Economic Updates & Financial Articles

Economic Updates & Financial Articles

Economic Updates & Articles:

September:

August:

July:

June:

May:

April:

 

Weekly Economic Update for 9/30/2024

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Stocks moved higher last week, continuing to build on the momentum generated after the Federal Reserve decided to cut short-term rates by 0.50 percent.

The Standard & Poor’s 500 Index gained 0.59 percent, while the Nasdaq Composite rose 0.95 percent. The Dow Jones Industrial Average added 0.62 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, gained an eye-catching 3.53 percent.1,2

Congress Passes Spending Bill

Stocks started the week tepidly but in the green, as investors mostly shrugged off Tuesday’s weak consumer confidence report. Then, at midweek, markets put on the brakes as investors appeared to take profits after a four-day winning streak.3,4

On Thursday, markets rallied on news that the final Q2 gross domestic product estimate showed the economy increased at an annual rate of 3.0 percent. Then Friday, the PCE, or Personal Consumption and Expenditures Index, showed inflation had cooled slightly more than expected in August, which some believe may influence the Fed’s decisions on short-term rates at its November meeting.5

Finally, a continuing resolution was passed by both houses of Congress last week and signed by President Biden Friday morning, assuaging concerns over a government shutdown. The resolution funds the government until December 20.6

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Net Unrealized Appreciation (NUA) Explained

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If you have built up company securities within your employer-sponsored retirement plan, you may find yourself with a range of choices when the time comes to take a distribution. If those securities have experienced appreciation, it's worth considering the potential benefits of utilizing the net unrealized appreciation (NUA) tax treatment.

Remember, this article is for informational purposes only and is not a replacement for real-life advice. Make sure to consult your tax professional to get more detailed information on any company stocks you may own and how unrealized appreciation may be used.

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Global vs. International: What’s the Difference?

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With international stock markets comprising about 40 percent of the world's capitalization as of 2023, a broad range of investment opportunities exist outside the borders of the U.S.1

For investors who are looking to diversify their mutual fund portfolio with exposure to companies located outside the U.S., there exist two basic choices: A global mutual fund or an international mutual fund.2,3

By definition, international funds invest in non-U.S. markets, while global funds may invest in U.S. stocks alongside non-U.S. stocks.

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Weekly Economic Update for 9/23/2024

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Stocks moved higher last week after the Federal Reserve’s half-point rate cut, bolstered by multiple data points supporting a cooling but still strong economy and decelerating inflation.

The Standard & Poor’s 500 Index gained 1.36 percent, while the Nasdaq Composite rose 1.49 percent. The Dow Jones Industrial Average moved ahead by 1.62 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, inched up 0.42 percent.1,2

Fed Cuts Rate 0.5 Percent

Stocks traded in a narrow range for the first half of the week as anxious investors awaited the outcome of the Federal Open Market Committee’s (FOMC) September meeting.3,4 

Shortly after 2 pm ET Wednesday, the Fed announced it was cutting rates by a half percentage point—a more significant cut than some investors anticipated. Stocks initially rose in response and then fell. Some market watchers attributed the decline to concern that the Fed might be concerned about economic growth.5,6 

But after sleeping on it, stocks rallied Thursday, with the Nasdaq, S&P, and Dow climbing 2.5 percent, 1.7 percent, and 1.3 percent, respectively. The Dow topped 42,000 for the first time, while the S&P crossed the 5,700 mark.7,8

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Counteracting Capital Gains with Tax-Loss Harvesting

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Tax-loss harvesting means taking capital losses (selling securities for less than what you initially paid for them) to offset any capital gains you may have.

While this doesn't get rid of your losses, it can help you manage your tax liability.

Keep in mind that this article is for informational purposes only and is not a replacement for real-life advice, so make sure to consult your tax or accounting professionals before implementing any tax strategy that may involve tax-loss harvesting.

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What to Look for in Personal Finance Apps

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Mobile applications have become ubiquitous. While many of these apps are games and social media platforms, an increasing number have been developed to help individuals with their personal finances. Which leads to an interesting question: what should you look for in a personal finance app?

Category

One of the first things to consider is what type of financial apps may be most useful. Five basic categories of these apps exist:

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Weekly Economic Update for 9/16/2024

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Stocks rallied last week as investors received better-than-expected consumer and producer inflation data.

The Dow Jones Industrial Average rose 2.60 percent, while the Standard & Poor’s 500 Index gained 4.02 percent. The Nasdaq Composite led, picking up 5.95 percent as tech stocks rebounded. The MSCI EAFE Index, which tracks developed overseas stock markets, rose 1.01 percent.1,2

A Wednesday to Remember

Stocks bounced out of the gate at the start of the week as “risk on” investors made moves before the pending release of the twin inflation reports–the Consumer Price Index (CPI) and Producer Price Index (PPI). The three major averages added slightly more than 1 percent in Monday trading.3

On Wednesday, stocks initially dipped following the release of the CPI as traders appeared disappointed by the report. By midday, sentiment changed. The S&P 500, down as much as 1.6 percent in early trading, gained 1.1 percent by the closing bell. More inflation data out Thursday showed wholesale price increases were tempered, which helped stocks move higher through the balance of the week.4,5

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Split Annuity Strategy

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When financial markets turn volatile, some investors show their frustration by fleeing the markets in search of alternatives that are designed to offer stability.

For example, in the first quarter of 2020, the S&P 500 lost nearly 20% of its value, over $5 trillion, due to market volatility.1

For those looking for a way off Wall Street’s roller-coaster ride, annuities may offer an attractive alternative.

Annuities are contracts with insurance companies. The contracts, which can be funded with either a lump sum or through regular payments, are designed as financial vehicles for retirement purposes. In exchange for premiums, the insurance company agrees to make regular payments — either immediately or at some date in the future.

Meanwhile, the money used to fund the contract grows tax-deferred. Unlike other tax-advantaged retirement programs, there are no contribution limits on annuities. And annuities can be used in very creative and effective ways.

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Fallen Tree Damage—Who Pays?

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As a homeowner, are you responsible for the damage caused by a tree on your property that hits your neighbor’s home or other insured structure, such as a garage or shed?

In most cases, the answer is “no.”

When such damage occurs to your neighbor’s home due to forces outside your control (e.g., weather events), your neighbors may have to file a claim with their insurer to receive a reimbursement for the damage a down tree or branches cause.

There is one exception, however.

If it is determined that the tree damage stems from your negligence (e.g., dead limbs that you refused to cut down, or you chose to trim your tree as a weekend project), then the neighbor’s insurer may come after you to recover their loss—a process called subrogation.1

You may want to check your policy or speak to your insurance agent to ascertain if your homeowners policy covers your liability in cases of negligence.

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Weekly Economic Update for 9/9/2024

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Stocks fell last week as soft economic data rattled investors focused on the Fed’s next move with interest rates.

