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                    [post_date] => 2023-02-02 09:22:13
                    [post_date_gmt] => 2023-02-02 15:22:13
                    [post_content] => By Kevin Oleszewski CFP®, MST, EA, Senior Wealth Planner

Multiple retirement savings vehicles are available but having options can be overwhelming. Each option comes with different rules leading to a variance of outcomes in the short-term and long-term. It’s not that dissimilar to choosing what to eat. There are options which are satisfying in the short-term but may necessitate a more vigorous workout later to compensate. Other menu options might be less satisfying immediately but reduce the need to work out as intensely. Similar to how different foods affect the way the body is fueled, retirement contribution choices affect the fuel for retirement. How you save is just as important as how much you save.

Traditional IRA vs. Roth IRA

One example of two similar, yet very different, retirement saving vehicles are Traditional IRAs and Roth IRAs. Both are Individual Retirement Accounts meaning the account is opened and funded by the worker and are tax-advantaged accounts designed for retirement savings. Certain other types of retirement accounts are sponsored by employers and can be funded with both worker and employer contributions. Traditional and Roth IRAs can be distinguished by their tax treatment. So how do they differ and how does each fuel retirement?

Traditional IRA

The Traditional IRA is what usually comes to mind when hearing about an IRA. Often, it’s called a simple IRA, whereas a Roth IRA goes by its full name or Roth for short. The features commonly associated with an IRA include tax-deductible contributions and tax-deferred growth. Because Traditional IRA contributions are made during income-earning years for a time when earned income ends or is reduced (and tax liabilities are frequently lower), the IRA can be a nice way to reduce the current income tax liability while also targeting retirement saving goals. Traditional IRAs provide tax benefits at the point of contribution for those within the income limits for qualification of a tax deduction. Whether an employer-sponsored retirement plan is offered affects the income limits for contribution deductibility. In 2023, for example, the Modified Adjusted Gross Income (MAGI) limits are as follows:
Single / Head of Household Married Filing Jointly Married Filing Separately
No Employer Retirement Plan No Limit Phase Out $218,000 - $228,000   No Limit if spouse is not covered by a plan Phase Out $1 - $10,000   No Limit if spouse is not covered by a plan
Employer Retirement Plan Phase Out $73,000 - $83,000 Phase Out $116,000 - $136,000 Phase Out $1 - $10,000
If MAGI exceeds the limits to qualify for an income tax deduction, contributions to a Traditional IRA can still occur. The nondeductible IRA contributions will not provide in an income tax deduction, but the account will still benefit from tax-deferred growth. The trade-off for tax-deductible contributions is taxable distributions. IRA distributions can occur at any time but may be subject to an additional 10% penalty if the account owner is under age 59½. Distributions of pre-tax contributions and the earnings are includible in taxable income.  Alternatively, nondeductible contributions increase basis in the account and distribution of the basis is not taxable. The earnings, however, on non-deductible contributions are taxable.  Leaving the assets inside the account to avoid taxable distributions cannot continue indefinitely.  At age 73, a minimum amount must be distributed from Traditional IRAs. These distributions are known as required minimum distributions (RMDs), and the penalty for failure to take the distribution is 50% of the short-fall.

Roth IRA

Like the Traditional IRA, the Roth IRA (Roth) benefits from tax-deferred growth. Unlike the Traditional IRA, Roth account contributions are not tax-deductible. Roth accounts, however, have two attractive features the IRA does not offer: tax-free distributions and no required minimum distribution necessity. Because minimum distributions are not required, Roth accounts can benefit from tax-deferred growth until the account owner chooses to take a distribution. Roth assets can be used to manage taxable income during retirement by providing a tax-free stream of income and funds not withdrawn before death maintain their tax character for the account beneficiary. Only qualified Roth distributions are tax-free and penalty-free so it’s a good idea to know the requirements for a distribution to be qualified:
  • Over age 59½ AND at least 5 years has passed since the Roth was first opened and funded
  • Death or disability
  • Qualified first-time home purchase
Non-qualified distributions are subject to a 10% penalty unless an exception applies:
  • Distributions part of a series of substantially equal payments (greater of 5 years or age 59½)
  • Unreimbursed medical expenses exceeding 10% AGI
  • Medical insurance premiums after a job loss
  • Distributions not more than qualified higher education expenses (self or eligible family)
  • Distributions due to an IRS levy
  • Qualified reservist distribution
  • Qualified disaster recovery assistance distribution
Not everyone is eligible to contribute directly to a Roth IRA. Income limits, based on MAGI, exist as follows:
Single / Head of Household Married Filing Jointly Married Filing Separately
  Phase Out $138,000 - $153,000   Phase Out $218,000 - $228,000 Phase Out $1 - $10,000
Individuals not eligible to save directly into a Roth IRA could consider a backdoor Roth IRA contribution. The backdoor Roth contribution is a 2-step process beginning with a non-deductible contribution to a Traditional IRA.  Then the contribution is immediately converted to a Roth. Individuals with existing Traditional IRA balances, especially if the result of tax-deductible contributions, should work closely with their CPA because the conversion could be a taxable event. For those eligible to make tax-deductible IRA contributions and full Roth IRA contributions, it can be tough to decide which account to contribute or the best combination among the two. The maximum contribution amount to Traditional and Roth IRAs in 2023 is $6,500, and those age 50 and over may also make a catch-up contribution of an additional $1,000. That $6,500 contribution can be made entirely to a Traditional IRA, entirely to a Roth IRA, or some combination of the two as long as the contribution amount in total does not exceed the limit and catch-up amount, if applicable. Just as dietary choices have short-term and long-term implications, Traditional and Roth IRA contributions have variances in their short-term and long-term impact. Choosing which IRA works for you is best done with careful consideration, and it all starts with making the decision to build wealth for the future. For more free information from a financial professional, download a free guide for additional insights on everything from investment advice and financial advisors to tax rates and the Internal Revenue Service.
  [post_title] => Should I Open a Traditional or Roth IRA? [post_excerpt] => Multiple retirement savings vehicles are available but having options can be overwhelming. Each option comes with different rules leading to a variance of outcomes in the short-term and long-term. It’s not that dissimilar to choosing what to eat. [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => should-you-invest-in-a-roth-or-traditional-ira [to_ping] => [pinged] => [post_modified] => 2023-02-13 08:25:05 [post_modified_gmt] => 2023-02-13 14:25:05 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.carsonwealth.com/?p=17967 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [1] => WP_Post Object ( [ID] => 77450 [post_author] => 90034 [post_date] => 2023-01-25 13:02:37 [post_date_gmt] => 2023-01-25 19:02:37 [post_content] => At long last, The Carson Investment Research team is proud to officially release our 2023 Market and Economic Outlook, aptly titled Outlook ’23: The Edge of Normal. You can download the whitepaper here. As you are all painfully aware, 2022 wasn’t pretty for investors – it was the first year to ever see both stocks and bonds down 10% or more. Higher-than-expected inflation was the theme of 2022, surging to the highest level since 1981. Add an aggressive Federal Reserve and an unfortunate war in Ukraine, and the result was a very poor year for investors and growing uncertainty for the U.S. and global economies. A bleak year, no doubt, but where do we go from here? We in the Carson Research team believe there are many potential reasons to be optimistic about the year ahead. For example, Inflation already started to pull back in the second half of 2022, and 2023 may actually be disinflationary, with several factors that drove inflation higher last year reversing this year. This could allow the Fed to slow down on the aggressive policy stance, and although it won’t be easy, we think there’s an above-average chance we can avoid a recession in 2023. Much like you don’t drive looking out of the rearview mirror, to look backward to predict what could be next isn’t wise. Housing and manufacturing could be headed to recessions, but the consumer remains the most important and largest part of the economy, and they are still very healthy. Just because 2022 was a poor year for stocks and bonds doesn’t mean the same will be true for 2023 (past performance isn’t indicative of future results). Stocks and bonds could bounce back nicely, with the potential for stocks to lead the way higher and for bonds to begin meaningfully contributing to investors’ portfolios again. We expect stocks to produce a total return of between 12% to 15% in 2023. We also expect a more normal year for bonds, with most of the return coming from yield. Our expectation is that the Bloomberg US Aggregate Bond Index may produce a total return between 4% to 5% in 2023. You can read the full Outlook ’23: The Edge of Normal here. We hope you find it useful! If you’d like to discuss the report further, or talk about what 2023 might mean for your finances, please reach out. Schedule a conversation.
  The views stated in this article, are not necessarily the opinion of Cetera Advisor Networks LLC or CWM, LLC and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change with notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. [post_title] => Carson Investment Research’s Outlook '23: The Edge of Normal [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => carson-investment-researchs-outlook-23-the-edge-of-normal [to_ping] => [pinged] => [post_modified] => 2023-01-30 14:45:43 [post_modified_gmt] => 2023-01-30 20:45:43 [post_content_filtered] => [post_parent] => 0 [guid] => https://carsonhub.wpengine.com/?p=65631 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [2] => WP_Post Object ( [ID] => 77448 [post_author] => 182385 [post_date] => 2023-01-25 12:34:26 [post_date_gmt] => 2023-01-25 18:34:26 [post_content] => Mike Valenti, CPA, CFP®, Director of Tax Planning Tom Fridrich, JD, CLU, ChFC®, Senior Wealth Planner It’s January, so it’s officially tax season! One of the most common client questions heard by tax preparers is, “So, what do you need from me?” The short answer to that question is often, “Everything.” But that isn’t helpful, nor is it entirely true. Let’s dig into what your tax preparer needs from you to prepare your tax return efficiently and in a timely manner.

Communication Is Key

Your preparer should tell you when to expect the engagement letters, organizers, etc., and when they need all the information by to finalize or extend the return before the deadline. Adhering to their timeline and providing documents in the instructed manner (such as through a client portal or a secure drop box) will reduce any back and forth and minimize the chance that your preparer misses something you already provided. If you’re asked to complete a questionnaire or organizer, there’s a reason why. Those two documents cover most, if not all, of what you will need to provide for your return to be complete and accurate. Most of life’s major events have a tax impact, so it’s important to keep your preparer apprised. Marriage, divorce, births/adoptions, deaths, home purchases and sales, new business ventures and side hustles, and inheritances are a few examples of events that have tax consequences.

