Olistico Wealth

We are nearly halfway through the year, and now's the perfect time to review and reassess your finances to ensure you're on track to pursue your goals!

There’s certainly a lot to take into consideration…

What are your top concerns?

1️⃣ Having enough saved for the retirement you envision

2️⃣ Caring for aging parents

3️⃣ Considering all factors when positioning your investments

4️⃣ Managing healthcare costs

5️⃣ Legacy and estate strategies

6️⃣ Career goals or possible career transition

A mid-year financial review is an excellent opportunity to:

✅ Assess your progress toward your goals

✅ Stress test your investment strategy

✅ Check in on your insurance coverage

✅ Review your estate and revisit your beneficiaries

✅ Update your approach to reflect any new goals you now have

Take the time to review, reflect, and realign your strategy. We are by your side to guide you along the way. Don't hesitate to reach out if you have any questions.

Happy Father's Day to all the dads out there!

Fathers wear many hats—they're role models, protectors, cheerleaders, and teachers. They've guided us through life's challenges with wisdom and experience and helped shape us into the individuals we are today.

From teaching us the value of hard work to instilling the principle of living within our means, many of our fathers laid the foundation for our financial futures.

And most importantly, they've taught us that money, while important, isn't everything. The richness of life lies in relationships, experiences, and continuous learning.

To all the fantastic dads out there, Happy Father's Day! Your love, guidance, and unwavering support mean the world to us. Thank you for being our rock and our guiding light.

Have you considered opening a Roth IRA for your child?

As many know, Roth IRA contributions are made with after-tax dollars, so your child will only pay taxes (and perhaps penalties) once they make withdrawals.

What you may not realize is how flexible they are:

-Your child can withdraw up to the amount of their total contributions at any time, for any reason, without paying taxes or penalties. However, you may have to pay taxes and penalties on any earnings.

-They can also withdraw funds before 59½ and before the account is five years old for the following (keep in mind that you may be able to avoid penalties but not taxes):
- Funds can be used for qualified higher education expenses.
- First-time home purchase (up to a $10,000 lifetime limit.)
- If your child becomes disabled.
- For certain emergency expenses.
- If your child is unemployed, they can use a withdrawal to help pay for health insurance premiums.

Things to know:
- Your child must have earned income to contribute to a Roth IRA.
- You can open a Roth IRA for your child and manage it until they reach the age of majority in your state.
- The maximum contribution for 2024 is $7,000 or the total of their earned income, whichever is less.

Opening a Roth IRA for your child's summer earnings is a powerful way to teach them about saving, investing, and building long-term wealth. It's never too early to start!

Oh, and don't forget, they may need help filling out their Form W-4

If your child earns less than $14,600 in 2024, they may want to claim an exemption from withholding on their Form W-4 by writing "Exempt" on line 4(c) of the form.

With a Roth IRA, remember that to qualify for the tax-free and penalty-free withdrawal of earnings, Roth IRA distributions must meet a five-year holding requirement and occur after age 59½. Tax-free and penalty-free withdrawals can also be taken under certain other circumstances, such as the examples in the post. The original Roth IRA owner is not required to take minimum annual withdrawals.

This post is for informational purposes only and is not a replacement for real-life advice. Consider consulting your tax, legal, and accounting professionals if you have questions about completing the Form W-4.

Hope these summer financial tips are helpful! Let us know if you have any questions!

It's the season of graduations!

Whether it's from kindergarten, middle school, high school, college, or grad school, we celebrate the accomplishments of these students and wish them well in their next chapters!

Now is the perfect time to establish healthy financial habits for those heading off to college or stepping into their first job.

Here are a few tips to share with the graduates in your life:

1) Create a budget and stick to it. Track your income and expenses to understand where your money is going.

2) Look into starting an emergency fund. Aim to save at least 3–6 months' worth of living expenses.

3) Consider opening a retirement account, even if it's a small amount. The power of compound interest can work wonders over time.

