FINANCIaL
FIELd NOTES
The Tax Rules for Roth IRA Withdrawals
In a recent meeting with a client, they had two big, unexpected expenses come up – they needed a new car, and their daughter was getting married! They were concerned about how these purchases would affect their taxes. Fortunately, they have had some money saved away in a Roth IRA that they withdrew from to help mitigate the tax burden of withdrawing all that money from a pre-tax IRA.
The Roth IRA is one of the most powerful tools in your retirement planning arsenal. Its tax advantages during the accumulation phase are well-known, but understanding the rules for Roth withdrawals is equally crucial…
Navigating Family Conversations Around Mortality
Conversations around mortality are rare. Usually, the person aging wants to avoid it, and families are more than willing to oblige, given how difficult they are to have. Because of this, end-of-life care is often not handled in a way that most would prefer.
I recently finished a book, Being Mortal, by Atul Gawande – where he shares from his perspective as a doctor how families navigated real-life scenarios, both the good and the bad. Here are my key takeaways…
Is US Market Concentration a Concern?
Over the past decade, the weight of the top 10 stocks in the S&P 500 has nearly doubled.
It’s nearly impossible for the market to be up or down without these big stocks (Apple, Amazon, Google, etc.) going in the same direction. This is not a first – in the 70s, over 40% of the market was dominated by the top 10 stocks, and even more by the “nifty fifty.” While this does introduce some risks if these companies were to be broken up or face increased competition, in general, I don’t view it as a significant concern for three main reasons…
The Origin of Negative News
I have written here before about the tactics of mass media and how they influence our decision-making. But before the mid-19th century, most media were purely informational. Newspapers came out weekly, cost on average 6 cents, and covered business and politics.
In 1833, a man named Benjamin Day created Penny Press, a newspaper that cost 1 cent. Suddenly the masses were able to read the newspaper as the cost to purchase one plummeted. The only problem was that Day was selling the newspaper at a substantial loss. At this point, he introduced what is now a widely accepted revenue model known as advertisement. He sold ad space in the newspaper that readers would see.
However, to attract advertisers, Day needed more readers. It was at this point that the type of news reported began to change drastically…
Understanding the Medicare “Donut Hole” and Tips for Navigating It
In a recent meeting with a client, they voiced frustration over a recent trip to the pharmacy. They had met their prescription drug coverage deductible and expected to pay a co-pay of $90 for an expensive drug they were taking. Instead, they were charged over $500. He called his insurance agent and was told he had reached the dreaded “donut hole” or what is officially known as the Medicare Part D coverage gap.
The “Donut Hole” is a phase in prescription drug coverage where beneficiaries experience a temporary increase in out-of-pocket expenses for their medication…
What’s Driving the Bull Market: A Wave of Earnings Growth
In the world of finance and media, there are often conflicting narratives about the state of the economy and stock market. Recently, with the S&P 500 reaching a new all-time high, there have been many voices in the media questioning the justification of the ongoing bull market.
However, a closer look at the numbers reveals that many of the companies reaching all-time highs are also significantly more profitable than they were in the past. The largest 20 US companies have grown earnings at 15% per year over the last 5 years on average…