Documentation Needed for Your Tax Return

Any government-issued forms, such as W-2s, 1099s, 1098s, and K-1s, you receive are all reported to the IRS. If your return is missing information reported on one of these forms, the IRS and state taxing authorities will reconcile your return and issue notice adjusting the return to match what was reported. This can result in additional tax owed, plus penalties and interest. Other information, such as business income and expenses, medical expenses, charitable contributions, and some tax strategies, is not reported to the IRS and sufficient records must be maintained. Examples of income reported to the IRS:
  • Form W-2
  • Form 1099s from all sources, including:
    1. • Bank interest
    2. • Brokerage accounts
    3. • Stock dividends
    4. • Stock sales
    5. • Sale of real estate
    6. • Nonemployee business income/payments on the 1099-NEC
    7. • Social Security
    8. • Retirement account distributions and other retirement income
    9. • Cancellation of debt
    10. • Unemployment, state tax refunds, and other government payments
    11. • 529 distributions
    12. • Rents and royalties
    13. • Miscellaneous income
  • Form K-1s from all sources, including:
    1. • Trusts
    2. • Partnerships
    3. • S Corporations
Examples of expenses and contributions reported to the IRS:
  • Form 1098s from all sources, including:
    1. • Mortgage interest
    2. • Tuition
    3. • Student loan interest
  • Form 5498s with retirement account information
Examples of information not reported to the IRS and require adequate record keeping:
  • Business income and expenses
  • Medical expenses
  • Charitable contributions, including Donor Advised Funds and Qualified Charitable Distributions
  • State and local tax payments, including real estate, personal property, and sales taxes
  • Contributions to tax-advantaged accounts, including IRAs, 529s, and HSAs
  • Tax basis for equity compensation transactions
For information not reported to the IRS – such as business income and expenses, charitable contributions, and medical expenses – it’s important to keep accurate and contemporaneous records. You’ll also want to keep any supporting documentation, such as receipts and transactions histories, as the IRS may ask you to support the number reported on the return. However, you should provide the total number for each income and expense category to your preparer first and offer to provide supporting documentation if needed. For example, if you donate food to the local food pantry every week, you should keep physical or digital receipts of purchase and donation, but your preparer may be content with a summary of the donations and ask you to hold on to the receipts. You should also track estimated tax payments. You might think that the IRS and states would be able to track payments accurately, but that is often not the case. Even if labeled properly, sometimes taxing authorities do not credit tax payments to the correct tax year, and matching errors occur. Keep a record of the payments, with payment confirmations and cancelled checks, and provide those to the preparer.

What If I Need to File an Extension?

For many taxpayers, not all the information is available to file a return by the April 15 deadline (March 15 for corporate and partnership filers). K-1s are a common reason for extending, as returns for entities issuing K-1s generally require additional time given the complexity of the return. Sometimes life events make it impractical or too stressful to collect all the documents on time. It’s okay to extend if you need to do so. There is no penalty or downside to filing an extension. Once extended, the filing deadline for individual returns is October 15 (September 15 for corporate and partnership filers, September 30 for trusts and estates). Please note that an extension is an extension of time to file the return, not to pay the tax due. The IRS still requires 100% of the total tax liability be paid or withheld by the April 15 deadline. This is an important distinction. Your preparer should be able to assist you in filing an extension and making the requisite payments. Many preparers have a due date (usually mid-March) for you to provide documents in order to file the return before the April 15 deadline. If you think you may be unable to provide all your information by that date, talk to your preparer to determine whether an extension is appropriate.

Provide All the Documentation as Early as Possible

Most tax documents are issued in January. Brokerage account 1099s are typically available by mid-February. The quicker you can provide all the documents to your preparer, the earlier your return can be prepared. Avoid sending documents one-by-one – sending all the documents at once to your preparer will allow them to start working on the return sooner. If you have all but one or two documents, ask your preparer for their preference as to when you should send in your tax documents. Tax season is rarely fun, but a great working relationship with your tax preparer can reduce the stress caused by April 15. For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Cetera Advisor Networks LLC nor any of its representatives may give legal or tax advice. [post_title] => What Documents You Should Provide to Your Tax Preparer [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => what-documents-you-should-provide-to-your-tax-preparer [to_ping] => [pinged] => [post_modified] => 2023-02-07 08:15:52 [post_modified_gmt] => 2023-02-07 14:15:52 [post_content_filtered] => [post_parent] => 0 [guid] => https://carsonhub.wpengine.com/?p=65628 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [3] => WP_Post Object ( [ID] => 52562 [post_author] => 99865 [post_date] => 2023-01-05 17:05:19 [post_date_gmt] => 2023-01-05 23:05:19 [post_content] => There’s more to tax planning than you think. Do you understand how each of your accounts are taxed? How did you set up your retirement plan? Have you considered an HSA? Take control of your taxes and how they fit into the big picture. Check out these income tax planning tips. Click here to open fullscreen [post_title] => 10 Tax Planning Tips That Could Reduce Your Taxes [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => 10-tax-planning-tips-your-cpa-might-have-missed-2 [to_ping] => [pinged] => [post_modified] => 2023-02-02 11:06:51 [post_modified_gmt] => 2023-02-02 17:06:51 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.carsonwealth.com/?post_type=infographics&p=52562 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [4] => WP_Post Object ( [ID] => 77408 [post_author] => 182385 [post_date] => 2023-01-05 13:15:41 [post_date_gmt] => 2023-01-05 19:15:41 [post_content] => Mike Valenti, CPA, CFP®, Director of Tax Planning Qualified retirement plans – such as 401(k)s, 403(b)s and IRAs – offer clear tax advantages. Traditional 401(k)s, 403(b)s, and IRAs offer a tax deferral on contributions and growth until distribution. Their Roth counterparts can provide an inverse benefit: Contributions are taxed up front, but growth and qualified distributions are tax-free. To prevent individuals from taking advantage of the tax-deferred growth in perpetuity, there are certain rules in place. One of those is the Required Minimum Distribution (RMD) rule. Taxpayers with qualified retirement accounts are required to start taking distributions from the accounts once a certain age is reached. That age was 70½ prior to 2020, 72 from 2020 to 2022, and will be 73 starting in 2023 with the passage of the SECURE 2.0 Act. The bill also includes a provision to increase the RMD age in ten years to 75. Note: those who are beneficiaries of inherited retirement accounts may also be subject to RMDs, but that topic is not covered here.

RMD Basics

The RMD rules apply to all employer-sponsored qualified retirement accounts (401(k)s, 403(b)s, etc.) and IRAs, with exception of Roth IRAs – and beginning in 2024, due to the SECURE 2.0 Act provisions, Roth 401(k)s. If someone is still working at or beyond the RMD age and their company offers a qualified retirement plan such as a 401(k), the distribution requirement for that plan specifically is deferred until the person retires or otherwise stops working for that company. If you own more than 5% of the company when you hit your required beginning age you would still need to take RMDs from that company plan. Due to the mechanics of the RMD age increase from 72 to 73 in 2023, a smaller subset of people will be required to take their first distribution in 2023. If you turned 72 in 2022, your first RMD would need to come out by April 1, 2023 and a second RMD, for 2023, would need to be distributed by December 31, 2023. Thus, the only people required to take their first RMD in 2023 will be those who continued to work past the RMD age and are retiring in 2023. The RMD amount – the minimum amount that must be withdrawn and subject to tax – is calculated using life-expectancy tables provided by the IRS. The intent is to draw down tax-advantaged retirement accounts over the life of the taxpayer. As a result, the minimum distribution amount will change every year depending on the current age factor and the prior year’s distributions and market performance. The minimum distribution is required to be taken by year-end, with one exception. In the first year an RMD is required to be taken, there is a three-month grace period and the distribution needs to be taken by April 1st of the following year to avoid penalty. The second year’s RMD is still required to be taken that year, so this does result in two distributions the second year. The RMD age should not be confused with the age 59½ threshold, which is when an individual can start taking distributions without penalty.

How to Calculate Your RMD Amount

As noted above, the minimum distribution is calculated by using a formula based on a life expectancy factor provided by the IRS, which can be referenced in IRS Publication 590-B. The factor is primarily based on age, but also the spouse’s age, if applicable. Most people will use the Uniform Life Expectancy Table, but those with spouses 10+ years younger who are the sole beneficiaries of the account are subject to the Joint Life and Last Survivor Expectancy Table, which takes into account that the younger spouse may live significantly longer and may rely on the inherited assets well past the death of the first spouse. To calculate the RMD, the balance of the applicable accounts on the last day of the prior tax year (December 31, 2022 for 2023 distributions) is divided by the life expectancy factor. While there is not a requirement to take distributions from every single account, i.e., a distribution from one IRA can suffice for all IRAs, there is a distinction between IRAs and employer-sponsored accounts. If you have IRAs and a 401(k), two pro rata distributions must be taken: one from an IRA to meet the RMD for the collective IRAs and one from the 401(k) to cover for the employer-sponsored plan(s). For a simple example, assume you are 73, single or have a spouse the same age and have $50,000 in a 401(k) and $50,000 in an IRA for a total of $100,000. Your life expectancy factor is 26.5. Divide $100,000 by 26.5 and your total RMD for the year is $3,774, and furthermore, at least $1,887 is required to be withdrawn from each account.

How to Take the RMD

To take the distribution, you must direct the account custodian to make the distribution. There will be a form to fill out, which includes how much to withdraw, when to withdraw, how and where the distribution will be paid, and how much in taxes to withhold. The default federal tax withholding is 10%, but you can request specific amounts or percentages to be withheld for federal and state taxes. Some custodians will allow you to set up automatic distributions, which can be helpful if you have multiple and/or smaller accounts to ensure the RMD is not missed. For tax reporting purposes, you will get a 1099R that lists the distributions and taxes withheld. You should always provide this form to your tax preparer. Prior to 2023, failing to take the RMD could result in a costly 50% penalty on the minimum distribution not taken. Due the SECURE 2.0 Act, the amount not withdrawn is now penalized at 25%, with a reduction to 10% if corrected in a timely manner.