4) Learn about investing, consult with professionals, and consider starting early.

Congratulations to all the graduates! Here's to your future and your success!

Stocks rallied in May as investors welcomed upbeat Q1 corporate reports and signs of a Goldilocks economy - not too hot, not too cold. The Dow crossed 40,000 for the first time after cooler inflation data raised hopes for a potential rate adjustment.

Monthly Market Insights | June 2024 Stocks rose in May as investors cheered upbeat Q1 corporate reports and signs that the economy was still strong while not overheating.

As you can see from this chart (courtesy of YCharts), the correlation between the Standard & Poor’s 500 stock index and the Bloomberg US Aggregate 1-year total return is quite high. In other words, stocks and bonds are moving in the same direction.

The traditional diversification benefit of these asset classes moving in opposite directions has been more limited in recent years. But there's more to diversification than just correlation. Remember, diversification is an approach to help manage, but not eliminate, investment risk.

As markets shift, our diversification approaches must also evolve. Exploring asset class differentiation strategies alongside active management may be key. In today’s environment, looking beyond broad asset classes to differentiated segments might enhance diversification.

Financial professionals who understand the nuances of modern diversification strategies are invaluable guides in crafting a well-diversified portfolio that aligns with your unique goals and risk tolerance.

The S&P 500 is an unmanaged index considered to represent the U.S. stock market. The Bloomberg US Aggregate 1-year total return is also an unmanaged index. Individuals cannot invest directly in an index.

A few years ago, there were ads from financial services companies asking, "What's your number?"

The "number" represents the amount of money you need to retire comfortably.

While this question may have been an effective way to spark conversations about retirement, we believe that it doesn't paint the complete picture.

One of the most important parts of orchestrating your retirement income strategy is determining which assets to take and in which order.

There is no one formula; every situation is unique, but there are some general guidelines that can help when creating a withdrawal strategy.

Check out the latest blog post on our website to learn more, and if you would like to review your current plans to make sure you’re on track, please don't hesitate to reach out.

https://www.olisticowealth.com/blog/how-much-do-you-need-to-retire

Wall Street has its own language and adages…

One common phrase is "Sell in May and Go Away," suggesting that the market’s performance is typically weaker from May through October. Although there is some loose historical basis, market timing has well-documented limitations.

While these sayings may sometimes hold a kernel of wisdom, more often, they are just something that catches our attention and makes for an interesting table topic.

Here are a few others that come up in conversations on occasion…

1. "Markets Climb a Wall of Worry": This phrase means that the stock market often rises, even amid negative news or uncertainties.

2. "Stocks Take the Stairs Up and the Elevator Down": This maxim reflects the fact that stocks often rise gradually over time but can drop rapidly in a market downturn.

3. "Everyone Looks Like a Genius in a Bull Market": Soaring stocks make everyone seem like financial wizards in a bull market. Success isn't always a reflection of expertise.

Although phrases such as these can be entertaining, and even convincing at times, we are here to take the emotional aspect out of the investment process and guide you to success through proven long-term market principles.

Are you letting your emotions drive your investment decisions? Behavioral investing can lead to costly mistakes. By providing objective guidance and strategies, we are here to limit emotional decisions and help you achieve your long-term financial goals.

April's stocks took a hit due to rising inflation and mixed economic news, despite a late-month rally fueled by strong Q1 reports from two mega-cap tech stocks.

Monthly Market Insights | May 2024 Despite a late-month rally, stocks fell in April as investors struggled with a hotter-than-expected inflation report and mixed news about the economy.

The Fed has announced a pivot from a tight monetary policy to a more accommodating approach. Here's what you need to know:

▪️ Fed Chair Jerome Powell said in December that interest rates could be cut as much as three times this year, but he didn’t indicate when the cuts may start.
▪️ In December, he said no cuts until inflation is still heading toward the Fed’s 2% target.
▪️ During Congressional testimony in March, Powell reinforced his belief that the Fed would cut rates in 2024 but again wouldn’t commit to a time frame.
▪️ He also stressed that he wants to see more evidence that inflation is trending back to the Fed’s 2% target.

