Skip to main content

We hope you are having a great a start to the year – the markets sure have.  With all of the talk of inflation, layoffs, and an upcoming recession, seemingly every asset class is off to a great start so far as of this writing.  The worst performers last year (the tech-heavy NASDAQ, emerging market stocks) are the leaders so far.

It’s much too early to say that we’re past the headwinds mentioned above, but it’s good to recognize that markets typically bottom when the news is at its worst as they discount a better environment to come in the future.  Let’s hope that this momentum continues after this week as we have a massive amount of economic data coming including:

– 3 central bank decisions (US, Europe, England).
– Various US and European economic releases on things like GDP, employment, and inflation.
– A big slate of earnings releases from companies like Apple, Amazon, Exxon Mobil, and UPS.



Rather than debate whether or not a market bottom is in or handicap any of this weeks’ data, let’s recap something that might have gone under the radar at the end of last year.  Congress finally got some legislation passed and it’s actually pretty good!  The Setting Every Community Up for Retirement Enhancement Act (or SECURE Act 2.0) came out at the end of 2022 and will have at least a minor to moderate impact on those still saving for retirement.  It’s massive, but some of the big highlights include:

The age at which required minimum distributions (RMD’s) from IRA accounts increased from age 72 to age 73 in 2023 (this will impact those born between 1951 – 1959).   Younger people will see their RMD age increase even more as starting in 2033 the RMD age jumps to age 75.  This will create a big planning opportunity for those about to retire as they consider when to take Social Security and potentially convert a portion of their retirement accounts to Roth IRA’s.

Retirement account catch-up contributions are going up.  Starting January 1, 2025, individuals ages 60 through 63 will be able to make catch-up contributions up to $10,000 or 50% more than the regular catch-up amount (whichever is higher) to a 401(k) plan (with the exception that those making more than $145,000 will need to make those contributions in an after-tax Roth account).  Both 401(k) and IRA catch-up contribution amount limits will be indexed to inflation as well going forward.

– More opportunities to contribute to Roth accounts through work retirement plans.  Starting in 2023, employers can start to offer matching contributions to employees in Roth accounts.  Business owners using either SIMPLE or SEP IRA’s will be able to contribute to Roth’s as well.  As a reminder – Roth contributions are made after-tax and can be withdrawn in retirement tax-free.  This is great news and will add some options for those planning for how they’ll spend down assets retirement.      

An “emergency savings” option will be able to be offered to company retirement plans starting in 2024.   Employees will be able to contribute $2500 and withdraw funds for an emergency without tax or penalty.

– Unused 529 plan balances will be able to be moved to Roth IRA’s.  Big one here – one of the biggest concerns we get from families saving for college is what happens if their child doesn’t go or gets funding through other means?  Prior to this year, that meant either transferring the balance to another beneficiary for them to use or paying taxes and penalties to withdraw the unused funds.  Now, subject to certain caveats, unused 529 assets will be able to be rolled to a Roth IRA for the benefit of the child to a limit of $35,000.  Great news.

There is quite a bit more in the legislation if you want to read up on it.  We will definitely be sharing any planning opportunities when meeting with you all this year.

And finally, the waves have been huge in Encinitas over the last month and Hawaii has seen their share of massive days as well.  The Eddie Aikau Invitational surf contest was held earlier this month at Waimea Bay on the north shore of Oahu with waves pushing 50 feet.  Make sure you read about this year’s winner, Luke Shepardson.  Shepardson is a north shore lifeguard that most of us hadn’t heard of before the contest – he won it and still managed to work his shift throughout the day.  Awesome stuff.

A Beach Lifeguard Just Won the Super Bowl of Big-Wave Surfing