Choosing an RMD Strategy for You

In the first year, although you have grace period, it generally makes sense to take the first RMD to reduce the overall tax liability. However, in certain circumstances, it could be worth considering a delay until the following year. As examples, if you are retiring this year with a sizeable severance package or you expect to have significant gains (perhaps from the sale of property), it could make sense to defer the income to the following year. You will double up on your RMDs in 2024, but you'll be paying less in taxes overall if properly planned. A very common planning strategy involving RMDs is to use them as a vehicle to withhold taxes. Once you have a good idea of what your net tax liability will be for the year – typically in November or December – you can take your distribution and withhold the necessary taxes needed for the year. The custodian will then pay federal and state tax authorities and remit the balance to you. This is generally more attractive than making estimated tax payments during the year because the tax withheld from your RMD is considered ratably paid throughout the year and can reduce the chance of an underpayment penalty due to a timing mismatch between income and estimated payments. There is no limit on the number of distributions you can pull throughout the year, other than what your custodian may impose. You can take them yearly, monthly, or even bi-weekly if you wish, to cover living expenses. Additionally, there is no maximum distribution other than the account’s balance. If, for example, your RMD is $100,000, but you need $120,000 for living expenses, you can withdraw $120,000 or more to meet your needs. Perhaps a monthly distribution of $10,000 is more attractive. On top of those distributions, you could take a year-end distribution to cover the expected tax liability.

Consult with Your Advisors

Given the complexity of the RMD calculation and process, you should always consult with your financial planner and/or tax advisor to discuss how much to withdraw, how much to withhold, and when to take to the distributions as you near age 73. Jamie is not registered with CWM, LLC as an investment advisor representative and does not provide product recommendations or investment advice. Distributions from traditional IRA’s and employer sponsored retirement plans are taxed as ordinary income and, if taken prior to reaching age 59 ½, may be subject to an additional 10% IRS tax penalty. For a comprehensive review of your personal situation, always consult with a tax or legal advisor. CWM, LLC, any other named entity or any of their representatives may not give legal or tax advice. [post_title] => Planning for Your First Required Minimum Distribution in Retirement [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => planning-for-your-first-required-minimum-distribution-in-retirement [to_ping] => [pinged] => [post_modified] => 2023-01-17 09:50:49 [post_modified_gmt] => 2023-01-17 15:50:49 [post_content_filtered] => [post_parent] => 0 [guid] => https://carsonhub.wpengine.com/?p=65589 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) ) [post_count] => 5 [current_post] => -1 [before_loop] => 1 [in_the_loop] => [post] => WP_Post Object ( [ID] => 17967 [post_author] => 4345 [post_date] => 2023-02-02 09:22:13 [post_date_gmt] => 2023-02-02 15:22:13 [post_content] => By Kevin Oleszewski CFP®, MST, EA, Senior Wealth Planner Multiple retirement savings vehicles are available but having options can be overwhelming. Each option comes with different rules leading to a variance of outcomes in the short-term and long-term. It’s not that dissimilar to choosing what to eat. There are options which are satisfying in the short-term but may necessitate a more vigorous workout later to compensate. Other menu options might be less satisfying immediately but reduce the need to work out as intensely. Similar to how different foods affect the way the body is fueled, retirement contribution choices affect the fuel for retirement. How you save is just as important as how much you save.

Traditional IRA vs. Roth IRA

One example of two similar, yet very different, retirement saving vehicles are Traditional IRAs and Roth IRAs. Both are Individual Retirement Accounts meaning the account is opened and funded by the worker and are tax-advantaged accounts designed for retirement savings. Certain other types of retirement accounts are sponsored by employers and can be funded with both worker and employer contributions. Traditional and Roth IRAs can be distinguished by their tax treatment. So how do they differ and how does each fuel retirement?

Traditional IRA

The Traditional IRA is what usually comes to mind when hearing about an IRA. Often, it’s called a simple IRA, whereas a Roth IRA goes by its full name or Roth for short. The features commonly associated with an IRA include tax-deductible contributions and tax-deferred growth. Because Traditional IRA contributions are made during income-earning years for a time when earned income ends or is reduced (and tax liabilities are frequently lower), the IRA can be a nice way to reduce the current income tax liability while also targeting retirement saving goals. Traditional IRAs provide tax benefits at the point of contribution for those within the income limits for qualification of a tax deduction. Whether an employer-sponsored retirement plan is offered affects the income limits for contribution deductibility. In 2023, for example, the Modified Adjusted Gross Income (MAGI) limits are as follows:
Single / Head of Household Married Filing Jointly Married Filing Separately
No Employer Retirement Plan No Limit Phase Out $218,000 - $228,000   No Limit if spouse is not covered by a plan Phase Out $1 - $10,000   No Limit if spouse is not covered by a plan
Employer Retirement Plan Phase Out $73,000 - $83,000 Phase Out $116,000 - $136,000 Phase Out $1 - $10,000
If MAGI exceeds the limits to qualify for an income tax deduction, contributions to a Traditional IRA can still occur. The nondeductible IRA contributions will not provide in an income tax deduction, but the account will still benefit from tax-deferred growth. The trade-off for tax-deductible contributions is taxable distributions. IRA distributions can occur at any time but may be subject to an additional 10% penalty if the account owner is under age 59½. Distributions of pre-tax contributions and the earnings are includible in taxable income.  Alternatively, nondeductible contributions increase basis in the account and distribution of the basis is not taxable. The earnings, however, on non-deductible contributions are taxable.  Leaving the assets inside the account to avoid taxable distributions cannot continue indefinitely.  At age 73, a minimum amount must be distributed from Traditional IRAs. These distributions are known as required minimum distributions (RMDs), and the penalty for failure to take the distribution is 50% of the short-fall.

Roth IRA

Like the Traditional IRA, the Roth IRA (Roth) benefits from tax-deferred growth. Unlike the Traditional IRA, Roth account contributions are not tax-deductible. Roth accounts, however, have two attractive features the IRA does not offer: tax-free distributions and no required minimum distribution necessity. Because minimum distributions are not required, Roth accounts can benefit from tax-deferred growth until the account owner chooses to take a distribution. Roth assets can be used to manage taxable income during retirement by providing a tax-free stream of income and funds not withdrawn before death maintain their tax character for the account beneficiary. Only qualified Roth distributions are tax-free and penalty-free so it’s a good idea to know the requirements for a distribution to be qualified:
  • Over age 59½ AND at least 5 years has passed since the Roth was first opened and funded
  • Death or disability
  • Qualified first-time home purchase
Non-qualified distributions are subject to a 10% penalty unless an exception applies:
  • Distributions part of a series of substantially equal payments (greater of 5 years or age 59½)
  • Unreimbursed medical expenses exceeding 10% AGI
  • Medical insurance premiums after a job loss
  • Distributions not more than qualified higher education expenses (self or eligible family)
  • Distributions due to an IRS levy
  • Qualified reservist distribution
  • Qualified disaster recovery assistance distribution
Not everyone is eligible to contribute directly to a Roth IRA. Income limits, based on MAGI, exist as follows:
Single / Head of Household Married Filing Jointly Married Filing Separately
  Phase Out $138,000 - $153,000   Phase Out $218,000 - $228,000 Phase Out $1 - $10,000
Individuals not eligible to save directly into a Roth IRA could consider a backdoor Roth IRA contribution. The backdoor Roth contribution is a 2-step process beginning with a non-deductible contribution to a Traditional IRA.  Then the contribution is immediately converted to a Roth. Individuals with existing Traditional IRA balances, especially if the result of tax-deductible contributions, should work closely with their CPA because the conversion could be a taxable event. For those eligible to make tax-deductible IRA contributions and full Roth IRA contributions, it can be tough to decide which account to contribute or the best combination among the two. The maximum contribution amount to Traditional and Roth IRAs in 2023 is $6,500, and those age 50 and over may also make a catch-up contribution of an additional $1,000. That $6,500 contribution can be made entirely to a Traditional IRA, entirely to a Roth IRA, or some combination of the two as long as the contribution amount in total does not exceed the limit and catch-up amount, if applicable. Just as dietary choices have short-term and long-term implications, Traditional and Roth IRA contributions have variances in their short-term and long-term impact. Choosing which IRA works for you is best done with careful consideration, and it all starts with making the decision to build wealth for the future. For more free information from a financial professional, download a free guide for additional insights on everything from investment advice and financial advisors to tax rates and the Internal Revenue Service.
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Should I Open a Traditional or Roth IRA?

Multiple retirement savings vehicles are available but having options can be overwhelming. Each option comes with different rules leading to a variance of outcomes in the short-term and long-term. It’s not that dissimilar to choosing what to eat.
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The following topics are important to keep in mind as you navigate the various individual and employer-sponsored plans that may be available to you.