The Dow Jones Industrial Average lost 2.93 percent, while the Standard & Poor’s 500 Index dropped 4.25 percent. The tech-heavy Nasdaq Composite fell 5.77 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, declined 2.91 percent.1,2

Economic Data Unsettles Investors

The four-day trading week got off to a rough start as weak manufacturing data reawakened recessionary fears. All three major averages were down for the first session after the Labor Day holiday. For many, it was reminiscent of August 5, when stocks tumbled as recession worries unsettled investors.3

Attention shifted to Friday’s jobs report as stocks traded narrowly. Markets initially reacted positively to news that job growth rebounded slightly and unemployment ticked down. However, selling pressure increased as the trading session progressed and investors digested the underlying data. The S&P 500 had its worst week since March 2023.4

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Consider Keeping Your Life Insurance When You Retire

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Do you need a life insurance policy in retirement? One school of thought questions this decision. Perhaps your kids have grown, and the need to help protect the household against the loss of an income-earner has passed.

If you are thinking about dropping your coverage for either or both of those reasons, you may want to ask yourself a few additional questions before moving forward.

Remember that several factors will affect the cost and availability of life insurance, including age, health, and the type and amount of insurance purchased. Life insurance policies have expenses, including mortality and other charges. If a policy is surrendered prematurely, the policyholder also may pay surrender charges and have income tax implications. You should consider determining whether you are insurable before implementing a strategy involving life insurance. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.

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Orchestrating Your Retirement Accounts

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An orchestra is merely a collection of instruments, each creating a unique sound. It is only when a conductor leads them that they produce the beautiful music imagined by the composer.

The same can be said about your retirement strategy.

The typical retirement strategy is built on the pillars of your 401(k) plan, your Traditional IRA, and taxable savings. Getting the instruments of your retirement to work in concert has the potential to help you realize the retirement you imagine.1

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Weekly Economic Update for 9/2/2024

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There were mixed results for stocks last week as upbeat economic data and a critical Q2 corporate report shaped the week.

The Dow Jones Industrial Average rose 0.94 percent, while the Standard & Poor’s 500 Index increased 0.24 percent. The Nasdaq Composite lagged, falling 0.92 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, gained 0.35 percent.1,2

Key Economic Data

Markets began the week quiet as investors awaited Q2 earnings from Nvidia, the world’s most influential name in artificial intelligence.

The chipmaker–the second largest stock in the S&P 500 by market capitalization–dipped on the news, putting pressure on the Nasdaq and S&P 500. (The Nasdaq and S&P 500 are market-weighted averages, so larger companies have an outsized impact.)3

Nvidia is mentioned to show its influence on the overall stock market. It should not be considered a solicitation for the purchase or sale of the company.

On Thursday, an upward revision in Gross Domestic Product (GDP) data boosted markets, although stocks fell later in the day. Friday’s Personal Consumption and Expenditures (PCE) data seemed to confirm that inflation remained tame, welcome news for investors who are anticipating the Fed may adjust rates in September.4

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Does Your Credit Score Affect Your Insurance Rates?

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While the vast majority of insurance companies use credit-based insurance scores to help determine the price of insurance, it is banned in the states of Massachusetts, Michigan, Hawaii, and California. Some states only allow it as a factor for property insurance like auto and homeowners insurance. Other states allow it to be used with any type of insurance.1

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Protection Against Uninsured Drivers

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About 14 percent of all motorists, or one-in-seven drivers, do not have automobile insurance, according to the Insurance Research Council.1

Having the misfortune to get into an accident with an uninsured motorist may have serious financial consequences, depending upon the state in which you reside and whether it is a “no-fault” or “tort” state.

In no-fault states, the law does not assign blame for an accident. As a result, each driver is reimbursed by his or her insurance company for any damages. In a “tort” state, insurance companies pay out claims based on the percentage of fault assigned to each driver.2

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Weekly Economic Update for 8/26/2024

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Stocks notched a solid gain as dovish comments from Federal Reserve officials boosted the market’s recovery from early August lows.

The Standard & Poor’s 500 Index rose 1.45 percent, while the Nasdaq Composite added 1.40 percent. The Dow Jones Industrial Average picked up 1.27 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, gained 2.98 percent.1,2

Dovish Week

Stocks started the week strong, rallying after Wall Street welcomed dovish comments from Minneapolis Fed President Neel Kashkari. The S&P 500 and Nasdaq each posted gains on Monday–the 8th consecutive winning session. The Dow rose for the 5th session in a row.3,4

From there, markets traded in a narrow band until Wednesday afternoon when minutes released from the July 30-31 FOMC Meeting revealed more dovish comments. On Thursday, stocks dipped ahead of Fed Chair Jerome Powell’s annual Jackson Hole, Wyoming, speech.5,6

Well-received comments from Powell on Friday boosted markets, with all three averages closing higher.7

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Retiring Wild: National Parks and You

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For many older adults, finding time to experience nature can be one of the greatest pleasures in retirement. And what better place to take in America's splendor than one of our over 400 National Park Service sites? For over a century, generations of retirees have explored these stunning landscapes, marveled at the diverse wildlife, and discovered the physical benefits of a retirement spent in the great outdoors. But recent research suggests that the mental benefits could be even more important for retirees. Read on to learn more.1

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Volunteering in Retirement

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“This generation got no destination to hold...
We are volunteers of America”
“Volunteers” by Jefferson Airplane

Those of a certain age will recall these Jefferson Airplane lyrics as a call to action, though for a different period and place. Even with the passage of time and through a lifetime of changes, the desire of baby boomers to make an impact on the world has not diminished.

Retirement is no longer about the hammock or unending hours of golf. It is a period of rejuvenation, second chances, and renewed growth. For many, this new phase includes contributing their time and talents to an organization in need.

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Weekly Economic Update for 8/19/2024

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Stocks posted solid gains last week, buoyed by robust economic data and constructive comments from Fed officials.

The Standard & Poor’s 500 Index rose 3.93 percent, while the Nasdaq Composite gained 5.29 percent. The Dow Jones Industrial Average lagged a bit, picking up 2.94 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, powered ahead by 4.31 percent.1,2

Upbeat Economic News

Three critical economic data points gave investors what they were looking for: wholesale inflation, consumer prices, and retail sales.

Both the Producer Price Index and the Consumer Price Index rose less than expected in July, reinforcing a picture of cooling inflation. The July retail sales report on Thursday was stronger than expected, which added more fuel to the week-long rally.3,4,5

Market action slowed down on the week’s final trading day, with positive consumer sentiment gains countered only by a drop in housing starts.

It was the S&P 500’s best weekly gain of the year so far and the best since November of 2023. The gains helped erase losses from earlier in the month, when “carry trades” news from Japan unsettled investors.6,7

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Deciding When to Take Social Security

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One of the most common questions people ask about Social Security is when they should start taking benefits. Making the right decision for you can have a meaningful impact on your financial income in retirement.

Before considering how personal circumstances and objectives may play into your decision, it may be helpful to preface that discussion with an illustration of how benefits may differ based upon the age at which you commence taking Social Security.

As the accompanying chart reflects, the amount you receive will be based upon the age at which you begin taking benefits.