The Fed Chair has indicated that the next move for rates will be lower. So, a pivot has taken place, but the follow-through with lower rates has yet to begin.

Among American couples with at least $100,000 in investable assets, just over half (52%) do not have any estate plan, 41% have no financial plan and 39% have yet to create a plan for how to replace their current income in retirement.

We are here to help.

www.olisticowealth.com

Did you know that the estate tax exemption may be cut by more than 50% at the end of 2025?

When the Tax Cuts and Jobs Act (TCJA) expires at the end of 2025, there could be significant changes to federal estate and gift tax exemptions.

- Current estate exemptions are $13.61M for individuals and $27.22M for married couples.

- Pre-TCJA exemptions were MUCH LOWER: $5.49M for individuals and $10.98M for couples.

- If TCJA reverts, more individuals and couples may be subject to federal estate tax.

- If you want to take a proactive approach, there are steps you can take over the next 18 months to help avoid giving the government more than you have to.

There's no time like the present—now is the time to meet with your financial professional to review how your estate approach fits into your overall financial strategy. We’re here to help.

Filing your taxes isn't just about settling up with Uncle Sam.

It's also an opportunity to review your financial strategy and make adjustments based on new developments in your life and any changes or additions to your goals.

Take time now to reflect.

- Did you have any major life shifts in 2023—a marriage, baby, new job? You may want to consider updating your beneficiaries.
- Have you received a bonus or inheritance? One idea might be to direct a portion toward shoring up retirement investments.
- If you have children and haven’t developed a college strategy, now may be a good time to explore various approaches.
- Are you reaching a new stage of life? Recalibrate budgets and timelines for new priorities.

One thing is clear: Tax management can play a role when creating a financial strategy. We are here for you if you would like to review your approach in light of any of these suggestions.

The stock market saw solid gains this quarter, with AI news, soft landing signs, and dovish comments from the Fed fueling investor confidence.

Quarterly Market Insights | Q1 2024 Stocks notched solid gains in the first quarter as enthusiasm about artificial intelligence, signs of a soft landing, and dovish talk from the Fed buoyed investor confidence.

If you are a parent, you are well aware of your responsibility in helping your children grow up happy and healthy. Once they enter their teen years, the pressure can build to impart more of your wisdom. One area you shouldn’t overlook is how to handle money.

Helping your children develop basic financial skills is critical to preparing them for the decisions they may eventually make as they age. Laying a solid foundation in their formative years can help shape their lasting relationship with money.

Read our latest blog post on how to give your children the gift of financial literacy: https://www.olisticowealth.com/blog/give-your-children-the-gift-of-financial-literacy

Are election years typically good years for the stock market?

For those who are curious, there is interesting historical data regarding the market's performance during election years.

According to the 2021 Dimensional Funds report, from 1928 to 2020, the broad stock market, as represented by the S&P 500, posted positive results in 20 of the 24 election years, with only four showing negative returns.

But is an election year the best year within a four-year presidential cycle?

Interestingly, the best year in a four-year presidential cycle has usually been the third year, followed by year four, then the second, and in last place, their first year.

Of course, fundamentally, economic data and inflation trends tend to have a stronger, more consistent relationship with market performance than who wins in November.

So, although this data is interesting, the best strategy is not to let short-term occurrences like elections distract from your long-term goals.

To read more about investing in an election year, click the link below to see our latest blog post:

https://www.olisticowealth.com/blog/investing-in-a-presidential-election-year

Economists define a Goldilocks economy as one that strikes the perfect balance—not too hot, not too cold. As we enter 2024, this delicate equilibrium seems within reach. The Federal Reserve's strategic moves in 2022 aimed to rein in inflation without plunging the U.S. into a recession, resulting in a promising economic landscape.