Download the checklist today to get started.   [post_title] => 7 Important Retirement Savings Topics for 2023 [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => 7-important-retirement-savings-topics-for-2023 [to_ping] => [pinged] => [post_modified] => 2023-02-10 12:12:56 [post_modified_gmt] => 2023-02-10 18:12:56 [post_content_filtered] => [post_parent] => 0 [guid] => https://pages.carsonhub.wpengine.com/_resource?guidekey=the-complete-guide-to-the-SECURE-2-0-Act [menu_order] => 0 [post_type] => free-guides [post_mime_type] => [comment_count] => 0 [filter] => raw ) [1] => WP_Post Object ( [ID] => 52484 [post_author] => 181142 [post_date] => 2023-01-05 09:52:37 [post_date_gmt] => 2023-01-05 15:52:37 [post_content] => Tax planning takes into account the larger picture of your investments, assets, estate strategy and other parts of life to protect your finances over decades – not just hope to do better than last year’s income tax return. From your personal healthcare and retirement plans to working within changes to the tax code, you'll find tax planning opportunities that are easy to miss, but could save you thousands. Download Guide   [post_title] => 10 Tax Planning Tips That Could Reduce Your Taxes [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => ten-tax-tips [to_ping] => [pinged] => [post_modified] => 2023-02-04 02:45:56 [post_modified_gmt] => 2023-02-04 08:45:56 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.carsonwealth.com/?post_type=free-guides&p=52484 [menu_order] => 0 [post_type] => free-guides [post_mime_type] => [comment_count] => 0 [filter] => raw ) [2] => WP_Post Object ( [ID] => 77399 [post_author] => 90034 [post_date] => 2022-12-28 10:38:11 [post_date_gmt] => 2022-12-28 16:38:11 [post_content] => After multiple attempts at retirement legislation in 2022, the SECURE 2.0 Act has passed, with arguably more impactful reform than its predecessor, the SECURE Act of 2019. Download the checklist today to get started.   [post_title] => The Complete Guide to the SECURE 2.0 Act [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => the-complete-guide-to-the-secure-2-0-act [to_ping] => [pinged] => [post_modified] => 2022-12-28 11:18:24 [post_modified_gmt] => 2022-12-28 17:18:24 [post_content_filtered] => [post_parent] => 0 [guid] => https://pages.carsonhub.wpengine.com/_resource?guidekey=2023-calendar [menu_order] => 0 [post_type] => free-guides [post_mime_type] => [comment_count] => 0 [filter] => raw ) [3] => WP_Post Object ( [ID] => 77345 [post_author] => 90034 [post_date] => 2022-12-09 08:59:28 [post_date_gmt] => 2022-12-09 14:59:28 [post_content] => Get ready to tackle 2023 with this month-by-month financial task list. We've also included important dates so you won't miss key deadlines. Download the checklist today to get started.   [post_title] => 2023 Calendar: Key Tasks & Financial Dates [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => 2023-calendar-key-tasks-financial-dates [to_ping] => [pinged] => [post_modified] => 2022-12-09 09:05:21 [post_modified_gmt] => 2022-12-09 15:05:21 [post_content_filtered] => [post_parent] => 0 [guid] => https://pages.carsonhub.wpengine.com/_resource?guidekey=investing-for-women [menu_order] => 0 [post_type] => free-guides [post_mime_type] => [comment_count] => 0 [filter] => raw ) [4] => WP_Post Object ( [ID] => 77275 [post_author] => 90034 [post_date] => 2022-11-18 08:49:35 [post_date_gmt] => 2022-11-18 14:49:35 [post_content] => Change happens. And whether we carefully plan for these changes, or we are taken by surprise by change, it's how we react to those changes that help dictate if they will ultimately be to our advantage. Whether it's a sudden inheritance, or a divorce settlement that is higher than anticipated, deciding what to do with an unexpected sum of money should happen after emotions have been processed. Download the checklist today to get started.   [post_title] => Investing for Women [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => investing-for-women [to_ping] => [pinged] => [post_modified] => 2022-11-18 09:05:20 [post_modified_gmt] => 2022-11-18 15:05:20 [post_content_filtered] => [post_parent] => 0 [guid] => https://pages.carsonhub.wpengine.com/_resource?guidekey=easy-steps-for-beginning-women-investors [menu_order] => 0 [post_type] => free-guides [post_mime_type] => [comment_count] => 0 [filter] => raw ) ) [post_count] => 5 [current_post] => -1 [before_loop] => 1 [in_the_loop] => [post] => WP_Post Object ( [ID] => 77523 [post_author] => 90034 [post_date] => 2023-02-02 13:10:52 [post_date_gmt] => 2023-02-02 19:10:52 [post_content] =>

The following topics are important to keep in mind as you navigate the various individual and employer-sponsored plans that may be available to you.