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Protecting Your Business from the Loss of a Key Person

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Charles de Gaulle once remarked, "The graveyards are full of indispensable men." While we know that life goes on regardless of the loss of any "indispensable" person, for a small business, the loss of a key person is not only a human tragedy, but it can also represent the potential for significant financial loss.

Though business owners cannot protect themselves from the unexpected and sudden loss of a key employee, they may be able to protect themselves from the financial consequences of such a loss through the purchase of what is called "key person insurance."

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Weekly Economic Update for 8/12/2024

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Stocks ended last week with modest losses, masking a volatile five-day trading period that saw investors embrace recession concerns and then dismiss the slow-down talk as speculation as the week progressed. 

The Dow Jones Industrial Average slipped 0.60 percent, while the Standard & Poor’s 500 Index ended flat (-0.04 percent). The Nasdaq Composite dipped 0.18 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, fell 1.21 percent.1,2

Stocks Stage Comeback

Monday was the worst day for the S&P 500 and the Dow in nearly two years. As recession talk grew louder, investors took a “risk off” position.

On Monday, the Japanese market had its worst drop since 1987  as market participants unwound positions from a popular trading strategy called a “carry trade” amid a global sell-off in stock prices.3

But on Thursday, initial jobless claims fell less than expected—a positive sign for the labor markets— which quieted some of the recession talk. Also, as the week progressed, there was growing speculation that the July jobs report was more of an outlier than a lead indicator of a pending recession.

By Friday’s close, all three major averages had regained most of the week’s losses.4

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What Can You Buy With 529 Distributions?

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Some of the biggest challenges many face when it comes to education are financial. Luckily, a 529 college saving plan can help. And they're not just for college anymore - added to the tuition eligibility are K-12, private and religious schools. These funds can also be used for four and two-year colleges, trade schools, graduate programs, and some international institutions.

A 529 plan is a college savings plan that allows individuals to save for college on a tax-advantaged basis. State tax treatment of 529 plans is only one factor to consider prior to committing to a savings plan. Also, consider the fees and expenses associated with the particular plan. Whether a state tax deduction is available will depend on your state of residence. State tax laws and treatment may vary. State tax laws may be different from federal tax laws. Earnings on non-qualified distributions will be subject to income tax and a 10% federal penalty tax.

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Countdown to College

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As a parent, you of course want to give your child the best opportunity for success, and for many, attending the "right" university or college is that opportunity. Unfortunately, being accepted to the college of one's choice may not be as easy as it once was. Additionally, the earlier you consider how you expect to pay for college costs, the better. Today, the average college graduate owes $28,950 in debt, while the average salary for a recent graduate is $55,360.1,2

Preparing for college means setting goals, staying focused, and tackling a few key milestones along the way—starting in the first year of high school.

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Weekly Economic Update for 8/5/2024

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Stocks fell broadly last week as investors looked past upbeat Fed comments and focused on disappointing corporate reports and weaker-than-expected economic data.

The Dow Jones Industrial Average lost 2.20 percent, while the Standard & Poor’s 500 Index fell 2.06 percent. The Nasdaq Composite Index dropped 3.35 percent. By contrast, the MSCI EAFE Index, which tracks developed overseas stock markets, gained 0.19 percent for the week through Thursday’s close.1

Volatile Week of Trading

Stocks were under pressure early in the week as investors appeared to focus on the Fed’s meeting, which ended on Wednesday. It was a big week for Q2 corporate reports, with five of the ten largest names in the S&P 500 (by market capitalization) reporting numbers. But attention was mainly on the Fed’s meeting.2,3

Stocks rallied on Wednesday when Fed Chair Powell indicated a September interest rate cut was “on the table."4

But selling picked up on Thursday as investors' attention quickly shifted to disappointing corporate reports and weak economic data. Friday morning's disappointing June jobs report raised even more concerns about the economy's strength. The Nasdaq ended the week in correction territory, down more than 10 percent from its recent all-time high.5,6

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Retirement Is a Beginning

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How do you know you are psychologically ready to retire? As a start, ask yourself four questions.

One, is your work meaningful?

If it is emotionally and psychologically fulfilling, if it gives you a strong sense of purpose and identity, then there may be a voice inside your head telling you not to retire yet. You may want to listen to it.

It can be tempting to see retirement as a “finish line”: no more long workdays, long commutes, or stressful deadlines. But it is really a starting line: the start of a new phase of life. Ideally, you cross the “finish line” knowing what comes next, what will be important to you in the future.

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Raising Healthy Children

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One of the greatest legacies any parent can give a child is a framework for living an enduring healthy lifestyle.

It is hard to underestimate the power parents have on their children’s development, which is why parenting is such a profound responsibility.

The attitudes and habits formed in childhood can determine your child’s health in his or her adult years. Here are some ideas for parents who are looking to raise healthy children that grow up to be healthy adults.

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Weekly Economic Update for 7/29/2024

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Stocks had a mixed, see-saw week as disappointing corporate reports unsettled investors who appeared to rotate away from some leading groups in favor of other names.

The Dow Jones Industrial Average picked up 0.75 percent. Meanwhile, the Standard & Poor’s 500 Index declined 0.83 percent, and the Nasdaq Composite Index dropped 2.08 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, fell 1.49 percent for the week through Thursday’s close.1

Q2 Corporate Reports Start

Last week began with some positive momentum, but after Tuesday’s close, two influential tech companies reported disappointing Q2 numbers, which soured sentiment. On Wednesday, the S&P dropped 2 percent, and the Nasdaq fell more than 3 percent.

Stocks attempted to rebound on Thursday on news that gross domestic product grew much faster than expected in Q2, but sellers swooped in near the close.3

Stocks rallied broadly on Friday after a positive inflation report. The personal consumption expenditures index, widely considered the Fed’s preferred inflation measure, showed only a slight uptick in June—in line with expectations.4

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Starting a Roth IRA for a Teen

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Want to give your child or grandchild a financial head start? A Roth IRA might be a choice to consider. Read on to learn more about how doing this may benefit both of you.

Rules for setting up a Roth IRA. If your teen has an earned income, you may be able to set up a Roth IRA for them. For example, if your 15-year-old has earned $7,000 at a summer job, you can set up an account for them up to $7,000 (the maximum annual Roth IRA contribution). The amount cannot exceed the teen’s income. Keep in mind that money that you contribute to the Roth IRA can count as a gift within your $18,000 yearly gift tax exclusion ($36,000 for a married couple).1

Looking ahead to the future. If money is withdrawn from a Roth IRA before age 59½, a 10% federal tax penalty may apply. There is, however, a notable exception. Up to $10,000 of investment earnings can be taken out of a Roth IRA at any time if the money is used to buy a first home. In this instance, the IRS may waive the early withdrawal penalty. Should your teenager become a parent someday, a portion of those Roth IRA assets might also be utilized to pay college tuition costs for themself or their child.2,3

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Stop Wasting Money

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Benjamin Franklin once said, “a penny saved is a penny earned.” One way to find the money to meet your spending or saving needs is to examine your current spending habits and consider eliminating money wasters.

