“The question isn’t at what age I want to retire, it’s at what income.”

- George Foreman

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REMINDER - CLIENTS AGE 72 AND ABOVE or have BENEFICIARY IRAs MAKE SURE YOU HAVE TAKEN YOUR RMDs for 2021.

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Greetings everyone,

Running out of money in retirement must have been one of George Foreman’s biggest fears. Like George, pre-retirees ponder how do they replace their income when no longer working. How much income will it take to live in retirement and will their savings and investments last?

Answering questions like these is one of the things that make our jobs as financial advisors so rewarding. Through thoughtful and detailed financial planning, we often have discussions with retirees as to the sources of income, when and how much money to take from retirement plans and the use of other assets. Always, there is the question of how much can you spend to ensure you don’t run out of money?

One of my early financial planning heroes was Loren Dutton, known as the Father of Financial Planning. In one of his books, I remember reading that there are three stages of retirement. First, it’s the “go-go years”, then the “slow-go years” and lastly the “no-go years.” In early retirement most people are active and want to do all the things on their bucket lists. By age 75 or so many people will travel less, stay closer to home and family where they may find hobbies, activities, and contentment. The unknowns are health and aging in later life, those no-go years. From a financial perspective the last years of life can be the most expensive to fund. Planning considers all stages of life and funding sources.

IRS RULES – Required Minimum Distributions

As we close 2021, I thought it might be helpful to talk about some changes that are coming in the Required Minimum Distributions (RMDs) from IRAs and other retirement plans. There are some new rules for retirement accounts. The U.S. government recognizes that Americans are living longer therefore life expectancy tables have been extended. In 2022, those changes will be reflected in the amount of money that retirees must draw from their retirement accounts at different ages. These new numbers come with IRS formulas that calculate RMDs. The amount is based on the retiree’s age and the December 31st retirement account values. You can review the IRS website site here for detailed information on the tables and rules. www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-required-minimum-distributions.

In 2019, the Secure Act changed the way beneficiaries must take the money from their inherited IRAs. If you were not a spouse and received an IRA inheritance from someone who died after December 31, 2019, you can let the money grow for ten years. You must distribute the entire account by December 31st of the tenth year after the death of the original account owner. If you were a spouse, you simply treat the inherited account as your own. The Secure Act did away with the Stretch-out IRA rules which mandated that all beneficiaries take income according to the IRS guidelines. For people who have inherited or beneficiary IRAs and were already taking distributions, they must continue taking them. The ten-year deferral rule does not apply to older Beneficiary IRAs. (Source: IRS.gov).

Birthday Rules: The Secure Act raised the age of mandatory RMDs to age 72 – up from 70 ½. If you turned 72 before July 1, 2021, you must take your RMD before December 31, 2021. If your birthday was after July 1, 2021, you have until April 1, 2022to take your first required minimum distribution.

The IRS tax rules change frequently. It is important to ask your Mercer Advisors financial planner for help if you need clarification regarding your personal situation.

What a year it has been! We’ve not only survived 2021, but many of us have thrived in a world that seemed a bit surreal. We are learning to cope, adjust and find ways to reinvent our personal and professional lives. The McGee team of Mercer Advisors is very grateful for the opportunity to serve you as your trusted advisors. We wish you all a joyful holiday season and the very best in 2022.

Judith McGee, L.H.D., CFP®, ChFC®
Executive Vice President and Senior Lead Advisor

End of Year Holiday Office Closures

Please note that our offices will be closed Dec. 24, 31 and January 3 for the holidays. If you need immediate assistance during December 31 and January 1, please contact the Client Solutions Team at 1-855-389-0550.

