Monthly Market Review & Outlook

7 Reasons You Should Retire Already

Sometimes the writing is on the wall Retirement may seem untenable with inflation soaring and gas prices skyrocketing, but for some older adults, hanging on to their job can cause more harm than good. Sure, you still have money coming in, but at what price to your...

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HOW ARE ROTH 401(K) DISTRIBUTIONS TAXED?

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport More and more 401(k) plans now offer Roth contributions. At the same time, Americans are changing jobs and receiving 401(k) distributions in record numbers. So, it’s a good time to review the tax...

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Weekly Market Commentary

Weekly Market Commentary - 9/16/2022 -Darren Leavitt, CFA There was no place for investors to hide this week except in cash. A hotter than anticipated Consumer Price Index (CPI) caught most of Wall Street off guard and propelled the S&P 500 to its largest one-day...

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QCDS AND THE ABSOLUTE NECESSITY FOR A CWA

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport Qualified Charitable Distributions (QCDs) are a common transaction these days, but all guidelines must be followed to ensure the QCD is valid. Recent court cases have exposed the absolute...

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7 Surprisingly Valuable Assets for a Happy Retirement

A long and happy retirement takes more than just money. Here are seven things happy retirees do – besides dutifully saving the money they’ll need to quit the 9-to-5 grind. Retirement planning is all about numbers. It centers around one question: Do my financial assets...

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3 IRA RULES TO KNOW BEFORE YOU WALK DOWN THE AISLE

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport According to many recent surveys, the fall months of September and October are overtaking June as the most popular time of year to tie the knot. If your wedding is approaching...

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Weekly Market Commentary

Weekly Market Commentary - 9/9/2022 -Darren Leavitt, CFA The holiday-shortened week felt like anything of the sort.  Wall Street is back from summer break, and market action kicked right into high gear.  After three straight weeks of losses that saw the S&P 500...

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THE LIMITS OF ERISA SPOUSAL PROTECTION

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport A recent federal court case from West Virginia illustrates that the spouse of a 401(k) participant usually has no right to prevent the plan from paying the participant a lump sum distribution....

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ROTH IRA DISTRIBUTION ORDERING RULES

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport This may seem like a rudimentary topic, but it is the basics that are often so confusing. A fundamental understanding of Roth IRA distributions is essential for Roth IRA owners. In a blog post...

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Weekly Market Commentary

Weekly Market Commentary - 9/2/2022 -Darren Leavitt, CFA Global financial markets continued to sell off on hawkish rhetoric from the Federal Reserve and on the realization that rates will likely be higher and in place for a longer time horizon. Cleveland Fed President...

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YOUR AGE AND YOUR ROTH IRA CONVERSION

By Sarah Brenner, JD IRA Analyst Follow Us on Twitter: @theslottreport Questions on how age affects the decision to convert to a Roth IRA are common. What age is too old to convert? There is no easy answer to this question because there is no magic age when conversion...

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‘Solo Ager’ Needs Help Handling Her Financial Affairs

With no spouse and no children, she's looking elsewhere for backup The Problem Elizabeth Spiegler, 68, a retired office manager in New York City, was thinking ahead. She wrote me wondering who could handle her financial affairs if someday she can't. Spiegler isn't...

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Weekly Market Commentary

Weekly Market Commentary - 8/26/2022 -Darren Leavitt, CFA Global financial markets were focused for most of the week on economic rhetoric from the annual Jackson Hole Economic Symposium hosted by the Kansas City Federal Reserve.  Throughout the second half of the...

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ROTH CONVERSION – OOPS!

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport An advisor called to discuss Roth IRA conversions. His new client made some decisions before speaking with him, and he was trying to untangle her self-inflicted knot. She was 69 years old, a...

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Weekly Market Commentary

Weekly Market Commentary - 8/19/2022 -Darren Leavitt, CFA US equities and bonds ended the week lower in an erratic fashion. Technically, the S&P 500 failed to surpass it's 200- day moving average, which gave reason for investors to take profits. The S&P 500...