Top Money Wasters

1. Bargain Shopping…and its Expensive Cousin, Impulse Buying:

Fire sales and impulse buying (such as products sold on infomercials) can be money wasters, made worse by how often they sit idly in a closet or drawer.

2. Unused Subscription Services:

It can be tempting to sign up for the “free trials” many subscription services offer, but don’t forget to cancel after your trial period is up. Forgotten subscription services can eat away at your wealth when you don't value the subscription anymore. For example, three $30-per-month subscriptions don't sound like much until you realize they total nearly $1,100 per year.

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Weekly Economic Update for 7/22/2024

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Stocks were under pressure last week as investors appeared to rotate out of mega-cap tech stocks and into areas that may benefit from lower interest rates.

The Standard & Poor’s 500 Index fell 1.97 percent, while Nasdaq Composite Index declined 3.65 percent. The Dow Jones Industrial Average bucked the downward trend, up 0.72 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, slid 1.48 percent for the week through Thursday’s close.1

Dow Leads Again

The week began very differently than it ended.

All three averages rallied over the first couple of days this week, with the Dow leading on both days. Fed Chair Powell indicated the Fed may not wait for inflation to reach its 2 percent target before considering a rate move, buoying the markets.2,3

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Buying vs. Leasing a Car

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Some people approach buying a car like they approach marriage, "'til death do us part." Others prefer to keep their options open, trading in every few years for the latest make and model, the most cutting-edge technology, or the highest horsepower. Whichever describes you best, we all face a similar decision when it comes to acquiring a car: finance, lease, or pay cash.

When shopping for new vehicles, about one-quarter of consumers choose to lease, while the majority choose to finance. From an investment perspective, which choice is best? That depends on your lifestyle, cash flow, and personal preferences.1

For many, paying cash for a car is the simplest way to get one. When you drive off the lot, you own the vehicle outright and are free to do whatever you want with it. You face no penalties or mileage restrictions, and you have no monthly payments. However, you have paid cash for a vehicle that is expected to depreciate over time.

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Inventorying Your Possessions

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Only four in ten Americans have a home inventory, despite the fact that 3.4 million Americans were displaced by natural disasters in 2022.1,2

It’s great to have insurance against damage and loss, but if you can't show proof of your possessions, it may result in a protracted settlement process with your insurance company.

Four Tips for Creating an Inventory

Creating an inventory may take a bit of upfront work, but it can pay future benefits in smoothing the claims settlement process with your insurer and increase the potential of receiving the maximum payment possible.

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Weekly Economic Update for 7/15/2024

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Stocks advanced last week as market leadership shifted amid fresh inflation data and quarterly corporate reports starting to roll in.

The Standard & Poor’s 500 Index advanced 0.87 percent, while the Dow Jones Industrial Average picked up 1.59 percent. The tech-heavy Nasdaq Composite Index, which has led all year, rose 0.25 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, rallied 1.62 percent for the week through Thursday’s close.1

Dow Breaks 40,000 (Again)

Mega-cap tech led modest gains for the S&P 500 and Nasdaq in the first two days of the week, with the Dow posting modest losses both days.

But that narrow trading range didn’t last long as market leadership shifted midweek. Upbeat corporate earnings reports and milder-than-expected consumer inflation in June drove momentum in a handful of larger industrial and consumer stocks.2,3

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AI Tools Changing Retiree Entrepreneurship

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Artificial intelligence (AI) tools have become a game changer in various industries, and they are also proving incredibly useful for retirees looking to start consulting or a small business venture. These tools can simplify tasks, streamline processes, and help retirees navigate the world of entrepreneurship more efficiently.1,2,3

One of the biggest challenges retirees may face when starting a business is writing tasks. Writing can be difficult and tedious for some, but AI tools can help alleviate this burden. AI-powered writing assistants can generate content, proofread, and even suggest improvements. These tools use advanced algorithms to analyze text and offer better sentence structure, grammar, and vocabulary. Retirees can rely on these tools to produce high-quality written content without spending hours perfecting it themselves.

Another area where AI tools can significantly assist retirees is budgeting and bookkeeping. Managing finances can be overwhelming, especially for those unfamiliar with accounting principles. AI-powered tools can automate budgeting processes, track expenses, and generate financial reports. They can also provide real-time insights into cash flow and identify potential cost-saving opportunities. By utilizing these tools, retirees can ensure that their financials are in order and that they can make informed decisions regarding their business.1,2,3

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Avoiding Cognitive Decline

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Of those aged 60 and older, 12 to 18 percent have mild cognitive impairment. People living with mild cognitive impairment are more likely to develop Alzheimer's, and almost two-thirds of people currently living with Alzheimer's are women.1

There are three basic forms of cognitive decline associated with aging:2

  • Age-related changes in memory, which are a natural consequence of aging.
  • Mild Cognitive Impairment, which involves mild memory loss such as forgetting important events or appointments, or an inability or difficulty with finding the right word in a conversation.
  • Dementia, which includes Alzheimer's disease, is a chronic, progressive, irreversible and comprehensive cognitive impairment that may affect daily functioning.

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Weekly Economic Update for 7/8/2024

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Stocks steadily advanced over the holiday week thanks to strength in mega-cap tech issues and encouraging jobs data.

The Standard & Poor’s 500 Index rose 1.95 percent, while the Nasdaq Composite Index added 3.50 percent. The Dow Jones Industrial Average edged up a modest 0.66 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, rose 2.30 percent for the week through Thursday’s close.1

Nasdaq, S&P Extend Runs

ADP’s employment report on Wednesday showed private-sector employers added 150,000 jobs in June—slightly slower than May’s pace—adding to investor hopes that a slowing economy may prompt the Fed to adjust short-term rates as early as September. The Nasdaq and the S&P hit their 23rd and 33rd record closes, respectively, for the year.2

Friday morning’s jobs report from the Labor Department showed 206,000 jobs added last month, which also suggested a strong-but-cooling economy. News of slower job growth, slowing wage growth, and a slight uptick in unemployment helped drive down Treasury yields, and stocks finished the short week with a strong rally. The Nasdaq and S&P both closed at all-time highs on Friday.3

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Your Emergency Fund: How Much Is Enough?

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Have you ever had one of those months? The water heater stops heating, the dishwasher stops washing, and your family ends up on a first-name basis with the nurse at urgent care. Then, as you’re driving to work, you see smoke coming from under your hood.

Bad things happen to the best of us, and sometimes it seems like they come in waves. That’s when an emergency cash fund can come in handy.

One survey found that over two in three Americans are not confident that they have enough emergency savings to cover a month's worth of expenses. Another survey found that 43% of Americans said they wouldn’t be able to cover an unexpected $1,000 expense with money from their savings account.1,2

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White Elephant Inheritance

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Have you ever had to deal with a "white elephant"? Not the actual pachyderm, but what Merriam-Webster calls "a property requiring much care and expense yielding little profit" or, more simply, "something of little or no value." Of course, we're not talking about the sort of "white elephants" you might get in a humorous gift exchange over the holidays, like a tacky t-shirt that isn't even your size or an inexplicable kitchen gadget.