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Resources

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                    [post_date] => 2023-02-13 09:19:44
                    [post_date_gmt] => 2023-02-13 15:19:44
                    [post_content] => It has been a great start to 2023 for stocks. We continue to expect higher prices this year, but we don’t anticipate they’ll happen in a straight line. February is sometimes known as a hangover month, and we wouldn’t be too surprised if stocks had a small break during this historically troublesome period.
  • Stocks still look very strong, but February can be a tricky month.
  • Technology company layoffs have dominated headlines, prompting renewed recession fears.
  • Tech firms may simply be retrenching after a torrid pace of hiring over the past decade.
  • The good news is the rest of the economy may be picking up the slack.
In fact, September and February are the only months that have averaged negative returns since 1950. More recently, over the past 20 years, stocks have fallen in February. Now here’s the catch — most of the weakness in February occurs later in the month. So, starting this week and going into March, be aware stocks historically have taken a well-deserved break, and this could happen again in 2023. However, any potential pullbacks could offer opportunities for investors. Putting the Tech Layoffs in Perspective It’s hard to get away from all the headlines about layoffs in the technology sector. Most recently, Yahoo announced it was laying off 20% of its workforce, about 1,600 people. The firm Challenger, Gray & Christmas, Inc. tracks layoff announcements, and its most recent report was titled “Jan ’23 Recession or Correction?”. The firm reported that the tech sector announced cuts of 41,829 in January, which amounted to 41% of all announced layoffs. That was the second highest for the sector on record and represented a massive 158% increase over the 16,193 announced in December. Contrast that to January 2022, when there were just 72 announced layoffs in the sector. Between November 2021 and January 2022, tech sector layoff announcements have totaled 110,793. Tech Went on a Hiring Spree Over the Last Decade We reviewed employment in 25 top technology firms that represent about 25% of the S&P 500 index. Total employment at these firms grew at a torrid 10% annual pace between 2015 and 2019. That pace surged after the pandemic hit. By the end of 2022, employment at these firms was 9% above the already-hot pre-pandemic trend! That translates to about 345,000 more jobs than would have been expected if hiring remained on trend. Here’s a look at the top four: Apple, Microsoft, Alphabet, and Meta. Perhaps it shouldn’t be surprising that these companies are now retrenching. A Sharp Contrast to the Rest of the Economy The rapid growth rate of employment across the 25 tech firms we reviewed contrasted with the annual job creation pace of 1.6% across the entire economy (which is not terribly shabby) during that period. Then the pandemic hit, and the economy saw massive job losses even as tech companies boosted hiring even more. It’s important to note the last two years were amongst the best on record with respect to economy-wide job creation, with 7.3 million net jobs created in 2021 and 4.8 million in 2022. Yet, employment remains 3% below the pre-pandemic trend. That translates to 4.5 million fewer jobs than would have been expected if the pandemic hadn’t hit. Layoffs are Common, Even When Hiring is Strong The tech sector looms so large in our minds, which is why tech layoff announcements make headlines and prompt renewed recession fears. However, layoffs number more than a million each month across the entire economy. Just in December, the Bureau of Labor Statistics reported 1.47 million layoffs. Across 2022, employers laid off about 17 million workers! At the same time, the BLS estimated net employment rose by 4.8 million in 2022, the second-best year on record for job creation since 1940. So, keep in mind that when companies announce layoffs, they’re not indicating whether these are “net,” as in whether these layoffs are net of other hiring or whether they’ve frozen hiring altogether. The good news is the employment market looks really strong even as the tech sector reverses its recent hiring spree.   This newsletter was written and produced by CWM, LLC. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The views stated in this letter are not necessarily the opinion of any other named entity and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. S&P 500 – A capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The NASDAQ 100 Index is a stock index of the 100 largest companies by market capitalization traded on NASDAQ Stock Market. The NASDAQ 100 Index includes publicly-traded companies from most sectors in the global economy, the major exception being financial services. A diversified portfolio does not assure a profit or protect against loss in a declining market. Compliance Case # 01656477 [post_title] => Market Commentary: A February Hangover [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => market-commentary-a-february-hangover [to_ping] => [pinged] => [post_modified] => 2023-02-13 17:34:07 [post_modified_gmt] => 2023-02-13 23:34:07 [post_content_filtered] => [post_parent] => 0 [guid] => https://carsonhub.wpengine.com/?post_type=market-commentary&p=65707 [menu_order] => 0 [post_type] => market-commentary [post_mime_type] => [comment_count] => 0 [filter] => raw ) [1] => WP_Post Object ( [ID] => 77530 [post_author] => 90034 [post_date] => 2023-02-06 10:37:47 [post_date_gmt] => 2023-02-06 16:37:47 [post_content] => As poor as last year was for investors, 2023 has fortunately been a near mirror image. Stocks and bonds have both made solid gains to kick off the new year. The economy is in better shape than most expected, and overall inflation is also coming down, making a very nice combo.
  • Stocks have had a huge start to 2023, but a better economy could open the door to continued gains.
  • The January employment data show no sign of slowdown.
  • The economy does not appear close to a recession.
  • Wage growth is trending lower, which should be good news for the Fed as it downshifts the pace of rate hikes and closes in on a peak rate.
  • A relatively stronger than expected economy means the Fed is likely to keep rates higher for longer.
Stocks bottomed in mid-October and have gained as much as 17% off those lows. What could be next? After previous bear market lows, stocks had gained nearly 40% a year later and 60% two years later. Yes, the returns off the October lows have been impressive, but more gains are likely if history is a guide. The stock market’s strength is also a good indicator of economic growth, since stocks lead the economy. In other words, strength in stocks could be the market’s way of sniffing out better economic data. That means we could see a surprisingly strong second half of 2023. The Labor Market is Defying Recession Forecasts Let’s keep it simple: The economy created 517,000 jobs in January, well above expectations for a slowdown to 175,000. The unemployment rate is 3.4%, the lowest level since May 1969. It’s like the labor market, i.e., America’s employers, are on a mission to upend forecasts of a recession in 2023. Also, revisions suggest payroll growth was stronger than we thought in 2022. The Bureau of Labor Statistics now says the economy created 4.8 million jobs in 2022, as opposed to the previous estimate of 4.5 million. Forget recessions and landings; these numbers suggest an employment boom! Strong Numbers Under the Hood The data corroborate what we’ve been seeing in leading employment indicators, such as weekly initial claims for unemployment, which fell to the lowest level in nine months last week. January data typically tend to be quite noisy, due to seasonal effects. But even accounting for that, let’s not miss the big picture, which is that the labor market is very resilient, if not outright on fire. The huge payroll gain in January was not due to outsized gains in one sector either. Cyclical sectors, such as manufacturing, construction, and wholesale/retail trade services, all added a total of 85,000 jobs. That contradicts the narrative of a significant slowdown in these areas. Meanwhile, the service industry is growing rapidly. Americans are spending, and employers are responding, including by adding 113,000 net jobs across accommodation, restaurants, and bars. Information processing, which includes technology and utilities, were the only sectors that saw job losses, and not many. What Does This Mean for Monetary Policy? The Federal Reserve raised rates by 0.25% last week, taking the federal funds rate to the 4.50-4.75% range. This is the slowest pace of increases since last March and a welcome downshift after the aggressive pace last year. Fed officials also said ongoing interest rate increases will be appropriate to return inflation to their 2% target over time, suggesting they’re not done with rate increases yet. But the extent of future increases will take the totality of rate hikes so far plus incoming data, which indicates they are close to peak rate, perhaps around 5%. Mainly, the Fed is waiting to see disinflation in the “core services inflation, ex housing” category. This is closely tied to wage growth, and there’s good news on that front. Wage growth is decelerating. The employment cost index, which is perhaps the most stable measure of wage growth, showed a sharp deceleration in the fourth quarter, corroborating other measures. The best news is that wage growth is slowing even as the unemployment rate is at 50+ year lows. This is not what textbook theory or forecasters would predict. But we’ll take reality over that. And Fed Chair Jerome Powell’s comments after the Federal Open Market Committee (FOMC) meeting suggest the Fed might be inclined to do the same. In other words, they don’t need to be convinced that inflation is coming down and will remain low only if the unemployment rate surges. They just need to see the data, i.e., continued deceleration in wage growth, and disinflation in core services ex housing. Of course, stronger economic growth means the Fed is likely to keep interest rates higher for longer, which is contrary to market expectations of rate cuts in the second half of 2023. But we believe the economy is strong enough to handle higher rates currently.   This newsletter was written and produced by CWM, LLC. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The views stated in this letter are not necessarily the opinion of any other named entity and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. S&P 500 – A capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The NASDAQ 100 Index is a stock index of the 100 largest companies by market capitalization traded on NASDAQ Stock Market. The NASDAQ 100 Index includes publicly-traded companies from most sectors in the global economy, the major exception being financial services. A diversified portfolio does not assure a profit or protect against loss in a declining market. Compliance Case # 01649284 [post_title] => Market Commentary: More Positive Signs [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => market-commentary-more-positive-signs [to_ping] => [pinged] => [post_modified] => 2023-02-07 09:26:20 [post_modified_gmt] => 2023-02-07 15:26:20 [post_content_filtered] => [post_parent] => 0 [guid] => https://carsonhub.wpengine.com/?post_type=market-commentary&p=65680 [menu_order] => 0 [post_type] => market-commentary [post_mime_type] => [comment_count] => 0 [filter] => raw ) [2] => WP_Post Object ( [ID] => 77483 [post_author] => 90034 [post_date] => 2023-01-30 11:11:29 [post_date_gmt] => 2023-01-30 17:11:29 [post_content] => Last week the stock market rally continued, with various sectors showing renewed strength. This time a year ago, defensive areas, such as utilities, consumer staples, and health care, were leading. That was a warning sign, and it sure turned out something was wrong. Today small-caps, cyclicals, industrials, and technology are leading. These are more risk-on areas and their strong performance is another sign of underlying health.
  • The stock market’s great start to the year continued last week, which could be a good sign as strong starts can open the door to more gains.
  • Better overall economic data last week continued to increase the chances of avoiding a recession in 2023.
  • The consumer remains in solid shape and will help offset weakness in the housing sector.
  • Price pressures continue to ease, and the inflation outlook remains good.
With only two days to go, the stock market is off to one of its best January starts, with the S&P 500 up close to 6%. This is a great sign for the bulls, as the so-called January Barometer is typically a good indicator for the year. When stocks are green in January, the next 11 months are up close to 12% on average, and the market is higher 86% of the time. When January is down, such as it was in 2022, those averages drop to 2.1% and 60%, respectively. When January is up more than 5%, the returns get even better. The following 11 months are up more than 14% on average, and the market is higher nearly 86% of the time. We wouldn’t suggest blindly investing based on January’s performance, but the returns provide another clue that conditions have changed and higher stock prices in 2023 could be quite likely. More Strong Economic Data The latest GDP growth numbers for the fourth quarter of 2022 came in at 2.9% quarter-over-quarter (annualized rate), which was higher than expectations for a 2.6% reading. This is only slightly below the third quarter growth rate of 3.2%. The first two quarters of last year saw negative growth, so this is a nice bounce back. Over the full year, GDP growth was up just 1% compared to the end of 2021. But this hides the fact that economic growth picked up in the second half of 2022. However, the first-half slowdown leaves the economy about 2.5% below its pre-pandemic trend. The big picture: The economy is more than 5% higher than it was at the end of 2019, which shows how strong the recovery has been despite the early slowdown in 2022. The employment data corroborate this as well. Details Matter GDP is measured as: GDP = Consumption (68%) + Investment (18%) + Government Spending (17%) + Net Exports (-3%) Note that net exports are exports minus imports, and since the U.S. imports more than it exports, net exports tend to be a drag. The table below shows how the various components contributed to GDP growth in the third and fourth quarters. Consumption contributed close to the same amount in both quarters. But in the third quarter the other big driver of GDP growth was net exports, whereas in the fourth quarter it was “change in private inventories.” These are the two most volatile elements of GDP, which is why it helps to look under the hood. The details also help us to consider how the markets and economy will behave in 2023. For that let’s start with the most important category — consumption, which makes up just under 70% of the economy. Consumption Stays Solid, Even as Services Normalize Consumption barely slowed from the third quarter, but there were important differences. Services consumption eased, rising 2.6% in the fourth quarter compared to 3.7% in the third. But that 2.6% pace is well above the 2015-2019 average of 1.9%. The good news is goods spending picked up in the fourth quarter and offset some of the services slowdown. This was almost entirely due to increased auto sales, gas, and grocery purchases — the latter two thanks to lower prices. This is important because we believe this trend will continue into early 2023, especially with auto sales and production picking up. Further good news: Consumers have more money in their pockets due to falling inflation, which will be a tailwind for consumption.   Housing Slowed, Thanks to the Fed The Fed’s aggressive rate hikes had barely any impact on consumption last year. They did have an impact on investment, specifically residential investment, i.e., housing. Higher interest rates led to higher mortgage rates, and that led to a crash in housing activity. Housing pulled economic growth down by about 1.3-1.4 percentage points in the third and fourth quarters. Across 2022, residential investment fell 11%, which is the largest drop since 2009 when it fell 22%. The good news is housing data appear less bad. In fact, mortgage activity has even picked up recently with rates pulling back from peak levels. So, there is sound reason to think housing will be less of a drag in 2023. Nonresidential investment also slowed, which is concerning because it indicates businesses are investing less. However, it turns out the pullback in the fourth quarter was due to businesses spending less on communications equipment, which may simply be a reversal of spending that occurred after the pandemic hit when employees had to shift to their homes.  Government Spending No Longer a Drag Investors forget that government spending makes up about 17% of the economy, and it matters. Over the last two quarters, government spending has picked up, reversing the drag from the prior five quarters. This has helped offset some of the pullback in private investment. It also is in sharp contrast to what happened after the 2008-2009 recession, when government spending was slashed and remained a drag on GDP growth all the way through 2014. Government spending should continue to add to GDP growth in 2023. Congress passed some big spending bills over the past year and half: a $1 trillion infrastructure bill, the Inflation Reduction Act, and a $1.7 trillion government budget, which increased spending significantly. The money will really start to flow into the economy in 2023.   