The 2024 economic scorecard currently reads Goldilocks 1, Recession 0. While consumer inflation is gradually slowing, it remains above the Fed's 2% target. The Gross Domestic Product (GDP) shows strength, with Q1 growth forecast at 2.1%. Notably, February saw a rise of 275,000 jobs, indicating robust hiring trends. These factors collectively hint at a recession-free horizon.

In March, the Standard & Poor’s 500 stock index saw positive growth. The stock market's forward-looking nature suggests a hopeful future, prompting questions about a prolonged Goldilocks era. Remember, past performance is no guarantee of future results.

Reflecting on the challenges of 2023, the outlook for the remainder of 2024 appears bright.

Stay tuned for more updates!

#2024

If you are currently caring for a child experiencing a disability or know someone who is, it may be advantageous to consider a Special Needs Trust.

What is a Special Needs Trust?

It's a legal arrangement that allows a disabled or chronically ill person to receive income while managing their eligibility for the public assistance disability benefits provided by Social Security, Supplemental Security Income, or Medicaid.

The challenge: The SECURE Act in 2019 added complexity to how these types of trusts could be set up, resulting in limitations on their usefulness.

HOWEVER, the SECURE 2.0 Act included a modification to help rectify this situation.

SECURE 2.0 clarifies that, in the case of a Special Needs Trust established for a beneficiary with a disability, the trust may provide for a charitable organization as the remaining beneficiary without triggering the truncated payout period.

It's important to remember that using a trust involves a complex set of tax rules and regulations. So, we believe it’s critical to work with professionals who are familiar with the emerging rules and regulations.

Don't hesitate to reach out if you are interested in learning more about Special Needs Trusts and the valuable role they can play in your overall estate strategy.

February saw modest gains thanks to upbeat corporate reports and investor enthusiasm regarding artificial intelligence.

Monthly Market Insights | March 2024 Stocks notched solid gains last month as upbeat corporate reports and investor enthusiasm surrounding artificial intelligence overshadowed the Fed’s next move with interest rates.

February isn't over yet, but the Cleveland Fed has released its projections for a few key economic markers.

Why are these markers important?

The Fed likes to look at the Consumer Personal Expenditures (CPE) to gauge whether or not their plan to curb inflation is working. The projected CPE for February is 2.27, trending towards the 2% the Fed is looking for before announcing that inflation has been under control. Given the Fed's caution about reducing interest rates until the CPE is holding steady at 2% or lower, the Fed will likely only reduce interest rates once these markers are met.

In the meantime, stay focused on your financial goals, and if you have any questions/concerns, please don't hesitate to reach out.

Still paying off student loans (Medical, Undergrad, Graduate, etc.)? You may want to know...

SECURE Act 2.0 allows employers to match employee student loan repayments with matching payments to retirement accounts.

- Matches apply to qualified student loan payments made to repay loans for higher education.
- Employees self-certify that they made payments that year.
- Matches can be made annually.

The new rules give employers an attractive benefit to offer workers an extra incentive to save for retirement while paying off educational loans.

Connect with us to understand how this might apply to you or your business.
www.olisticowealth.com

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Love is in the air—but are you letting money stress get in the way?

According to a study by the AICPA, 73% of married or cohabiting Americans experience relationship tension due to financial decisions.

Here are five common points of financial friction.

1. Financial “Infidelity”
A National Endowment for Financial Education poll revealed that 39% of respondents have hidden financial information from their partners, and 21% have lied about finances.

2. Divergent Financial Goals
Couples may be at odds over decisions like owning a vacation property or engaging in expensive hobbies.

3. Lack of Open Communication
If one partner makes the most significant financial decisions, the other may feel unempowered and unheard.

4. Incompatible Spending Habits
Different attitudes towards spending can lead to disagreements and resentment.

5. Income Disparity
When one partner earns more, this can cause tension, feelings of inferiority, or an imbalance of power.