Not everyone has a rich uncle who will present them with a simple cash gift in his will. A "white elephant" is a gift that may cause more issues than it resolves, much as an elephant might eat an unwitting recipient out of house and home. It's an asset that comes to you via gift or inheritance and needs to be quickly sold, liquidated, or transferred to avoid further expenses of time or money. In such cases, it is crucial to understand how to disclaim an inheritance properly and avoid holding the burden. The average American household stands to inherit $46,200. Not all those bequeathments are straight cash, and some might prove inconvenient or troublesome.1

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Weekly Economic Update for 7/1/2024

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Stocks finished the last week of June and Q2 mixed as investors digested a fresh round of economic data.

The Standard & Poor’s 500 Index slipped 0.08%, while the Dow Jones Industrial Average also dipped 0.08 percent. The tech-heavy Nasdaq Composite gained 0.24 percent. The MSCI EAFE Index tracks developed overseas stock markets and rose 0.27 percent for the week through Thursday’s close.1

Nasdaq Regains Lead

Last week opened with the S&P 500 and Nasdaq heading lower, while the Dow rallied on momentum from the prior week. But by mid-week, the leadership shifted with the Nasdaq pushing higher.2

With the back half of the week packed with fresh economic data, conflicting stories developed about the economy. New home sales fell 11.3 percent in May—the largest month-over-month drop in a year and a half—while the supply of new homes hit a 16-year high. Meanwhile, first-quarter GDP revised slightly to 1.4 percent higher, and durable goods increased in May.3,4,5

Friday's personal consumption and expenditure (PCE) data showed that core inflation slowed to 0.1 percent in May over the prior month and 2.6 percent year-over-year—its lowest annual rate in three years. Both figures were in line with expectations. Stock prices initially rallied on the upbeat inflation news, but the early gains faded as the trading day progressed.6

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Catch-Up Contributions

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A recent survey found that 18% of workers are very confident about having enough money to live comfortably through their retirement years. At the same time, 36% are not confident.1

In 2001 congress passed a law that can help older workers make up for lost time. But few may understand how this generous offer can add up over time.2

The “catch-up” provision allows workers who are over age 50 to make contributions to their qualified retirement plans in excess of the limits imposed on younger workers.

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Should I Accept a Free Credit Lock?

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In today's increasingly connected world, protecting your information is arguably more important than ever. Your credit report consists of a slew of personal details, such as your financial activity, credit accounts, loans, and payment history. Because of the importance of your credit report, credit bureaus such as Equifax, Experian, and TransUnion offer credit locks to help protect consumers in the event of identity theft or fraud.

Will a Credit Lock Help?

Although a credit lock will freeze your credit report and score temporarily, there are some potential downsides as well. One of the biggest concerns is that a credit lock applies only to the selected credit bureau. So, if you want to protect your credit fully, you'll need to place a lock on all three main credit reports.

While the initial lock may be free, some credit bureaus may charge a fee to remove or temporarily lift the lock, depending on their terms and conditions. In addition, each bureau's service agreements clarify that they don't guarantee error-free operation or uninterrupted service.

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Weekly Economic Update for 6/24/2024

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Stocks edged higher over the four trading days last week, with the three major averages taking turns leading based on various economic and artificial intelligence (AI) news.

The Dow Jones Industrial Average rose 1.45 percent–its best week since May–while the Standard & Poor’s 500 Index gained 0.61 percent. The Nasdaq Composite, which has led all year, ended flat. The MSCI EAFE Index, tracking developed overseas stock markets, rose 0.94 percent for the week through Thursday’s close.1

Mixed Economic News

All three averages began the week with gains, including new highs for the S&P 500. However, stocks posted only modest gains on Tuesday as mixed economic data came in. Retail sales rose 0.1 percent—less than expected, although better than in April when sales fell.2,3,4

Markets were closed for the Juneteenth holiday on Wednesday.

As the week ended, it was the Dow’s turn to lead as sentiment shifted on mega-cap tech names as investors again questioned the sustainability of AI market drivers. Home prices hit a new high in May—this, paired with high mortgage rates, caused existing home sales to fall for the third consecutive month.4,5

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Mortgages in Retirement

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Anyone who has gone through the process of mapping out their retirement knows there can be a lot to keep in mind. Saving, investing, anticipating medical costs, and making sure you have enough tucked away for years to come is just the start. One question many people overlook is: "Should I pay off my mortgage before I retire?" The answer is more complicated than you may think.

Maintaining a Mortgage in Retirement

Opportunity Cost

Imagine you have $300,000 set aside to pay off your mortgage. But rather than using those funds to pay off your mortgage, you instead invest that money. Sure it's tempting to stop making a monthly payment, but what if that $300,000 earned a hypothetical 6% for the next five years. You would have a little more than $400,000. Yes, your house may appreciate in value over the same period of time, but you should consider all your choices for that lump-sum of money.1

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How Retirement Spending Changes With Time

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New retirees sometimes worry that they are spending too much, too soon. Should they scale back? Are they at risk of outliving their money? This concern may be legitimate. Some households "live it up" and spend more than they anticipate as retirement starts to unfold. In 10 or 20 years, though, they may not spend nearly as much.

By The Numbers

The initial stage of retirement can be expensive. The Bureau of Labor Statistics figures show average spending of $70,570 per year for households headed by pre-retirees, Americans age 55-64. That figure drops to $52,141 for households headed by people age 65 and older. For people age 75 and older, that number drops even further to $45,820.1

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Weekly Economic Update for 6/17/2024

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Stocks notched a solid gain last week, driven by the Fed’s decision, May's inflation report, and Apple’s AI-related news.

The Standard & Poor’s 500 Index rose 1.58 percent, while the Nasdaq Composite picked up 3.24 percent. The Dow Jones Industrial Average, which has lagged most of the year, slid 0.54 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, fell 1.44 percent for the week through Thursday’s close.1

S&P 500, Nasdaq Lead; Dow Lags

Market leadership took a familiar form. The tech-heavy Nasdaq led while the Dow trailed for the second week (and four out of the past six weeks).2

Stocks trended higher at the start of the week as investors cheered an artificial intelligence update from Apple.3,4

By midweek, the market had split, with the Nasdaq and S&P 500 moving higher while the Dow lagged. Investors were upbeat after learning that consumer prices rose less than expected in May and that the Fed decided to keep rates steady. However, some investors were unsettled after learning Fed officials had shifted their outlook and now only penciled in a single rate cut between now and year-end. A few months ago, the Fed had indicated as many as three cuts were possible.5

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Monthly Memberships

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In the last few years, we’ve become accustomed to many convenient services, many offered via subscriptions. Now, in the old days, if you had a few magazines or newspapers stacked up, you might not pay to continue your service. Today’s subscriptions typically offer autopay, which is convenient and quickly forgotten for many.

