Today, we are taking a midyear look at the financial markets for 2024, focusing on key metrics and trends influencing our investments and financial decisions.

As of our recording date of July 2nd, the S&P 500 has impressively risen over 15%, currently standing at 5,495. Bruce explains that the price-to-earnings (PE) ratio is at 20.99, indicating a slightly higher but not alarming level compared to historical averages. Jason adds that a pullback is possible despite the market’s strong performance, though they remain optimistic about the market’s upward trend through the year’s end.

We delve into the resilience of major companies within the S&P 500, such as Nvidia, Apple, and Microsoft, collectively representing a significant portion of the index. Jason discusses how these companies’ consistent earnings and product demands are likely to sustain their growth, despite potential short-term pullbacks, providing a sense of stability to our investments.

Regarding annual returns and intra-year declines, Jason notes that typical market behavior includes pullbacks, even in strong years. This year’s largest drawdown is 5%, but overall, the market is up 15%. I emphasize the potential benefits of long-term investment strategies, suggesting that market volatility can be advantageous if investments are not sold prematurely, instilling a sense of optimism in our investment approach.

On consumer finances, Jason highlights signs of financial stress due to inflation, particularly for lower-income households. Despite this, household debt service ratios remain historically low at about 9.9%, indicating relative financial health compared to the past four decades.

However, savings rates are under 4%, a concerning drop from previous years. We stress the need for prioritizing savings as part of financial planning, noting that inflation and higher living costs are squeezing household budgets. By prioritizing savings, we can empower ourselves to navigate these financial challenges more effectively.

Inflation remains a significant issue, with ongoing impacts on various sectors, especially those sensitive to interest rates like real estate and finance. I point out that inflation is proving challenging to control despite the Federal Reserve’s high interest rates. Oil prices, for instance, are still rising, complicating efforts to stabilize the economy.

Interest rates influence investment strategies, shifting preferences within portfolios. Jason notes that higher interest rates can benefit fixed-income investments while still posing challenges for businesses and consumers. Companies are grappling with higher costs and interest payments, which affect profit margins and necessitate selective investment strategies.

As we wrap up part one of our midyear review, it’s clear that inflation and interest rates remain pivotal topics. We’ll continue this discussion in part two, examining additional financial trends and providing more insights for navigating the rest of 2024.

For more information about anything related to your finances, contact Bruce Hosler and the team at Hosler Wealth Management: Visit them online at https://www.hoslerwm.com/

Or call them in their Prescott office at (928) 778-7666 or their Scottsdale office at (480) 994-7342.

For more podcast episodes, visit our podcast website at https://hoslerwm.com/protectingwealthpodcast/

Limitation of Liability Disclosures: https://www.hoslerwm.com/disclosures/#socialmedia

Copyright © 2022-2024 Hosler Wealth Management LLC, All Rights Reserved. #ProtectingWealthPodcast #ProtectingandPreservingWealthPodcast #HoslerWealthManagement #BruceHosler

In this episode of Protecting and Preserving Wealth,' we dive into Bruce Hosler's article, "Moving to Tax-Free: Eight Steps You Can Take for Success." We are joined by Bruce Hosler and Alex Koury, who walk us through these crucial steps to achieve a tax-free retirement.

We begin with the importance of sourcing and engaging trusted advisors. A team consisting of a tax planner, financial planner, estate planning attorney, and wealth advisor is essential. These professionals help navigate the complexities of current and future tax laws, ensuring a comprehensive understanding of one's financial situation.

Next, we discuss the necessity of preparing a tax plan and calculating the ideal IRA to Roth IRA conversion amount. This step involves strategic planning to balance paying taxes now to reduce future tax liabilities. Factors such as age and the size of one's IRA play a significant role in determining the conversion amount.

For those required to take minimum distributions (RMDs), Bruce emphasizes taking these distributions early in the year to avoid complications with Roth conversions. This ensures a smooth transition and avoids IRS issues.

Making the actual Roth conversion is critical. Unlike IRA contributions, Roth conversions must be completed within the calendar year. Opening a Roth IRA, if one doesn't exist, and initiating the conversion process well before year-end is crucial to avoid last-minute issues.

