S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury; London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
A NEW LAW MAY AFFECT YOUR RETIREMENT PLANS. Late last year, Congress passed the SECURE 2.0 Act into law. Many provisions of the new law are expected to help improve retirement readiness in the United States. For example, the law changes the rules that apply to required minimum distributions. Here are a few of the highlights:
Â· Retirement savers can keep their savings invested longer. Many Americans save for retirement in employer-sponsored retirement plans, Roth and Traditional IRAs, and other tax-advantaged investment vehicles. The government requires participants to begin withdrawing money from these plans at a certain age. The new law raises the age for required minimum distributions (RMDs) from 72 to 73 in 2023 and to age 75 in 2033.
That may not seem like a big deal, but it could be. Hypothetically, a person with a million dollars saved for retirement could be required to withdraw about $36,500 in RMDs at age 72. In contrast, a person with a million dollars for retirement who didnâ€™t have to take RMDs until age 75, could see the value of their savings increase by about $191,000 over three years, if they earned 6 percent a year, on average, and the interest compounded annually.
Â· Roth accounts are exempt from RMDs. Many people choose to contribute to Roth accounts in their employer-sponsored retirement plans even though the contributions are taxable. They prefer Roth accounts because any distributions are tax-free. The new law says that, starting in 2024, Roth account owners will not have to take RMDs.
Â· RMD penalty taxes have been reduced. When retirement plan accountholders fail to take full RMDs, they owe a tax penalty. In the past, the penalty was 50 percent on insufficient or late withdrawals. Now, the penalty will be 25 percent if the issue is not corrected quickly, and 10 percent if it is.
The new law includes dozens of provisions. If you would like to talk about how the changes may affect your retirement or estate plans, give us a call.
Weekly Focus â€“ Think About It
â€śLive as if you were to die tomorrow. Learn as if you were to live forever.â€ť
â€”Mahatma Gandhi, political and spiritual leader