C&R Research reports that the average American spends $219 per month on subscriptions for things like streaming services, news websites, and even regular deliveries of our most often-used goods, such as beans or pet food.1

There is also increasing evidence that these subscriptions are getting out of hand for some households. Many find themselves with an unclear idea of how much they are spending on their services, in many cases underestimating the amounts by upwards of $100 per month.2

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Understanding Money Market Funds

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A money market fund, not to be confused with a money market account, is a type of mutual fund that invests in instruments like cash equivalents and short-term debt-based securities, which can also include U.S. Treasury Bonds.1

Safety First
These funds are designed to be easily accessible and are often considered cash equivalents. Their primary role in a portfolio is to preserve capital while maintaining liquidity. Financial professionals use them as a place to hold cash for an investor or as a place to "park cash" temporarily while they evaluate new investments. In fact, the core value of money market funds lies in their stability and liquidity, making them one place where investors can build an emergency fund.2

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Weekly Economic Update for 6/10/2024

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Stocks rose last week despite conflicting stories from economic reports.

The Dow Jones Industrial Average inched up 0.29 percent while the Standard & Poor’s 500 Index powered ahead 1.31 percent. The Nasdaq Composite led, picking up 2.38 percent. The MSCI EAFE Index tracks developed overseas stock markets and rose 1.29 percent for the week through Thursday’s close.1

All Eyes On The Jobs Report

Weak manufacturing data prompted declines early in the week, reflecting investor concerns over the economy's strength. But stocks rallied in anticipation of the jobs report on Friday.

However, the market reaction was mixed when the stronger-than-expected jobs report finally came. The S&P 500 touched a record high intraday before profit-taking late in the session.2,3

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Building a Solid Financial Foundation

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When you read about money matters, you may see the phrase, “getting your financial house in order.” What exactly does that mean?

To some, when your financial “house is in order,” it means it is built on a solid foundation. It means that you have the “pillars” in place that are designed to support your long-term financial well-being.

#1: A banking relationship. Having a relationship with a bank can play a role in many financial strategies. You have many different choices when deciding on which bank is right for you. Some banks are larger and nationally-based, while others are smaller and community-based. Different banks may have unique advantages and disadvantages, so it’s important to look around and see what each one can offer you.

#2: An emergency fund. You know that label you see on fire extinguisher boxes – “break glass in case of emergency?” Only in a financial emergency should you “break into” your emergency account. What is a financial emergency? Everyone’s definition varies, but it can range from a broken water heater to major car repairs to unemployment help.

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Mutual Funds vs. ETFs

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The growth of exchange-traded funds (ETFs) has been explosive. In 2006, there were less than 1,000; by 2023, there were nearly 10,000 investing in a wide range of stocks, bonds, and other securities and instruments.1

At first glance, ETFs have a lot in common with mutual funds. Both offer shares in a pool of investments designed to pursue a specific investment goal. And both manage costs and may offer some degree of diversification, depending on their investment objective. Diversification is an approach to help manage investment risk. It does not eliminate the risk of loss if security prices decline.

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Weekly Economic Update for 6/3/2024

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Stocks edged lower in the final week of May as fresh news on economic growth and inflation failed to inspire investors.

Stocks Slide

Markets shrugged off news that the Q1 Gross Domestic Product was revised lower to 1.3 percent from the initial estimated 1.6 percent. Despite concerns that the economy was cooling faster than expected, investors didn’t believe the update was enough to influence the Fed’s decision about adjusting short-term rates.1

On Friday, investors were on edge waiting for the update on inflation. The Fed’s preferred inflation indicator, called the personal consumption and expenditures (PCE), rose 0.2 percent in April, which was in line with forecasts.2

Stocks rose slightly in pre-market trading on the news but were under pressure throughout the day as investors digested the inflation update. But in the last hour of trading, stock staged a powerful rally led by the Dow, which had its best day of the year.

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Dog Bites Neighbor. Now What?

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In 2023, there were 19,062 dog bite claims nationwide, totaling aggregate damages of over $1 billion, according to the Insurance Information Institute.1

For most homeowners (and renters), a standard policy generally covers any legal liability that may result from their dog biting or harming another individual. Typically, this coverage is designed to extend to places outside the home (e.g., a walk in the park), but may not include what happens inside a car.2

However, this coverage is not unlimited. There is a cap to liability coverage (check your policy for the limits of your coverage), and your policy may limit such coverage to one bite.

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IRA Withdrawals that Escape the 10% Tax Penalty

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The reason withdrawals from a Traditional Individual Retirement Account (IRA) prior to age 59½ are generally subject to a 10% tax penalty is that policymakers wanted to create a disincentive to use these savings for anything other than retirement.1

Yet, policymakers also recognize that life can present more pressing circumstances that require access to these savings. In appreciation of this, the list of withdrawals that may be taken from a Traditional IRA without incurring a 10% early withdrawal penalty has grown over the years.

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Weekly Economic Update for 5/27/2024

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Last week's stock performance was mixed, following investors' reaction to the Fed's May meeting minutes, while a handful of mega-cap tech companies created a buzz with their news.

Market Splits

Stocks began trading in a narrow band last week. Still, mega-cap tech names rallied in anticipation of the Q1 corporate report from a key company that makes semiconductors for artificial intelligence (AI). The enthusiasm lifted the Nasdaq to fresh records.

Federal Reserve news mid-week unsettled investors, who reacted to Federal Open Market Committee meeting notes that stated some Fed officials worried over the lack of progress on inflation.1

Technology was the sole winning group for the whole week, with all other Standard & Poor’s 500 industry sectors ending in the red.2

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Weekly Economic Update for 5/20/2024

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Stocks notched a solid gain last week in a mega-cap, tech-led rally bolstered by positive inflation news.

Dow 40,000

The week began quietly as market averages traded in a tight range, awaiting fresh inflation news.

On Tuesday, markets rose steadily throughout the day after digesting a mixed wholesale inflation report.1

The next day, a cooler-than-expected Consumer Price Index (CPI) report sparked a broad-based rally as the upbeat news raised investors’ hopes for a rate cut. The Nasdaq Composite and Standard & Poor’s 500 (which ended above 5300 for the first time) closed the day up 1.4 percent and 1.2 percent, respectively. Meanwhile, the bellwether 10-year Treasury yield fell to 4.35 percent.2,3

Investors took a break as the week ended, mostly yawning at mixed economic data. Notably, the Dow closed just above 40,000 on Friday. 

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Weekly Economic Update for 5/13/2024

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Stocks notched a solid gain last week as rate-cut expectations paced the rally as the Q1 earnings season wound down.

Stocks Climb Steadily

Monday opened with stocks picking up where they left off the prior Friday. Stocks were still basking in the afterglow of fresh jobs data, which eased investor concerns of an overheating economy. That and reports of a possible Middle East ceasefire fueled Monday’s rally.1

Stocks hung out in a narrow trading band Tuesday and Wednesday, yawning at the sparse economic news and a handful of negative earnings results. By contrast, the Nasdaq edged lower over those two days.2,3

On Thursday, the S&P 500 closed above 5,200 for the first time since early April. The next day, stocks rallied, and the Dow clinched its eighth consecutive day of gains, the longest winning streak since December and its best weekly performance this year. Fresh data showed consumers continue to have inflation concerns for the year ahead, which was unsettling.4,5

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Estate Management Checklist

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Do you have a will?