We then explore the Life Insurance Retirement Plan (LIRP), which provides tax-free benefits and long-term care coverage. Each spouse should have a LIRP to ensure financial flexibility and tax-free withdrawals, especially important for estate planning and tax efficiency.

When paying taxes on Roth conversions, individuals under 59.5 years of age should use funds outside their IRA to avoid penalties. Those over 59.5 can pay directly from their IRA, which can be advantageous in managing tax obligations.

Creating a dynamic financial plan with the help of professionals is the seventh step. Unlike static plans, dynamic plans adjust to life changes and financial developments, much like a GPS providing real-time directions (as opposed to the old Rand McNally atlas). This adaptability is key to maintaining a tax-free retirement strategy.

Finally, the eighth step underscores the importance of a qualified wealth manager to implement and maintain the tax-free strategy. Professional guidance ensures that the plan is executed correctly, avoiding costly mistakes and unintended tax consequences.

Overall, these eight steps provide a structured approach to achieving a tax-free retirement, emphasizing the importance of professional guidance and strategic planning.

To view the whitepaper in its entirety, please visit Moving to Tax-Free: Eight Steps You Can Take for Success!

For more information about anything related to your finances, contact Bruce Hosler and the team at Hosler Wealth Management: Visit them online at https://www.hoslerwm.com/

Or call them in their Prescott office at (928) 778-7666 or their Scottsdale office at (480) 994-7342.

For more podcast episodes, visit our podcast website at https://hoslerwm.com/protectingwealthpodcast/

Limitation of Liability Disclosures: https://www.hoslerwm.com/disclosures/#socialmedia

Copyright © 2022-2024 Hosler Wealth Management LLC, All Rights Reserved. #ProtectingWealthPodcast #ProtectingandPreservingWealthPodcast #HoslerWealthManagement #BruceHosler

In this episode of 'Protecting and Preserving Wealth,' we delve into the significant changes to the Roth Stretch IRA, resulting from the SECURE Act, that came into effect on January 1, 2020. This Act drastically altered the landscape, as it now requires inherited IRAs to be fully withdrawn within ten years, eliminating the lifetime benefit that was once the key feature of the Roth Stretch IRA.

I explain that the Roth Stretch IRA was an ideal tool for wealth transfer, providing a tax-free, lifelong income stream for beneficiaries. With the new 10-year limit, the tax-free advantage diminishes significantly. Jason emphasizes that the rising national debt and projected increases in tax rates make the loss of this tool even more impactful, given the likely increase in taxes in the future.

To address this challenge, Jason and I also introduce the concept of a two-generation tax-free legacy plan. This strategy involves leaving a portion of one's legacy as a tax-free income stream for the children's lives while also protecting these assets from creditors, lawsuits, and divorces. This plan integrates various financial disciplines, including retirement income planning, tax planning, and risk management.

We highlight that this plan is particularly beneficial for families with more savings than they need for retirement and want to ensure their children are financially secure over their lifetimes. It provides a way to manage wealth transfer in a tax-efficient and protected manner, addressing both the financial needs and the potential behavioral tendencies of the heirs.

The conversation also touches on the psychological aspect of delayed gratification, likening it to the Stanford marshmallow experiment. The two-generation plan enforces delayed gratification by structuring the inheritance in a way that promotes long-term financial stability for the heirs rather than providing a lump sum that could be mismanaged.

In conclusion, Hosler Wealth Management offers valuable insights into adjusting estate planning strategies in light of legislative changes. They invite listeners to explore the two-generation tax-free legacy plan and to contact Hosler Wealth Management for personalized advice.

To view the whitepaper in its entirety, please visit The Roth IRA is no longer the ideal wealth transfer vehicle.

For more information about anything related to your finances, contact Bruce Hosler and the team at Hosler Wealth Management: Visit them online at https://www.hoslerwm.com/

Or call them in their Prescott office at (928) 778-7666 or their Scottsdale office at (480) 994-7342.

For more podcast episodes, visit our podcast website at https://hoslerwm.com/protectingwealthpodcast/

Limitation of Liability Disclosures: https://www.hoslerwm.com/disclosures/#socialmedia

Copyright © 2022-2024 Hosler Wealth Management LLC, All Rights Reserved. #ProtectingWealthPodcast #ProtectingandPreservingWealthPodcast #HoslerWealthManagement #BruceHosler