As we march further into the new year, we wanted to provide a brief update on the quality services we are proud to offer. Every action we take is carefully calculated and considers an individual’s goals in support of a comprehensive financial plan.
At Fortress Wealth Planning, we pride ourselves on being much more than simply “money managers” or “investment consultants.” An individual’s financial picture is made up of many essential components, and it is through optimizing each facet of their financial well-being that we are able to add value that many pure “investment consultants” simply cannot.
Goal Planning
Income planning: Budgets in retirement tend to be at the forefront of many pre and post-retirees. We employ many techniques to ensure that our clients are able to achieve their financial goals, and maintain adequate amounts of sleep each night!
Distribution Options: Determining a well-thought-out distribution plan is vital to maximizing tax efficiencies over one’s lifetime. Taxable, tax-free, and tax-deferred accounts are all considered in this process, as there are nuances that can affect one’s tax situation.
Tax Planning
Roth Conversions: These can be extremely powerful tax strategies, but many financial advisors fail to take into consideration important factors in properly executing a Roth conversion. Current/future tax rates, filing status, legacy and estate planning goals, impact on Social Security and Medicare, as well as how to pay taxes due on the conversion are just a few items we weigh up when deciding if someone truly stands to benefit from a conversion.
Tax Loss Harvesting: Our investment team remains vigilant throughout the year, continuously monitoring market conditions and regulatory changes that may impact tax implications. This proactive approach allows us to capitalize on opportunities for tax optimization and strategically rebalance investment portfolios when necessary. Additionally, we prioritize open communication with our clients, providing regular updates and insights into the tax management process. One key aspect of our tax management service is the identification and execution of tax-loss harvesting strategies. During market fluctuations, our team seizes opportunities to sell investments that have experienced losses, offsetting capital gains and, ultimately, reducing the overall tax burden for our clients.
Charitable Tax Planning: By strategically donating to qualified charitable organizations, individuals can benefit from valuable tax deductions, reducing their overall taxable income, and fulfilling their charitable intentions. This not only lowers immediate tax liabilities but also potentially places donors in lower tax brackets, leading to additional savings. Furthermore, contributing appreciated assets, such as stocks, not only supports charitable causes but also minimizes capital gains taxes. Qualified Charitable Distributions (QCDs) allow individuals aged 70½ or older to donate up to $105,000 (2024) annually directly from their Individual Retirement Accounts (IRAs) to eligible charities. This provision provides a tax-efficient way for retirees to support charitable causes while reducing their taxable income for those who are not dependent upon retirement account(s) to support their lifestyle.
Estate Planning
Gifting: For individuals with a substantial estate intended for the benefit of future generations, effective gifting strategies become crucial. By optimizing annual gift exclusions, and lifetime gift exemptions, and employing Trust planning techniques, we can aid our clients in distributing their assets while minimizing significant estate tax liabilities.
Succession Planning: In our opinion, a successful estate plan needs to be both efficient in cost-minimization, and effective in accurately reflecting the wishes described within the estate plan. By reviewing major life changes at each client meeting, we are able to address parts of an individual’s estate plan that need to be updated to match their current wishes.
Investment Management
Portfolio Management: As mentioned previously, managing investments is just one piece of the ‘financial puzzle,’ but it is one we do not take lightly. Our low-cost, long-term investing approach has allowed us to achieve the desired investment returns which help support in realizing one’s financial goals.
Asset Location: Our investment team carefully considers the characteristics inherent in each investment before deploying funds. There are many types of investment accounts and even more categories of investments, we ensure that each is appropriately arranged according to each individual’s situation
Super Bowls and Market Indicators
In 1978, Leonard Koppett introduced the Super Bowl Indicator as a means to predict the performance of the S&P 500 based on the outcome of that years’ Super Bowl. Koppett’s indicator boasted a 90+% accuracy in predicting the how the major US stock market index would perform.
Koppett’s methodology:
- If a team from the NFC wins, markets will rise
- If a team from the AFC wins, markets will fall
As of 2022, Koppett’s Indicator saw it’s percentage of accurate predictions decline to ~73%, highlighting that correlation does not translate to causation. That being said, we are gunning for a San Francisco 49ers win😉!
Source: investopedia.com
Important Upcoming Dates:
- February 13 – January Inflation Index
- February 19 – Presidents Day (US Financial Markets Closed)
- April 1 – Required minimum distribution due if you turned 73 in 2023
- April 15 – Tax day
- Deadline to make IRA and HSA contributions for 2023 tax year
- First Quarter 2024 estimated tax payment due