A will enables you to specify who you want to inherit your property and other assets. A will also enable you to name a guardian for your minor children.

Do you have healthcare documents in place?

Healthcare documents spell out your wishes for health care if you become unable to make medical decisions for yourself. They also authorize a person to make decisions on your behalf if that should prove necessary. These documents may include a living will, a power of attorney agreement, and a durable power of attorney agreement for healthcare.

Do you have financial documents in place?

Certain financial documents can outline your financial wishes. If you become unable to make decisions for yourself, these financial documents can be structured to empower a person to make decisions on your behalf. These documents may include joint ownership, durable power of attorney, and living trusts.

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Immediate vs. Deferred Annuities

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Despite not being as well known as some other retirement tools, annuities account for 6.5% of all assets earmarked for retirement. With about $2.2 trillion in assets, annuities hold more funds than Roth IRAs.1

An annuity is a contract with an insurance company. In exchange for a premium or a series of premiums, the insurance company agrees to make regular payments to the contract holder. The funds held in an annuity contract accumulate tax deferred.

For individuals interested in accumulating retirement assets, annuities can be attractive because they are not subject to contribution limits, unlike most other tax-deferred vehicles. In other words, retirement-minded individuals can set aside as much money as they would like into an annuity.

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Weekly Economic Update for 5/6/2024

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Stocks notched a solid gain last week, rallying behind upbeat earnings, a dovish Fed, and mixed economic data.

Stocks Pop, Drop, Then Rally

Markets began the week with an upward bump as positive news from some mega-cap tech companies outweighed disappointing updates from other tech names.

The tone quickly changed on Tuesday as higher-than-expected Q1 wage growth triggered inflation and interest-rate anxiety—just as the Federal Open Market Committee kicked off its third meeting of the year. Each of the three major averages dropped more than 1.5 percent on the last trading day of April.1

When the Fed announced it was holding rates steady on Wednesday, stocks initially rallied on the news, but sellers got the upper hand late in the trading session, and prices ended the day slightly down.2

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Caring for Aging Parents

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Thanks to healthier lifestyles and advances in modern medicine, the worldwide population over age 65 is growing. In the past decade, the population of Americans aged 65 and older has grown 38% and is expected to reach 82 million in 2050. As our nation ages, many Americans are turning their attention to caring for aging parents.1,2

For many people, one of the most difficult conversations to have involves talking with an aging parent about extended medical care. The shifting of roles can be challenging, and emotions often prevent important information from being exchanged and critical decisions from being made.

When talking to a parent about future care, it’s best to have a strategy for structuring the conversation. Here are some key concepts to consider.

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The Anatomy of an Index

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Did you know that an estimated $13.5 trillion in assets are indexed or benchmarked to the Standard & Poor’s 500 Composite Index, including $5.4 trillion in index assets?1,2

The S&P 500 is ubiquitous – we see it on the news, read about it in the newspapers, and, very likely, see some of our own investments’ performance compared against it. For an index that represents approximately 80% of the value of the U.S. equity market, it may be worthwhile to gain a better understanding of how it works.1

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Weekly Economic Update for 4/29/2024

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Stocks staged a choppy comeback last week as investors cheered positive earnings, led by mega-cap tech stocks. The rally came to pass despite fresh data showing a slowing economy and increasing inflationary pressures.

Stocks Bounce Back. Twice.

Last week opened with a rebound rally as investors breathed a sigh of relief that Middle East tensions had eased. The market rally extended into Tuesday, with investors cheering positive corporate earnings reports. By Tuesday's market close, the S&P 500 had gained 2% for the week.1,2,3

But investor enthusiasm didn't last, as midweek saw profit taking in all three averages. Rising bond yields threw a wet blanket on market momentum; at one point, the yield on the 10-year Treasury note rose more than 40 basis points from its low earlier in the week.4

On Thursday, markets slipped on two fresh pieces of economic data: a Gross Domestic Product (GDP) slowdown and higher consumer prices. But by midday, selling pressure slowed. Stocks pushed higher on Friday behind upbeat Q1 reports from two mega-cap tech stocks, helping the S&P 500 and the Nasdaq post their best week since November.5

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Choosing a Retirement Plan that Fits Your Business

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If you have yet to develop a retirement plan for your business, or if you're not sure the plan you've chosen is the right one, here are some things to consider.

How much can my business afford to contribute?

The cost of contributions may be managed by the plan type.

A simplified employee pension plan (SEP) is funded by employer contributions only. SEP contributions are made to separate IRAs for eligible employees.1

Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) IRAs blend employee and employer contributions. For example, some employers match employee contributions up to 100% of the first 3% of compensation. Others may contribute 2% of each eligible employee’s compensation. It’s up to the employer to decide the formula based on what works best for the business.2

A 401(k) is primarily funded by the employee; the employer can choose to make additional contributions, including matching contributions.3

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Where Will Your Retirement Money Come From?

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What workers anticipate in terms of retirement income sources may differ considerably from what retirees actually experience. For many people, retirement income may come from a variety of sources. Here's a quick review of the six main sources:

Social Security

Social Security is the government-administered retirement income program. Workers become eligible after paying Social Security taxes for 10 years. Benefits are based on each worker's 35 highest earning years. If there are fewer than 35 years of earnings, non-earning years are averaged in as zero. In 2023, the average monthly benefit is estimated at $1,827.1,2

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Weekly Economic Update for 4/22/2024

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Stocks fell for a third straight week, as Fed Chair Jerome Powell's mixed but upbeat message could not offset the anxiety caused by the Middle East conflict.

Stocks Retreat

Markets began the week rattled by further escalation in the Middle East over the weekend. A bit of good news punctuated an otherwise sour Monday, as a stronger-than-expected retail sales report showed consumers were spending despite rising inflation.1,2

On Tuesday, remarks from Fed Chair Jerome Powell indicated a shift in thinking—from being confident to not-so-confident about interest rate cuts in 2024. He said rates might need to stay higher until the Fed meets their 2% inflation target.3,4

On Friday, the markets saw further declines, but investors were somewhat reassured by the perception that Thursday's retaliatory actions in the Middle East were restricted in scope.5

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How Insurance Deductibles Work

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An insurance deductible is the amount you, the insured, pay before any claim is paid by your insurance carrier. Depending upon the type of insurance, a policy may set the amount of deductible, or offer you the ability to select a deductible amount.

Deductibles serve a dual purpose: they save the insurance company money (including the administrative cost of processing small claims) and may help keep your premium costs lower.

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How to Appeal Your Property Taxes

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Between 30 percent and 60 percent of taxable property has an inflated assessment, which may lead to higher property tax bills. Moreover, typically fewer than 5 percent of taxpayers dispute their assessment.1

For homeowners who think their local government may have assessed their property's value too high, there are ways to appeal and potentially win a lower assessment, which may save hundreds or even thousands of dollars annually in future taxes.2

The procedures and requirements for challenging the assessed value of your property will differ by state, but you should consider a number of general factors.