Relationships require consistent effort and open communication. We are always looking out for our clients, and we are happy to help you and your spouse discuss how to strengthen your relationship with your finances.

January's markets saw modest gains thanks to positive economic data and upbeat Q4 corporate reports which helped support prices.

Monthly Market Insights | February 2024 The Dow Jones Industrial Average advanced 1.22 percent, while the Standard & Poor's (S&P) 500 Index gained 1.59 percent. The Nasdaq Composite, which led throughout 2023, rose 1.02 percent.1

The Dow reaches 38k quickly...

Last week we saw the Dow Jones Industrial Average trade and close above 38,000 for the first time ever. It took 771 days for the Dow to cross 37,000 after first crossing 36,000 in November of 2021 (the sixth longest span between any two thousand-point levels). The road from 37,000 to 38,000 was short, taking only 40 days for the Dow to set a new record high.

We can never truly predict the market, and the pace of its rallies will vary, but historically it has been worthwhile to stay the course over the long term.

What are your thoughts about where the market is headed in 2024? We would love to hear!

In trading on 1/11/24, Microsoft’s (MSFT) market cap of $2.886 trillion narrowly exceeded Apple’s (AAPL) market cap of $2.883 trillion to take the crown as the world’s largest publicly traded company. It was the first time since 11/17/2021 that MSFT has topped AAPL’s tight grip at the top of the list. The two are now going head to head for the title.

In 2023, MSFT gained 57% and AAPL gained 49%. Both companies helped lead the Magnificent Seven to an outstanding year due to developments in AI technology and positive earnings reports.

You don't have to invest in just one, but which company do you like more in the "ring" in 2024?



(Source: Bespoke)

How will your taxes and estate strategy be impacted when the Tax Cuts and Jobs Act (TCJA) sunsets at the end of this year?

If you don't know, you may want to start familiarizing yourself with the potential changes to understand how they may affect you.

There's a mixed bag of changes on the horizon, some perhaps unfavorable but others more positive!

You can deduct mortgage interest on up to $750,000 of qualified debt. In 2025, the rule is scheduled to change, and you may be able to deduct mortgage interest on up to $1,000,000 of qualified debt AND an additional $100,000 of eligible home equity interest debt.

Remember, tax rules can change without notice, and there is no guarantee that the treatment of certain rules will remain the same. This post is not intended as real-life advice, so you may want to review any specific questions about the TCJA with a tax, legal, or accounting professional.

If you'd like to learn more about the potential implications for your family, connect with us anytime.

Will your taxes and estate-planning strategy change when parts of the Tax Cuts and Jobs Act expire?

Now is the time to understand how the sunsetting of the TCJA in 2025 may impact your financial strategy.

There's a mixed bag of changes on the horizon – some considered favorable, others perhaps less so. Here's an example.

NOW: The State and Local Tax Deduction (SALT) is currently capped at $10,000 annually.

In 2025: There may be no cap for deducting state and local taxes, but deductions are expected to be phased out at higher income levels ($313,800 for couples)

Remember, tax rules can change without notice, and there is no guarantee that the treatment of certain rules will remain the same. This post is not intended as real-life advice, so you may want to review any specific questions about the TCJA with a tax, legal, or accounting professional. FMG created this content to provide insights into a topic and is not affiliated with a broker-dealer or investment advisory firm.

If you'd like to learn more about the potential tax and estate implications for your family, connect with us anytime.

Despite a challenging start to Q4 due to rising bond yields and monetary policy concerns, optimism surged with new inflation data and Fed Chair Jerome Powell's encouraging remarks, leading to a market rally.

Quarterly Market Insights | Q4 2023 Stocks moved higher in the final three months of the year as bond yields trended lower in growing anticipation of a potential Fed easing.

Have you ever wondered if you are on track with your retirement savings? We have a variety of calculators on our website to help you get the information you need. Click the link below to try our calculators!

https://www.olisticowealth.com/resource-center/calculators