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HOW AN ESA CAN HELP WITH BACK-TO-SCHOOL EXPENSES

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport August is winding down and September is just around the corner. That means that it is back to school time! Education can be expensive. This year, with inflation raging, that...

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Happy Retirees Have These 7 Habits in Common

A long and fulfilling retirement takes more than just money. Here are seven things happy retirees do – besides dutifully saving the money they’ll need to finally quit the 9-to-5 grind. Retirement planning is all about numbers. It centers around one question: Do my...

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A RETIREMENT ACCOUNT SCORECARD

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport Here’s a line from one of the manuals we use in our education seminars for advisors: “Missed stretch IRA RMD by an EDB, when the IRA owner dies before the RBD.” An old baseball expression says: “You...

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YEAR-OF-DEATH RMD

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport Lifetime required minimum distributions (RMDs) start in the year when an IRA owner turns 72. (Technically, the “required beginning date” for RMDs is April 1 of the year after a person turns...

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Weekly Market Commentary

Weekly Market Commentary - 8/12/2022 -Darren Leavitt, CFA Weaker than anticipated inflation data released in the second half of the week bolstered the peak inflation narrative and catalyzed the S&P 500 to the fourth week of gains. Of note, on a technical basis,...

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WHAT YOU NEED TO KNOW ABOUT THE STILL-WORKING EXCEPTION

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport Are you nearing retirement age and not looking forward to taking unwanted required minimum distributions (RMDs) from your retirement account? You may be looking for a strategy...

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10 Things No One Tells You About Early Retirement

The reality of quitting work can be far different from the fantasy. Here's what you need to know Even if you love your job, there are times when you'd rather be alphabetizing the spice shelf than riding a packed train alongside hundreds of sniffling fellow commuters....

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THE UNPLEASANT SURPRISE OF THE ACCURACY-RELATED PENALTY

By Ian Berger, JD IRA Analyst Follow Us on Twitter: @theslottreport If a retirement account transaction becomes a taxable distribution, you probably know you will owe taxes and possibly the 10% early distribution penalty (if under age 59 ½) on the distribution. But...

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Weekly Market Commentary

Weekly Market Commentary - 8/5/2022 -Darren Leavitt, CFA Despite a cautious start to the week, US equity markets posted gains for the third week. A tepid ISM manufacturing report coupled with uncertainties surrounding House Speaker Pelosi’s visit to Taiwan initially...

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Remarried With Children? 5 Estate Planning Mistakes to Avoid

Couples on their second marriages need to plan carefully for each other and their kids A second marriage can be a balm for the heartache of losing a spouse, be it through death or divorce. Nevertheless, if there are children or other heirs involved, you should...

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RMDS & ROTH CONVERSIONS: TODAY’S SLOTT REPORT MAILBAG

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport Question: My husband is the sole beneficiary of a Traditional IRA owned by his cousin, who recently  passed away. From my research, I believe my husband fits the exception criteria of "eligible...

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INHERITED IRA Q&AS

By Andy Ives, CFP®, AIF® IRA Analyst Follow Us on Twitter: @theslottreport Each week the Ed Slott team answers questions from financial advisors across the country. Sometimes we see a pattern in repeating questions, sometimes the questions are relatively basic, and...

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FOUR THINGS TO KNOW ABOUT YOUR PLAN ROLLOVER AND YOUR RMD

By Sarah Brenner, JD Director of Retirement Education Follow Us on Twitter: @theslottreport Many Americans are still working long beyond what has traditionally been retirement age. This may be a choice or a necessity. If this is your situation, you may be keeping...

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Weekly Market Commentary

Weekly Market Commentary - 7/29/2022 -Darren Leavitt, CFA Investors faced the busiest week of the year as 175 companies representing 50% of the S&P 500’s market capitalization reported 2nd quarter earnings. The results were mixed and produced drastic swings in...