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Weekly Economic Update for 4/15/2024

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Stocks fell last week as investors sorted through conflicting inflation reports and assessed geopolitical tensions.

Inflation Spooks Markets

On Wednesday, the March Consumer Price Index (CPI) report rattled markets, revealing that inflation accelerated slightly more than expected. Bond yields rose, and stocks retreated in response, as investors feared the news could influence the Fed’s rate decision. The 10-year Treasury yield had its highest intraday jump in three years.1,2,3

Markets rallied Thursday as investors were encouraged by the Producer Price Index (PPI) report, which measures inflation at the producer level. Unlike CPI, PPI rose less than expected, which sparked a tech-focused rally. Markets opened lower on Friday as investors wrestled with the conflicting inflation reports.

Fears of an escalating Middle East conflict also weighed on stocks during the week. Concerns about a potential weekend event led some investors to end the week in a risk-off position.4

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Intellectual Property Rocks in a New Digital Era

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How will your IP work for you in your retirement and beyond?

In 2023, the music industry witnessed a groundbreaking shift, as iconic bands like ABBA, KISS, and the Beatles embraced the digital frontier. These legendary acts showcased new digitally created content, with ABBA and KISS debuting live shows featuring their digital avatars. While this development opens up exciting possibilities for entertainment, it also raises questions about intellectual property (IP) ownership and its implications for ordinary people and their estates.

The Beatles’ so-called “final release” was a single called “Now and Then” based on a demo cassette created by John Lennon, who was tragically slain in 1980. While most of us won’t have a posthumous hit single, it’s not rare for deceased authors to have their unpublished—or even unfinished—novels see success in print and film. Famous examples include The Girl with the Dragon Tattoo by Stieg Larsson and Dragon Bones by Michael Crichton. Retired athletes have played again (at least in video games), and aging or passed actors have appeared as their younger selves in films. Another scenario might be for those who hold a patent that didn’t go into mass production during their lifetime, only to become incredibly profitable later. Here’s the big takeaway: Your IP might be more valuable than you realize, so consider consulting a legal professional who can offer guidance.

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Tax Rules When Selling Your Home

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How the gains from the sale of a primary residence are taxed has changed in recent years. If you have recently sold your home or are considering doing so, you may want to be aware of these new rules.

Home Sale

If you owned and lived in your home for two of the last five years before the sale, then up to $250,000 of profit may be exempt from federal income taxes. If you are married and file a joint return, then it doubles to $500,000.1

To qualify for this exemption, you cannot have excluded the gain on the sale of another home within two years of this sale. Please consult a professional with tax expertise regarding your individual situation.2

This profit would be excluded from your taxable income. In fact, the sale may not need to be reported unless you receive a Form 1099-S or do not meet the above requirements.

If you sold your home at a loss, unfortunately, you can't deduct the loss.

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Weekly Economic Update for 4/8/2024

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Stocks dropped last week as investors focused on “what's next” for interest rates after mixed comments from multiple Fed officials.

Fed Officials Weigh In

Stocks struggled out of the gate again last week, ending Monday and Tuesday in the red on concerns that recent economic data could derail the Fed’s plan for short-term rates.

The markets recovered Wednesday through Thursday morning when weekly jobless claims were better than expected. But stocks fell broadly Thursday afternoon following mixed comments from multiple Fed officials. All three averages ended the day down more than 1 percent for the first time in a month.1,2

On Friday, a strong jobs report gave investors much-needed confidence. The U.S. economy created 303,000 jobs in March—higher than economists’ expectations—while unemployment dropped slightly to 3.8 percent. Markets rallied after the news, but not enough to recoup all weekly losses.3

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When Should You Take Social Security

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The Social Security program allows you to start receiving benefits as soon as you reach age 62. The question is, should you?

Monthly payments differ substantially depending on when you start receiving benefits. The longer you wait (up to age 70), the larger each monthly check will be. The sooner you start receiving benefits, the smaller the check.

From the Social Security Administration’s point of view, it’s simple: if a person lives to the average life expectancy, the person will eventually receive roughly the same amount in lifetime benefits, no matter when they choose to start receiving them. In actual practice, it’s not quite that straightforward, but the principle holds.

The key phrase is “if the person lives to average life expectancy.” If a person exceeds the average life expectancy and has opted to wait to receive benefits, they will start to accumulate more from Social Security.

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How to Make the Tax Code Work for You

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By May 15, 2023, over 142 million taxpayers had dutifully filed their federal income tax returns. And they all made decisions about deductions and credits – whether or not they realized it.1

When you take the time to learn more about how it works, you may be able to put the tax code to work for you. A good place to start is with two important tax concepts: credits and deductions.

Keep in mind that the information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties.

Please consult legal or tax professionals for specific information regarding your individual situation.

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Weekly Economic Update for 4/1/2024

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Stocks were narrowly higher for the week as investors digested mixed economic news about consumer confidence. All three of the major averages posted gains for Q1 2024.

Stocks Finish Strong

Markets slipped for the first half of the four-day week as investors took a breather after the prior week's gain. Conflicting economic news on Monday and Tuesday contributed to the slide. New home sales in February slipped 0.3 percent over the prior month but increased by 5.9 percent from the prior year. Durable goods orders—everything from washing machines to helicopters—rebounded 1.4 percent in February, beating expectations and recouping some of January’s 6.9 percent drop.1,2,3

Stocks rallied on Wednesday, including a fresh record close for the Standard & Poor’s 500. An upward revision to consumer sentiment on Thursday helped the rally along. The markets are closed on Friday when the much-anticipated inflation report called the Personal Consumption and Expenditures (PCE) is released, which could set up a volatile Monday.4

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Fixed or Variable Mortgage, Which Should You Pick?

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Buying a home is the single-largest financial commitment most people ever make. And sorting through mortgages involves a lot of critical choices. One of these is choosing between a fixed or variable interest rate mortgage.

True to its name, fixed-rate mortgage interest is “fixed” throughout the life of the loan. In contrast, the interest rate on a variable-interest rate loan can change over time. The mortgage interest rate charged by a variable loan is usually based on an index, which means payments could move up or down, depending on prevailing interest rates.1

Fixed-rate mortgages have advantages and disadvantages. For example, rates and payments remain constant despite the interest rate climate. But fixed-rate loans generally have higher initial interest rates than variable-rate mortgages; the financial institution may charge more because if rates go higher, it may lose out.

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What Is a 1031 Exchange?

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If you want to add investment real estate to your portfolio, you may want to know what a 1031 Exchange is. While the rules and regulations for this tactic can get complicated, understanding the basic concepts may help you decide if this strategy is right for you.

Conducting a 1031 Exchange involves a complex set of tax rules and regulations. Before moving forward, consider working with a professional familiar with the rules and regulations. Also, this article is for informational purposes only. It is not a replacement for real-life advice, so consult your tax or accounting professional before moving forward with a 1031 Exchange.

Here’s what a 1031 Exchange is and some requirements to help you determine if you should pursue this avenue further.

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