Winning at Tennis and Markets

Stocks are like tennis: Even having just a marginal winning percentage can lead to long-term success. Check out This VIDEO

How Much Impact Does the President Have on Stocks?

The anticipation building up to elections often brings with it questions about how financial markets will respond. But the outcome of an election is only one of many inputs to the market. Our interactive exhibit examines market and economic data for nearly 100 years of US presidential terms and shows a consistent upward march for US equities regardless of the administration in place. This is an important lesson on the benefits of a long-term investment approach.

Ignoring the Bumps

There’s an important message here about not overreacting during a downturn—it could be a momentary blip in an otherwise upward climb for the markets. In fact, the Russell 3000 had an intra-year decline of at least 10% in 25 out of 45 years since 1979. In 17 of those 25, the index ended up for the year!

Check out this article by Wes Crill, Senior Investment Director and Vice President of Dimensional Funds HERE.

9 Facts About Retirement

Retirement can have many meanings. For some, it will be a time to travel and spend time with family members. For others, it will be a time to start a new business or begin a charitable endeavor. Regardless of what approach you intend to take, here are nine things about retirement that might surprise you.

1. Many consider the standard retirement age to be 65. One of the key influencers in arriving at that age was Germany, which initially set its retirement age at 70 and then lowered it to age 65.1

2. Every day between now and the end of the next decade, another 10,000 baby boomers are expected to turn 65. That’s roughly one person every eight seconds.2

3. The 65-and-older population is one of the fastest-growing demographics in the United States. In 2022, there were 58 million Americans aged 65 and older. That number is expected to increase to 82 million by 2050.3

4. Ernest Ackerman was the first person to receive a Social Security benefit. In March 1937, the Cleveland streetcar motorman received a one-time, lump-sum payment of 17¢. Ackerman worked one day under Social Security. He earned $5 for the day and paid a nickel in payroll taxes. His lump-sum payout was equal to 3.5% of his wages.4

5. Seventy-three percent of retirees say they are confident about having enough money to live comfortably throughout their retirement years.5

6. The monthly median cost of an assisted living facility is nearly $5,000, and seven out of ten people will require extended care in their lifetime.2

7. Sixty-four percent of retirees depend on Social Security as a major source of their income. The average monthly Social Security retirement benefit as of January 2024 was $1,907.5,6

8. Centenarians – there are 108,000 of them as of 2024. By 2053, this number is expected to increase to 513,000.7

9. Seniors aged 65 and over spend over four hours a day, on average, watching TV.8

Conclusion

These stats and trends point to one conclusion: The 65-and-older age group is expected to become larger and more influential in the future. Have you made arrangements for health care? Are you comfortable with your investment decisions? If you are unsure about your decisions, maybe it’s time to develop a solid strategy for the future.

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1. SSA.gov, 2024
2. Genworth.com, 2024
3. PRB.org, 2024
4. Social Security Administration, 2024
5. EBRI.org, 2023
6. SSA.gov, 2024
7. PewResearch.org, January 9, 2024
8. BLS.gov, 2024

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Navigating Tax Season 2024: What You Need to Know

By Ryan O’Donnell and Mike O’Donnell

Filing taxes can be a daunting task, especially considering the ever-changing landscape of the American tax code. As we approach the April 15 (or April 17 for Maine and Massachusetts residents) deadline, it's essential to stay informed about the latest updates and changes that may impact your tax return.

1. The IRS's New Direct File Program
   The IRS has introduced a new Direct File program, offering free electronic filing options for taxpayers with relatively simple tax situations. This service will be available in mid-March for residents in select states, providing a convenient way to file your taxes online. However, eligibility criteria apply, so be sure to check here to see if you qualify.

2. Electric Vehicle Tax Credits
   If you've recently purchased an electric vehicle, you may be eligible for tax credits of up to $7,500. However, the eligibility rules have tightened, requiring your income and the car price to fall below specific thresholds. Additionally, there are criteria regarding the vehicle's manufacturer, suggested retail price, and assembly location. Those criteria can be found on the US Department of Energys’s website.

3. Energy-Efficient Home Improvement Credits
   The Inflation Reduction Act has made tax breaks more generous for energy-efficient home improvements. Taxpayers can now claim up to $1,200 annually for certain improvements made through 2032. Additionally, credits are available for various new water heaters, heat pumps, and boilers, providing incentives for environmentally friendly upgrades.

4. Potential Changes to the Child Tax Credit
   While there may be potential midseason changes to the child tax credit, taxpayers are advised not to delay filing. Regardless of any adjustments, the IRS will be able to pay any refunds due retroactively, eliminating the need for amended returns.

5. Adjustments for Inflation
   The IRS has adjusted federal tax brackets and deductions to account for high inflation. This includes increases in income thresholds for various tax brackets and standard deductions, offering some relief to taxpayers amidst rising prices.

6. Reporting Cryptocurrency Transactions
   Taxpayers who have engaged in cryptocurrency transactions should ensure they accurately report their income. While brokerage firms may soon be required to report transactions on digital assets, taxpayers are responsible for reporting all income, regardless of whether they receive tax forms.

7. Retirement Account Changes
   A recent law allows retirees to delay making required minimum withdrawals from tax-advantaged retirement accounts until the age of 73. This adjustment offers retirees more flexibility in managing their finances as they transition into retirement.

As tax season unfolds, it's crucial to be aware of these changes and take advantage of any available deductions or credits. Whether you're filing electronically through the IRS's Direct File program or seeking guidance on tax credits for electric vehicles and home improvements, staying informed can help ensure a smooth and successful tax filing experience. Remember, the deadline is approaching, so don't wait until the last minute to file your taxes and maximize your potential refunds or credits.

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**This is intended for informational purposes only and should not be construed as tax advice. Taxpayers are encouraged to consult with a qualified tax professional to discuss their individual tax situation and ensure compliance with relevant tax laws and regulations.

1. https://www.irs.gov/about-irs/strategic-plan/direct-file

2. https://fueleconomy.gov/feg/tax2023.shtml

3. https://www.irs.gov/credits-deductions/home-energy-tax-credits

4. https://www.irs.gov/filing/federal-income-tax-rates-and-brackets

5. https://www.irs.gov/retirement-plans/retirement-plan-and-ira-required-minimum-distributions-faqs