Still No Sign of a Recession As we wrote in our recently released 2023 outlook, we don’t expect a recession in 2023, and the latest data corroborate that story. Our reasoning is simple: Inflation is slowing, and if employment and incomes hold up (as they seem to be doing), real incomes will rise. Considering goods consumption is likely to recover on the back of vehicle purchases, we’re expecting consumption to remain solid. Beyond that, housing should be less of a drag in 2023, especially as the Fed eases rate hikes, which looks likely to happen. So, the peak negative impact of aggressive rate hikes may be behind us. Non-residential investment, especially in structures and equipment, may remain weak. However, recovering auto production, and even aircraft orders, should help U.S. manufacturing. That will be enhanced as the global economy starts to strengthen later in 2023, which should also help exports. GDP growth data may be volatile due to unpredictable inventories and net exports, as we saw in 2022. But the underlying message is there still is no sign of a recession.   This newsletter was written and produced by CWM, LLC. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The views stated in this letter are not necessarily the opinion of any other named entity and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. S&P 500 – A capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The NASDAQ 100 Index is a stock index of the 100 largest companies by market capitalization traded on NASDAQ Stock Market. The NASDAQ 100 Index includes publicly-traded companies from most sectors in the global economy, the major exception being financial services. A diversified portfolio does not assure a profit or protect against loss in a declining market. Compliance Case # 01640562 [post_title] => Market Commentary: As Goes January, So Goes the Year [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => market-commentary-as-goes-january-so-goes-the-year [to_ping] => [pinged] => [post_modified] => 2023-01-31 11:44:54 [post_modified_gmt] => 2023-01-31 17:44:54 [post_content_filtered] => [post_parent] => 0 [guid] => https://carsonhub.wpengine.com/?post_type=market-commentary&p=65652 [menu_order] => 0 [post_type] => market-commentary [post_mime_type] => [comment_count] => 0 [filter] => raw ) [3] => WP_Post Object ( [ID] => 77437 [post_author] => 90034 [post_date] => 2023-01-23 10:25:42 [post_date_gmt] => 2023-01-23 16:25:42 [post_content] => Stocks sold off early in the week on disappointing retail sales and industrial production numbers, but they staged a nice bounce on Friday to close out the week. Although some recent data has been disappointing, inflation data continues to show fast improvement, with producer-level inflation coming in lower than expected last week. Additionally, prices-paid components of regional surveys and supply chain data continues to quickly improve. All this matters, as lower inflation opens the door for the Fed to end its aggressive rate-hiking regime (more on this below).
  • Large bounces off midterm-election-year lows are normal, and we expect this to happen again in 2023.
  • The goods sector, both in consumption and production, may be pulling back as the economy continues to normalize.
  • Price pressures continue to ease, and the inflation outlook is good.
  • Rental prices are decelerating, and the supply picture indicates this trend will likely continue into 2023.
Investors should also take comfort in how strong stocks tend to be one year off a midterm-election-year low. As the chart below shows, midterm years tend to see the largest market corrections, down more than 17% on average. Considering stocks fell more than 25% last year, this scenario played out once again. The good news is stocks tend to see a huge bounce one year off the lows, up 32.3% on average and higher a year later every time. Given the S&P 500 bottomed at 3577.03 on October 12, 2022, a 32.3% bounce would bring the index about 1% away from a new all-time high. As hard as it is to believe that could be possible, history indicates new highs in 2023 aren’t as crazy as they sound. Good News for Rental Inflation The Carson Investment Research Team just released its 2023 outlook, which we titled “The Edge of Normal.” The big theme for 2022 was higher-than-expected inflation, which surged to the highest level seen since 1981. This resulted in the Federal Reserve embarking on its most aggressive rate-hike cycle in 40 years, which led to an ugly 2022 for investors, with stocks and bonds falling more than 10%. However, we are optimistic about 2023, mostly because we believe this year may be disinflationary, with several factors that drove inflation higher last year reversing. Amongst the three major drivers of lower inflation in 2023:
  • Gas prices as a deflationary force over the short term;
  • A reversal of core goods (ex. food and energy) prices; and
  • Shelter inflation pulling back in the back half of the year.
The third leg, i.e., shelter inflation, is probably the most important because that will ultimately drive inflation lower and, most importantly, keep it low. That is especially true for core inflation (ex. food and energy), since shelter makes up 40% of the core CPI basket. The good news is market rents are decelerating quite rapidly. Data from Apartment List showed rents have declined for four consecutive months. Rents fell 0.8% in December, which is the largest month-over-month decline ever seen in December. On a year-over-year basis, market rents peaked at 18% at the end of December 2021. The pace was down to under 4% as of last month. Now, as we have discussed in the past, official shelter inflation data is not going to capture this deceleration for another 8-10 months (see here and here). That is because private data reviews only market rents as related to new leases. But renters do not renew their leases every month. So official data considers both existing and new leases, which means there is a lag. On top of that, official data also averages the numbers over several months to smooth them out. But there is even better news on the horizon for shelter inflation. More Rental Supply is Coming The housing data looks awful, thanks to activity cratering amid the surge in mortgage rates. However, this has mostly been concentrated in the single-family housing segment. Dynamics within the multi-family sector have been markedly different. Multi-family units under construction are well outpacing completions and are currently at their highest level since 1973. Typically, construction outpacing completions would be a sign of over-building, as in the mid-2000s amid the housing bubble. This time around, it is due to supply-chain issues and labor shortages. But these are improving. That means a lot more rental units will come onto the market, perhaps by late 2023 and early 2024. We believe that will put even more downward pressure on rental prices. Of course, all of this is going to take a while to show up in the official data, but it further strengthens our view that disinflation is coming, with the largest component of the CPI basket, i.e., shelter, driving that downtrend in late 2023 and even into 2024. Critically, the timing will also likely coincide with a period when the impact of lower goods prices begins to wear off (barring any unexpected shocks). And with shelter inflation on the decline, the Fed will be less likely to argue that disinflationary trends are “transitory.” As a result, the Fed could start to cut rates in response, although this is unlikely until the very end of 2023, if not early 2024 — unless the economy plunges into recession. But that is not our base case currently, for all the reasons we discuss in our outlook.   This newsletter was written and produced by CWM, LLC. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The views stated in this letter are not necessarily the opinion of any other named entity and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. S&P 500 – A capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The NASDAQ 100 Index is a stock index of the 100 largest companies by market capitalization traded on NASDAQ Stock Market. The NASDAQ 100 Index includes publicly-traded companies from most sectors in the global economy, the major exception being financial services. A diversified portfolio does not assure a profit or protect against loss in a declining market. Sonu Varghese and Ryan Detrick are non-registered associates of Cetera Advisor Networks. Compliance Case # 01632615 [post_title] => Market Commentary: New Market Highs are Possible in 2023 [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => market-commentary-new-market-highs-are-possible-in-2023 [to_ping] => [pinged] => [post_modified] => 2023-01-24 08:19:36 [post_modified_gmt] => 2023-01-24 14:19:36 [post_content_filtered] => [post_parent] => 0 [guid] => https://carsonhub.wpengine.com/?post_type=market-commentary&p=65619 [menu_order] => 0 [post_type] => market-commentary [post_mime_type] => [comment_count] => 0 [filter] => raw ) [4] => WP_Post Object ( [ID] => 77411 [post_author] => 90034 [post_date] => 2023-01-09 10:19:55 [post_date_gmt] => 2023-01-09 16:19:55 [post_content] => The December payroll report was yet another upside surprise. Monthly payrolls rose by 223,000, above expectations for a 200,000 gain. As Fed Chair Jerome Powell has noted, the economy needs to create about 100,000 jobs a month to keep up with population growth. That’s less than half the current pace.
  • Employment data continues to show strength, but we are also seeing better news on wages.
  • December was historically weak, which has many investors worried. But those concerns could be overblown.
  • Santa Claus came to town, which is one less worry for investors.
The good news from the report is hourly wages rose less than expected. Hourly wages were up only 0.3%, compared with a huge initial 0.6% jump the previous month. The other bit of good news is November’s initial 0.6% rise was revised down to 0.4%. This matters because the Fed needs to see signs that wage growth is slowing, which are finally appearing. Is there farther to go? Or course. But this lowered trend is quite welcome. The jobs report had a Goldilocks feel to it. Just like the fairytale, the data was not too hot nor too cold. The economy creating more than 200,000 jobs but hourly wages slowing down is a pretty good combo at this stage of the cycle. A Bad December Many market watchers have said the stock market’s poor performance in December could be a warning sign. Historically, the last month of the year is quite strong for stocks. But as with much of last year, that wasn’t the case in 2022. In the end, the S&P 500 fell 5.9%, marking one of the worst Decembers ever and the worst since 2018. So, how worried should investors be? It turns out that very poor final months of the year haven’t typically been the warning signs we might expect. December 2018 for instance was the worst December ever for stocks, and they went on to gain nearly 30% in 2019. In fact, the last four times the S&P 500 fell 4% or more in December, the following years were up three times for gains of 38%, 26%, and 29%. There are many worries out there, but a big drop in December apparently shouldn’t be one of them.   Santa Came to Town Let’s end on some good news. Santa Claus did come to town, as the seven days that encompass the well-known Santa Claus rally were indeed higher. Although many people think the Santa Claus rally takes place during the whole month of December, in reality it is the final five days of the year and first two days of the new year. These seven days sported a gain of 0.8%, the seventh consecutive year stocks were higher during this historically strong period. These seven days are higher about 80% of the time, and no period is more likely to be positive. At Carson, we take note when the rally does not occur as this typically is a warning sign, such as it was in 2000 and 2008. The markets present many worries, but the large drop in December and the Santa Claus rally should not be among them.   This newsletter was written and produced by CWM, LLC. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The views stated in this letter are not necessarily the opinion of any other named entity and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. S&P 500 – A capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The NASDAQ 100 Index is a stock index of the 100 largest companies by market capitalization traded on NASDAQ Stock Market. The NASDAQ 100 Index includes publicly-traded companies from most sectors in the global economy, the major exception being financial services. A diversified portfolio does not assure a profit or protect against loss in a declining market. Compliance Case # 01616683 [post_title] => Market Commentary: The Goldilocks Jobs Report [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => market-commentary-the-goldilocks-jobs-report [to_ping] => [pinged] => [post_modified] => 2023-01-09 10:57:48 [post_modified_gmt] => 2023-01-09 16:57:48 [post_content_filtered] => [post_parent] => 0 [guid] => https://carsonhub.wpengine.com/?post_type=market-commentary&p=65591 [menu_order] => 0 [post_type] => market-commentary [post_mime_type] => [comment_count] => 0 [filter] => raw ) ) [post_count] => 5 [current_post] => -1 [before_loop] => 1 [in_the_loop] => [post] => WP_Post Object ( [ID] => 77555 [post_author] => 90034 [post_date] => 2023-02-13 09:19:44 [post_date_gmt] => 2023-02-13 15:19:44 [post_content] => It has been a great start to 2023 for stocks. We continue to expect higher prices this year, but we don’t anticipate they’ll happen in a straight line. February is sometimes known as a hangover month, and we wouldn’t be too surprised if stocks had a small break during this historically troublesome period.
  • Stocks still look very strong, but February can be a tricky month.
  • Technology company layoffs have dominated headlines, prompting renewed recession fears.
  • Tech firms may simply be retrenching after a torrid pace of hiring over the past decade.
  • The good news is the rest of the economy may be picking up the slack.
In fact, September and February are the only months that have averaged negative returns since 1950. More recently, over the past 20 years, stocks have fallen in February. Now here’s the catch — most of the weakness in February occurs later in the month. So, starting this week and going into March, be aware stocks historically have taken a well-deserved break, and this could happen again in 2023. However, any potential pullbacks could offer opportunities for investors. Putting the Tech Layoffs in Perspective It’s hard to get away from all the headlines about layoffs in the technology sector. Most recently, Yahoo announced it was laying off 20% of its workforce, about 1,600 people. The firm Challenger, Gray & Christmas, Inc. tracks layoff announcements, and its most recent report was titled “Jan ’23 Recession or Correction?”. The firm reported that the tech sector announced cuts of 41,829 in January, which amounted to 41% of all announced layoffs. That was the second highest for the sector on record and represented a massive 158% increase over the 16,193 announced in December. Contrast that to January 2022, when there were just 72 announced layoffs in the sector. Between November 2021 and January 2022, tech sector layoff announcements have totaled 110,793. Tech Went on a Hiring Spree Over the Last Decade We reviewed employment in 25 top technology firms that represent about 25% of the S&P 500 index. Total employment at these firms grew at a torrid 10% annual pace between 2015 and 2019. That pace surged after the pandemic hit. By the end of 2022, employment at these firms was 9% above the already-hot pre-pandemic trend! That translates to about 345,000 more jobs than would have been expected if hiring remained on trend. Here’s a look at the top four: Apple, Microsoft, Alphabet, and Meta. Perhaps it shouldn’t be surprising that these companies are now retrenching. A Sharp Contrast to the Rest of the Economy The rapid growth rate of employment across the 25 tech firms we reviewed contrasted with the annual job creation pace of 1.6% across the entire economy (which is not terribly shabby) during that period. Then the pandemic hit, and the economy saw massive job losses even as tech companies boosted hiring even more. It’s important to note the last two years were amongst the best on record with respect to economy-wide job creation, with 7.3 million net jobs created in 2021 and 4.8 million in 2022. Yet, employment remains 3% below the pre-pandemic trend. That translates to 4.5 million fewer jobs than would have been expected if the pandemic hadn’t hit. Layoffs are Common, Even When Hiring is Strong The tech sector looms so large in our minds, which is why tech layoff announcements make headlines and prompt renewed recession fears. However, layoffs number more than a million each month across the entire economy. Just in December, the Bureau of Labor Statistics reported 1.47 million layoffs. Across 2022, employers laid off about 17 million workers! At the same time, the BLS estimated net employment rose by 4.8 million in 2022, the second-best year on record for job creation since 1940. So, keep in mind that when companies announce layoffs, they’re not indicating whether these are “net,” as in whether these layoffs are net of other hiring or whether they’ve frozen hiring altogether. The good news is the employment market looks really strong even as the tech sector reverses its recent hiring spree.   This newsletter was written and produced by CWM, LLC. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The views stated in this letter are not necessarily the opinion of any other named entity and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. S&P 500 – A capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The NASDAQ 100 Index is a stock index of the 100 largest companies by market capitalization traded on NASDAQ Stock Market. The NASDAQ 100 Index includes publicly-traded companies from most sectors in the global economy, the major exception being financial services. A diversified portfolio does not assure a profit or protect against loss in a declining market. 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Market Commentary