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DIRECT TRANSFERS, DIRECT ROLLOVERS, AND 60-DAY ROLLOVERS

By Andy Ives, CFP®, AIF® IRA Analyst When moving retirement money from IRA to IRA, or from a workplace retirement plan like a 401(k) to an IRA, there are essentially three methods to relocate those dollars. Two of them are similar, and the third opens all kinds of...

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Weekly Market Commentary

Weekly Market Commentary - 7/22/2022 -Darren Leavitt, CFA US financial markets rallied over the week despite increasing economic growth concerns. A very weak BofA Fund Manager Survey validated a sense that some, if not most, of the coming economic weakness has been...

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The Financial Penalty of Losing Your Spouse

Prepare for the monetary shock of widowhood When you lose your mate, you lose so much—your best friend, your equilibrium, your future together. And just when you’re at your lowest, it hits you: You could lose a lot of money, too. Your finances may crash in myriad ways...

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REPAYING A CRD

By Sarah Brenner, JD Director of Retirement Education Back in 2020 when COVID first became our new reality, Congress enacted the CARES Act. The CARES Act allowed qualified individuals who were affected by COVID to take penalty-free distributions from their retirement...

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SIDESTEPPING THE NEW IRS PRIVATE LETTER RULING FEES

By Ian Berger, JD IRA Analyst Like most everything else these days, the price for receiving an IRS private letter ruling (PLR) has recently gone up. A person will request a PLR to receive the IRS’s blessing that a specific tax transaction won’t violate the tax code or...

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Weekly Market Commentary

Weekly Market Commentary - 7/15/2022 -Darren Leavitt, CFA It was an extremely busy week on Wall Street with a full calendar of economic data and the start of 2nd quarter earnings. Growth concerns fostered more selling in equities and commodities while the long tenures...

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CONDUIT IRA – IS IT REALLY NECESSARY?

By Andy Ives, CFP®, AIF® IRA Analyst Conduit IRAs, sometimes called “rollover IRAs,” typically contained only money rolled over from a company plan - and subsequent earnings on those dollars. But a 2001 tax law (Economic Growth and Tax Relief Reconciliation Act of...

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4 QCD RULES THAT MAY SURPRISE YOU

By Sarah Brenner, JD Director of Retirement Education A Qualified Charitable Distribution (QCD) is a way for you to move funds out of your IRA to a qualifying charity income-tax free. If you are thinking this might be a good strategy for you, here are 4 QCD rules that...

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Weekly Market Commentary

Weekly Market Commentary - 7/8/2022 -Darren Leavitt, CFA The holiday-shortened week saw the US stock market bounce while US Treasuries gave up the bulk of their prior weeks' gains. Economic data was highlighted by the June Employment Situation report that showed...

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SENATE COMMITTEES TAKE UP RETIREMENT SAVINGS PROPOSALS

By Ian Berger, JD IRA Analyst Proposals to boost IRA and workplace plan savings are advancing, but they are not law yet. Several actions must occur before the proposals become law. On March 29, the House passed the “Securing a Strong Retirement Act of 2022.” Now, two...

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INHERITED IRAS AND RMDS: TODAY’S SLOTT REPORT MAILBAG

By Sarah Brenner, JD Director of Retirement Education Question: Dear Sirs: I inherited a regular IRA upon my mother's death in 2015. I am now 75 years old and have been taking required distributions since then. She was taking distributions herself when she died. My...

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SHOULD I ACCEPT A LUMP SUM BUYOUT OFFER?

By Ian Berger, JD Director of Retirement Education Should I Accept a Lump Sum Buyout Offer? With economic uncertainty increasing, more companies with defined benefit (DB) pension plans will likely attempt to improve their bottom line by offering lump sum buyouts. A...

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Weekly Market Commentary

Weekly Market Commentary - 7/1/2022 -Darren Leavitt, CFA Markets took a step back after the prior week’s impressive rally. The same culprits showed up to dampen investors’ appetite for risk assets- growth concerns, inflation, and hawkish central bank rhetoric....

