeaways and lessons the book provides, and I would highly encourage anyone interested to check it out (link here) and/or review their website (link here) to explore this for you or someone you know.

 

One of the enlightening sections of the book is the “Five Stages of Retirement.” I literally can see the faces of various clients across all stages when I read through these.  As I share these with you, see if you can identify yourself with one of these stages (borrowed from the book, with permission from Alan): > SEE MORE

Waypoint Wealth Management

Posted by:

Waypoint Wealth Management

Thinking Differently About Investing

I can remember having that “light bulb moment” early in my career.  It was the late 90’s, and I was eager to find out what the “secret sauce” was that gave investors an edge.  I can remember analyzing the past performance of many, many money managers and continually discovering a common theme.  Those managers with better long-term track records proudly admitted that they paid less attention to shorter time frames.  They didn’t care what the stock market was going to do in any one, three, or even five year period.  Those who ended up with better returns than most of the other managers cared more about holding onto the stocks of businesses for longer periods of time and didn’t allow short-term volatility to get under their skin.

 

 

This is how it began to dawn on me: maybe it wasn’t important to try and figure out what the market was going to do, in order to be a successful investor.   > SEE MORE

Pete Dixon, CFP®

Posted by:

Pete Dixon, CFP®

Partner and Advisor

How Should We Rank The World?

Maybe you wonder as you peruse the global news headlines with your morning coffee:  “What really IS inside my international investments, anyway?”  Or “Did Turkey’s stock market really go up by 252% in 1999?” Okay, maybe that’s a stretch and you’re not wondering about that.  While we certainly hope that’s not on your mind, we do think it’s interesting to peek into the world of our investments and point out the messy truths of international diversification–especially with this area of portfolios doing very well as we head to the end of the first half of the year.

Let’s expand on last month’s post (here), where we reviewed the size (market cap) of markets worldwide.  What if we could see the last 20 years’ annual performance, in order, for 41 various countries across the globe?  More importantly, what can we learn from it?  The picture below ranks the annual stock market performance for developed global markets (from highest to lowest) over the last 20 years:

Click here to view an enlarged image

What can we take away from an image like this, to help us to be better investors?   > SEE MORE

Pete Dixon, CFP®

Posted by:

Pete Dixon, CFP®

Partner and Advisor

Tax Savvy Investing, Part 1: Keeping More For You

 

Most people think the best time to attempt to reduce their tax bill is around now – because it is, well, tax time! The truth is, the best way to minimize your annual tax costs is to engage in year-round tax-wise investing.

> SEE MORE

Waypoint Wealth Management

Posted by:

Waypoint Wealth Management