Market Commentary

Market Commentary: A February Hangover

It has been a great start to 2023 for stocks. We continue to expect higher prices this year, but we don’t anticipate they’ll happen in a straight line. February is sometimes known as a hangover month, and we wouldn’t be too surprised if stocks had a small break during this historically trou …
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                    [post_content] => Tax season is upon us! Watch our webinar: Tips from a Tax Preparer – Best Practices for the Upcoming Tax Season with Carson Group’s Director of Tax Planning Mike Valenti and Senior Wealth Planner Tom Fridrich, now available on-demand.
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                    [post_content] => After a year riddled with market volatility, it’s a good idea to get some market outlook insights from a respected thought leader, Carson Group’s Chief Market Strategist Ryan Detrick. 

Watch Detrick’s Carson's 2023 Market Outlook webinar, now available on-demand.  
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                    [post_content] => Carson Partners’ Ryan Detrick shares key events we saw in the past quarter and how we think they’ll affect markets in 2023. Contact us to speak with a financial advisor.

[post_title] => 2023 Market Outlook [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => 2023-market-outlook [to_ping] => [pinged] => [post_modified] => 2023-01-18 07:44:20 [post_modified_gmt] => 2023-01-18 13:44:20 [post_content_filtered] => [post_parent] => 0 [guid] => https://carsonhub.wpengine.com/?post_type=videos&p=65612 [menu_order] => 0 [post_type] => videos [post_mime_type] => [comment_count] => 0 [filter] => raw ) [3] => WP_Post Object ( [ID] => 77417 [post_author] => 90034 [post_date] => 2023-01-09 13:19:16 [post_date_gmt] => 2023-01-09 19:19:16 [post_content] => The SECURE Act brought big changes to planning for retirement when it was signed into law in 2019. Now, its sequel – dubbed SECURE Act 2.0 – has just passed as part of the 2023 budget.    [post_title] => How SECURE Act 2.0 Shifts the Retirement Planning Landscape  [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => everything-you-need-to-know-about-rmds-2-2-2-2-2-3-2-2-2 [to_ping] => [pinged] => [post_modified] => 2023-01-09 14:08:09 [post_modified_gmt] => 2023-01-09 20:08:09 [post_content_filtered] => [post_parent] => 0 [guid] => https://carsonhub.wpengine.com/?post_type=videos&p=65597 [menu_order] => 0 [post_type] => videos [post_mime_type] => [comment_count] => 0 [filter] => raw ) [4] => WP_Post Object ( [ID] => 77371 [post_author] => 90034 [post_date] => 2022-12-20 07:45:23 [post_date_gmt] => 2022-12-20 13:45:23 [post_content] => Nobody knows with complete certainty what 2023 will bring for your finances, but we have some educated guesses. Learn about how 2022 events might impact your 2023 in our on-demand webinar A Look Ahead to 2023 with Carson’s Senior Wealth Planner Kevin Oleszewski CFP®, MST, EA.    [post_title] => A Look Ahead to 2023 [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => everything-you-need-to-know-about-rmds-2-2-2-2-2-3-2-2 [to_ping] => [pinged] => [post_modified] => 2022-12-20 08:25:22 [post_modified_gmt] => 2022-12-20 14:25:22 [post_content_filtered] => [post_parent] => 0 [guid] => https://carsonhub.wpengine.com/?post_type=videos&p=65555 [menu_order] => 0 [post_type] => videos [post_mime_type] => [comment_count] => 0 [filter] => raw ) ) [post_count] => 5 [current_post] => -1 [before_loop] => 1 [in_the_loop] => [post] => WP_Post Object ( [ID] => 77547 [post_author] => 90034 [post_date] => 2023-02-10 12:18:24 [post_date_gmt] => 2023-02-10 18:18:24 [post_content] => Tax season is upon us! Watch our webinar: Tips from a Tax Preparer – Best Practices for the Upcoming Tax Season with Carson Group’s Director of Tax Planning Mike Valenti and Senior Wealth Planner Tom Fridrich, now available on-demand. [post_title] => Tips from a Tax Preparer [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => everything-you-need-to-know-about-rmds-2-2-2-2-2-3-2-2-2-2-2 [to_ping] => [pinged] => [post_modified] => 2023-02-10 14:10:22 [post_modified_gmt] => 2023-02-10 20:10:22 [post_content_filtered] => [post_parent] => 0 [guid] => https://carsonhub.wpengine.com/?post_type=videos&p=65700 [menu_order] => 0 [post_type] => videos [post_mime_type] => [comment_count] => 0 [filter] => raw ) [comment_count] => 0 [current_comment] => -1 [found_posts] => 115 [max_num_pages] => 23 [max_num_comment_pages] => 0 [is_single] => [is_preview] => [is_page] => [is_archive] => [is_date] => [is_year] => [is_month] => [is_day] => [is_time] => [is_author] => [is_category] => [is_tag] => [is_tax] => [is_search] => [is_feed] => [is_comment_feed] => [is_trackback] => [is_home] => 1 [is_privacy_policy] => [is_404] => [is_embed] => [is_paged] => [is_admin] => [is_attachment] => [is_singular] => [is_robots] => [is_favicon] => [is_posts_page] => [is_post_type_archive] => [query_vars_hash:WP_Query:private] => 94497154a7cc886bc98217b3aab93ba6 [query_vars_changed:WP_Query:private] => [thumbnails_cached] => [allow_query_attachment_by_filename:protected] => [stopwords:WP_Query:private] => [compat_fields:WP_Query:private] => Array ( [0] => query_vars_hash [1] => query_vars_changed ) [compat_methods:WP_Query:private] => Array ( [0] => init_query_flags [1] => parse_tax_query ) [tribe_is_event] => [tribe_is_multi_posttype] => [tribe_is_event_category] => [tribe_is_event_venue] => [tribe_is_event_organizer] => [tribe_is_event_query] => [tribe_is_past] => )

Videos

Videos

Tips from a Tax Preparer

Tax season is upon us! Watch our webinar: Tips from a Tax Preparer – Best Practices for the Upcoming Tax Season with Carson Group’s Director of Tax Planning Mike Valenti and Senior Wealth Planner Tom Fridrich, now available on-demand.
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                    [post_content] => By Erin Wood, Senior Vice President, Financial Planning and Advanced Solutions

Just a few years ago, Rose retired with a decent-sized 401(k). With some careful budgeting and a part-time job, her retirement finances were on track. Rose was looking forward to traveling, reigniting her passion for photography and spending time with her son and her grandkids.

The pandemic changed everything. Her son contracted COVID-19 in the early days of the pandemic. His health deteriorated quickly and he died at only 35 years old. He didn’t have life insurance. A gig worker without a 401(k), he had very minimal retirement savings.

Rose’s grandchildren, ages 2 and 6, joined the more than 140,000 U.S. children under the age of 18 who lost their primary or secondary caregiver due to the pandemic from April 2020 through June 2021. That’s approximately one out of every 450 children under age 18 in the United States.

Rose’s ex-daughter-in-law battles drug addiction and had lost custody of the kids during the divorce, so Rose became the children’s primary caregiver. She quickly discovered that caring for young children as an older adult is more physically challenging than when she raised her son, so she made the difficult decision to leave her part-time job to have the energy to care for her active grandchildren. She wants to do everything for these kids who have lost so much — but it puts her financial security at risk.

Sadly, she is far from alone.

Read the full article
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                    [post_content] => Karn Couzens & Associates, Inc., a full-service financial planning and wealth management firm with offices in Farmington and Wallingford, Conn. announced today that it is joining Carson Wealth. The 10-person team is led by managing directors and wealth advisors, Robert A. Karn, JD, LLM, CFP® and Jeffrey P. Couzens, CFP® and has $800 million in assets under advisement.

“There were a lot of reasons why we chose to partner with Carson,” explains Robert Karn. “But one of the biggest reasons was the industry-leading technology available to us as Carson Wealth and what that will enable us to do for our clients. These tools will help streamline our clients’ digital experience, making it easier for them to visualize their financial plan, access their investments and communicate with our team.”

Robert Karn has been helping high-net-worth families and businesses discover and plan for their financial goals for nearly 40 years. Karn began his career in financial services when he and wealth advisor, Jim Couzens opened Karn Couzens & Associates in 1987.

Jeffrey Couzens joined Karn Couzens & Associates, Inc. in 1997, following in his father, Jim’s footsteps.

“Our goal has always been to deliver maximum value to our clients and provide them with a ‘best-in-class’ experience,” said Jeffrey Couzens. “Aligning with a trusted partner like Carson will allow us more time to foster true partnerships with our clients and help them live their best lives by developing plans to help them prioritize and achieve their financial goals.”