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June 2022 Market Review and Outlook

Monthly Commentary - June '22 -Darren Leavitt, CFA It was just an ugly month of June for investors and for that matter the 1st half of 2022.  All asset classes seemed to fall except for the US dollar.  The month started with a “peak inflation” narrative that was...

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DEATH OF A SPOUSE, DEATH OF DAD

By Andy Ives, CFP®, AIF® IRA Analyst Over the past couple of months I have been tasked with the unfortunate responsibility of helping my mother sort through her financial affairs after the death of her spouse. My dad passed in March, and it has been a steady stream of...

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TOO OLD TO CONVERT? THINK AGAIN

By Sarah Brenner Director of Retirement Education You may have heard how converting to a Roth IRA is a great move for younger people. This is no surprise. A younger person who converts has two big factors working in her favor. She may pay taxes on a smaller IRA...

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Weekly Market Commentary

Weekly Market Commentary - 6/24/2022 -Darren Leavitt, CFA In a holiday-shortened week, financial markets bounced out of extreme oversold conditions.  Mega-cap growth stocks outperformed value issues, mid-caps, and small caps.  The Fed Chairman was on the hill in front...

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A Recession Survival Guide for Retirees

Economic downturns are inevitable. Here's how to protect your retirement nest egg Sooner or later, the economy will fall into a recession, because that’s the nature of the economy: Busts follow booms. For many retirees, the biggest challenge is the investment...

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72(T) DON’TS

By Andy Ives, CFP®, AIF® IRA Analyst The 72(t) rules (”series of substantially equal periodic payments”) allow a person to tap retirement dollars before 59½ without a 10% early distribution penalty. However, to gain this early access, you must commit to a plan of...

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Weekly Market Commentary

Weekly Market Commentary - 6/17/2022 -Darren Leavitt, CFA Investors sent global markets lower on recession fears induced by tighter central bank policies. The Federal Reserve announced that they would raise their policy rate by 75 basis points to a target of 1.50% to...

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Tax Breaks After 50 You Can’t Afford to Miss

IRS tax code offers perks to taxpayers of a certain age If you’re 50 or older, there is one benefit to reaching this milestone that you may be overlooking: tax breaks aimed right at you. Now you can contribute more to your Roth or traditional individual retirement...

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WHEN THE FIVE-YEAR RULE APPLIES

By Sarah Brenner Director of Retirement Education If you inherit an IRA, especially if it is a larger one, you may be afraid of being stuck with the five-year distribution rule. If this rule applies, your IRA must be entirely emptied in five years, which can be a...

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Weekly Market Commentary

Weekly Market Commentary -6/10/2022 -Darren Leavitt, CFA Global growth concerns were raised throughout the week on multiple fronts. Central bank policy from the Eurozone, India, and Australia promoted tighter monetary policy. Higher fuel prices stoked fears of...

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Social Security Resource Center

Social Security retirement benefits are primarily based on two factors: your average income over your working life and your age when you claim them. You get to decide when to start collecting benefits, within an eight-year window from age 62 to age 70. The longer you...

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ONE ROTH IRA BUCKET

By Andy Ives, CFP®, AIF® IRA Analyst SCENARIO: John owns multiple Roth IRAs. He believes it is necessary to maintain all these accounts to keep things properly organized and to track his 5-year conversion clocks. He has contributed to Roth IRA #1 for over a decade. He...

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5 WAYS AN EXCESS IRA CONTRIBUTION CAN HAPPEN

By Sarah Brenner, JD Director of Retirement Education You can have too much of a good thing. While saving for retirement with an IRA is a good strategy, there are limits.  When a contribution is not permitted in an IRA, it is an excess contribution and needs to be...

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Weekly Market Commentary

Weekly Market Commentary -6/3/2022 -Darren Leavitt, CFA Wall Street ended lower for the week as investors heard more hawkish rhetoric from Fed officials and economic warnings from two prominent CEOs.  The holiday-shortened week produced another tranche of mixed Q1...