“Bob and Jeffrey have built a tremendous multigenerational family business, dedicated to serving the greater Hartford area,” said Ron Carson, founder and CEO of Carson Group. “As part of the Carson Wealth team, they have access to resources to secure their firm’s legacy and provide so much more for their clients – comprehensive financial planning, trust services, insurance solutions, tax strategy and a dedicated investment management team.”

“Carson’s extensive network gives us a succession plan that supports our existing team and reinforces the work we’re committed to doing for our clients,” added Karn. “We believe we are now even better positioned to look toward the future with renewed confidence.”

Karn Couzens & Associates, LLC, will be the 35th Carson Wealth branded office in the U.S.

Carson currently manages $20 billion in assets and serves more than 40,000 families through its advisory network, including 35 Carson Wealth offices. For more information, visit www.carsonwealth.com.
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                    [post_content] => By: Erin Wood, CFP®, CRPC®, FBS®, Senior Vice President, Financial Planning, Carson Group

 

Laura and Caroline are in their late 50s. Friends since meeting at a playgroup for their toddlers, both were in long-term, seemingly happy marriages. Laura married her high school sweetheart right after they graduated from college and worked as an RN while her husband attended medical school. When their first child was born, Laura decided to become a stay-at-home parent. She just celebrated sending her last child off to college and was looking forward to enjoying an empty nest with her husband.

Already established in her career as an accountant for a large insurance firm, Caroline married a bit later, at 33. Today, she’s a financial controller for the same firm. Her spouse owns his own landscaping business. Caroline is the high-wage earner in the family.

Unfortunately, both women are now surprised to be facing a “gray” divorce: a divorce involving couples in their 50s or older. Each will need to make some tough choices as they deal with the emotional devastation of unraveling a long-term marriage. Although my focus as a financial planner is to help my clients find their financial footing during and after divorce, I also encourage clients to build a strong network of family and friends as well as a therapist or clergy person to offer critical emotional support during this time.

Read full article on Kiplinger.com

[post_title] => Emerging Financially Healthy After a Gray Divorce [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => emerging-financially-healthy-after-a-gray-divorce [to_ping] => [pinged] => [post_modified] => 2022-07-06 13:22:55 [post_modified_gmt] => 2022-07-06 18:22:55 [post_content_filtered] => [post_parent] => 0 [guid] => https://carsonhub.wpengine.com/?post_type=news&p=64886 [menu_order] => 0 [post_type] => news [post_mime_type] => [comment_count] => 0 [filter] => raw ) [3] => WP_Post Object ( [ID] => 72316 [post_author] => 90034 [post_date] => 2022-02-28 12:58:37 [post_date_gmt] => 2022-02-28 18:58:37 [post_content] => Carson Wealth in Napa, California, announced that wealth advisor, Tom Commander and senior planner, Tim McNamara are joining Kent Kuhlmann’s team and adding to the firm’s expanding footprint in Northern California. The Carson Wealth team in Napa serves affluent families, business owners, executives and institutions in Napa, Sonoma, San Jose and surrounding areas. The firm currently manages more than $100 million in assets for families and businesses in 32 states. “The decision to join Carson Wealth was an easy one,” said Tom Commander, wealth advisor. “This strategic move gives me the opportunity to provide clients with the support of Carson Wealth’s full roster of highly specialized professionals offering services ranging from estate planning, investment management and financial planning.” Before joining Carson Wealth, Commander worked as an investment advisor with Jacobson Wealth Management. Commander joined the financial services profession after serving 29 years in law enforcement with the Napa Sheriff’s Office. While working for Napa County, Commander served as a member of Napa County’s Deferred Compensation Board for 12 years. As a board member and chair, he discovered he had a passion and interest in the financial services industry and decided to pursue a career as a financial professional. Commander holds a life, health and accident insurance license for the state of California. Senior planner, Tim McNamara, a 30-year financial services veteran, will also be joining Carson Wealth. McNamara previously owned and operated his own consultancy practice and specialized in advising clients on estate, tax, business succession, charitable planning and real estate development needs. “I have found that the needs of our ultra-high-net-worth investors are unique and require strategies tailored to their individual needs,” said McNamara. “Carson Wealth embraces a highly-customized approach and has invested heavily in systems that give clients the services they want. With this partnership, I now have access to industry-leading technology that will allow me to provide clients with planning solutions that are right for them.” Carson currently manages more than $20 billion in assets and serves more than 40,000 families among its advisor network of 120 partner offices, including 35 Carson Wealth locations. [post_title] => Tom Commander & Tim McNamara Join Carson Wealth’s Napa Office [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => tom-commander-tim-mcnamara-join-carson-wealths-napa-office [to_ping] => [pinged] => [post_modified] => 2022-07-06 13:23:48 [post_modified_gmt] => 2022-07-06 18:23:48 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.carsonwealth.com/?post_type=news&p=72316 [menu_order] => 0 [post_type] => news [post_mime_type] => [comment_count] => 0 [filter] => raw ) [4] => WP_Post Object ( [ID] => 71963 [post_author] => 181142 [post_date] => 2022-02-09 15:44:59 [post_date_gmt] => 2022-02-09 21:44:59 [post_content] => Salt Lake City, Utah (Feb. 9, 2022) — Signal Wealth Advisors, a full-service financial planning and investment firm based in Salt Lake City, announced today that it is rebranding to Carson Wealth. The 14-person team, led by managing partners and wealth advisors Duane Toney CPA, PFS and Thom Hall CFP®, ChFC®, currently manages $250 million in assets. Since joining Carson Partners in 2017, Signal Wealth has experienced tremendous growth and has been able to better serve its clients by having the backing of Carson’s industry-leading financial planning solutions. “Carson’s industry-leading technology has helped streamline our clients’ digital experience, made it easier for them to visualize their financial plans, access their investments and communicate with our team,” said Duane Toney. “By taking the next step to rebrand as a Carson Wealth office, we not only have an ownership interest in each other’s firms, but we are now better positioned to grow and add additional advisors to our team,” added Toney. “By aligning ourselves with the Carson brand we have the peace of mind in our firm’s legacy,’ said Thom Hall. “We now have a strong succession plan in place for our clients and know they will continue to be cared for by our team for generations to come.” "Additionally, Carson’s extensive network offers a robust succession solution that supports our existing team, anticipates client needs and reinforces the work we’re committed to doing for our clients. We believe we are now even better positioned to look toward the future with renewed confidence.” Duane Toney started the business that later became Signal Wealth in 2002. Since then, Toney has helped affluent families, business owners, entrepreneurs and executives in the Salt Lake City area focus on investment management, tax minimization and wealth protection. Thom Hall founded Thom K. Hall Financial Group in 2000 and combined forces with Signal Wealth in 2018. He has been advising clients on how to protect and manage wealth for over 25 years. “Our decision to partner with Thom & Duane came from a mutual desire to serve their clients well, expand their resources and support and help them continue to grow,” said Ron Carson, CEO and founder of Carson Group. “We are proud to add them to our team and we look forward to growing our presence in Utah.” As with other advisors who have affiliated and rebranded as Carson Wealth offices, Toney and Hall will maintain active majority ownership of the firm and will remain the strategic decision-makers for all business decisions and operations in the Salt Lake City office. Carson currently manages $20 billion in assets and serves more than 40,000 families through its advisory network, including 35 Carson Wealth offices. For more information, visit www.carsonwealth.com.   About Carson Wealth Founded in 1983, Carson Wealth is one of the fastest growing financial services firms in the country, serving clients through holistic financial planning, disciplined investment strategies and proactive, personal service. Carson Wealth is headquartered in Omaha, Nebraska, with the mission to be the most trusted for financial advice.  For more information visit, www.carsonwealth.com. Securities offered through Cetera Advisor Networks LLC, Member FINRA/SIPC. Investment advisory services offered through CWM, LLC an SEC Registered Investment Advisor. Cetera Advisor Networks is under separate ownership from any other named entity. 6955 S Union Park Center, Ste 250, Midvale, UT 84047   [post_title] => Signal Wealth Advisors Rebrands to Carson Wealth [post_excerpt] => [post_status] => publish [comment_status] => closed [ping_status] => closed [post_password] => [post_name] => signal-wealth-advisors-rebrands-to-carson-wealth [to_ping] => [pinged] => [post_modified] => 2022-06-07 15:21:22 [post_modified_gmt] => 2022-06-07 20:21:22 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.carsonwealth.com/?post_type=news&p=71963 [menu_order] => 0 [post_type] => news [post_mime_type] => [comment_count] => 0 [filter] => raw ) ) [post_count] => 5 [current_post] => -1 [before_loop] => 1 [in_the_loop] => [post] => WP_Post Object ( [ID] => 75153 [post_author] => 90034 [post_date] => 2022-05-26 08:18:44 [post_date_gmt] => 2022-05-26 13:18:44 [post_content] => By Erin Wood, Senior Vice President, Financial Planning and Advanced Solutions Just a few years ago, Rose retired with a decent-sized 401(k). With some careful budgeting and a part-time job, her retirement finances were on track. Rose was looking forward to traveling, reigniting her passion for photography and spending time with her son and her grandkids. The pandemic changed everything. Her son contracted COVID-19 in the early days of the pandemic. His health deteriorated quickly and he died at only 35 years old. He didn’t have life insurance. A gig worker without a 401(k), he had very minimal retirement savings. Rose’s grandchildren, ages 2 and 6, joined the more than 140,000 U.S. children under the age of 18 who lost their primary or secondary caregiver due to the pandemic from April 2020 through June 2021. That’s approximately one out of every 450 children under age 18 in the United States. Rose’s ex-daughter-in-law battles drug addiction and had lost custody of the kids during the divorce, so Rose became the children’s primary caregiver. She quickly discovered that caring for young children as an older adult is more physically challenging than when she raised her son, so she made the difficult decision to leave her part-time job to have the energy to care for her active grandchildren. She wants to do everything for these kids who have lost so much — but it puts her financial security at risk. Sadly, she is far from alone. 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In the News

In the News

COVID’s Financial Toll Isn’t What You Think

By Erin Wood, Senior Vice President, Financial Planning and Advanced Solutions Just a few years ago, Rose retired with a decent-sized 401(k). With some careful budgeting and a part-time job, her retirement finances were on track. Rose was looking forward to traveling, reigniting her passion …
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