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3 Steps to Help You Get out of Debt

How to get control of what you owe For Gail and Tony Dean, the crisis came as they approached 50. Living in South Florida, they decided to move north, near Orlando, where they bought land and began to build their dream home. Then the debts piled up. The couple — she...

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WHEN A “REVERSE ROLLOVER” MAKES SENSE

By Ian Berger, JD IRA Analyst Usually, rollovers involving 401(k) accounts and IRAs involve moving dollars from a plan to an IRA. But sometimes it makes sense to instead do a “reverse rollover” – from an IRA to a 401(k). Let’s get some bad news out of the way:...

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Weekly Market Commentary

Weekly Market Commentary -5/27/2022 -Darren Leavitt, CFA Happy Memorial Day, and thank you to all that have served our great country. Global financial markets rallied as buy the dip investors finally showed up on Wall Street. US Markets were especially strong after...

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What Happens to Your Debts After You Die?

5 things loved ones will have to do to settle your accounts How many times have you told your loved ones that you don’t want to be a burden, and saddle them with a financial mess at the end of your life? It’s a common sentiment. Despite their good intentions, however,...

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WATCH OUT FOR THE ONCE-PER-YEAR ROLLOVER RULE

By Sarah Brenner, JD Director of Retirement Education Why is it so important to know how the once-per-year rollover rule works? Well, that is because trouble with the once-per year rule is the kind of trouble no one wants! An IRA owner who violates this rule is...

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Weekly Market Commentary

Weekly Market Commentary -5/20/2022 -Darren Leavitt, CFA US markets continued to sell off while developed international and emerging markets traded higher. Disappointing Q1 earnings results from the retailers cast some doubt on the health of the US consumer and...

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HOW THE VESTING RULES WORK FOR COMPANY RETIREMENT PLANS

By Ian Berger, JD IRA Analyst Employees leaving their jobs are often surprised to discover they aren’t entitled to the full balance of their company plan account. The reason is that some plans impose a vesting rule on certain types of contributions. What do the...

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HOW YOUR IRA CAN HELP IF YOU ARE A FIRST-TIME HOME BUYER

By Sarah Brenner, JD Director of Retirement Education The real estate market is red hot right now. This can be especially challenging for first time home buyers. IRA savings are intended to be used for your retirement. However, if you are like many others, your IRA...

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How Long Do You Have to Keep Tax Records?

For many financial documents, just 3 years — for others, practically forever You may be starting at a heap of paperwork when you finish filing your 2021 federal taxes, which are due April 18. Your first urge may be to sweep them all into a paper bag and put the bag...

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Weekly Market Commentary

Weekly Market Commentary -5/13/2022 -Darren Leavitt, CFA Investors endured another tough week as financial markets continued to digest robust inflation data, mixed Q1 earnings, and fears that global growth will continue to slow. Economic data was centered on the...

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Weekly Market Commentary

Weekly Market Commentary -5/6/2022 -Darren Leavitt, CFA It was an extremely busy and volatile week on Wall Street.  The Federal Reserve's May FOMC meeting statement was top of mind for investors and came in as expected.  However, post statement Q&A added some...

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How the Fed’s Rate Hikes Will Affect Your Finances

You'll get better savings rates but higher borrowing costs this year The Federal Reserve is raising borrowing costs to cool the hottest inflation readings in 40 years. The Fed on Wednesday hiked its key short-term fed funds rate to a range of 0.75 to 1 percent, the...

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A DOZEN QCD FACTS

By Andy Ives, CFP®, AIF® IRA Analyst Qualified charitable distributions (QCDs) continue to gain popularity, and with that popularity comes more questions. Here are a dozen QCD facts that will keep you on the straight-and-narrow with your QCD transactions: 1. QCDs are...

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INVESTING YOUR IRA IN CRYPTO

By Sarah Brenner, JD Director of Retirement Education Recently, Fidelity investments made headlines by announcing that it would allow retirement savers to put Bitcoin in their 401(k)s. Cryptocurrency has been all over the news, and you may be wondering if it would be...

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