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In the Markets

LAST WEEK

Stocks closed last week higher for the first time in three weeks. The S&P 500 enjoyed its best weekly gain since February. Fears over the effects of the Omicron variant on economic growth seemed to subside somewhat as each of the benchmark indexes recorded notable gains. Information technology drove much of the rally, advancing 6.0% last week. Markets also seemed to react to favorable economic news. Weekly unemployment claims were the lowest since 1969, while the number of new jobs available rose to 11.0 million. Inflation rose again, but in line with expectations, reinforcing the premise that the Federal Reserve will accelerate the tapering of its bond purchases. The Dow posted the largest weekly gain, followed by the S&P 500, the Nasdaq, the Global Dow, and the Russell 2000. Treasury yields and crude oil prices advanced, while the dollar and gold prices dipped.
Investors turned more bullish last Monday following a stretch of volatility sparked by concerns over the spread of the Omicron variant. Each of the benchmark indexes listed here posted gains, led by the Russell 2000 (2.1%), followed by the Dow (1.9%), the Global Dow (1.3%), the S&P 500 (1.2%), and the Nasdaq (0.9%). Yields on 10-year Treasuries jumped 678 basis points to 1.43%. Crude oil prices climbed to $69.95 per barrel, while the dollar was mixed.
Last Tuesday, Wall Street staged the biggest rally since March on hopes that the Omicron variant won't weaken the economy. Tech stocks, which had been floundering, led the charge, pushing the Nasdaq up 3.0%, followed by the Russell 2000 (2.3%), the S&P 500 (2.1%), the Global Dow (1.6%), and the Dow (1.4%). Each of the market sectors advanced, led by information technology, consumer discretionary, and energy. Ten-year Treasury yields climbed to 1.48%. Crude oil prices rose to $71.54 per barrel. The dollar was unchanged.
Stocks continued to push higher last Wednesday as the S&P 500 and the Nasdaq inched toward record highs. The small caps of the Russell 2000 led the indexes, gaining 0.8%, ahead of the Nasdaq (0.6%), the S&P 500 (0.3%), the Global Dow (0.3%), and the Dow (0.1%). Yields on 10-year Treasuries rose again, reaching 1.5% at the close of trading. The dollar fell, while crude oil prices advanced for the third consecutive day, hitting $72.62 per barrel. Among the market sectors, communication services (0.8%) and health care (0.7%) climbed higher, while financials (-0.5%) and consumer staples (-0.4%) fell.
The three-day stock market rally ended last Thursday as losses in consumer discretionary, information technology, and real estate led the market lower. The volatile Russell 2000 dropped the furthest, down 2.3%, followed by the Nasdaq (-1.7%), the S&P 500 (-0.7%), and the Global Dow (-0.4). The Dow was little changed. Bond prices rose, pulling yields lower. Crude oil prices fell to $70.49 per barrel. The dollar inched higher. Among the market sectors, only health care and consumer staples posted gains.
Equities closed out the week on a high note last Friday. Several of the benchmark indexes listed here posted solid gains, led by the S&P 500 (1.0%), followed by the Nasdaq (0.7%), the Dow (0.6%), and the Global Dow (0.3%). The Russell 2000 dipped 0.4%. Ten-year Treasury yields inched higher, while crude oil prices rose 1.5% to $71.97 per barrel. The dollar slipped lower. Many market sectors rose, with information technology, consumer staples, and energy leading the way.

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THIS WEEK

The Federal Open Market Committee meets this week. Based on "hawkish" statements from Fed Chair Jerome Powell and other members, it is likely the Committee will further accelerate the tapering of its asset purchases. It is also possible that the timetable for raising interest rates could be moved up to mid-2022.

Source: Broadridge Investor Communication Solutions, Inc.

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Articles & Education

Capital Markets Update and Outlook: January 2023

Although the one-two punch of rising interest rates and inflationary pressure set the global capital markets on shaky footing through much of 2022, the U.S. economy kept motoring ahead. How are financial conditions shaping up in the new year?

- Read More -

Maximize Tax Benefits with a Qualified Charitable Distribution

The qualified charitable distribution has become popular with some IRA holders as a way of donating to charities while saving money on taxes.

- Read More -

Investment Term of the Week

Thought of the Week

DISCLOSURES

Please Note: McGee Wealth Management is a tradename. All services are provided by McGee Wealth Management investment professionals are provided in their individual capacities as investment adviser representatives of Mercer Global Advisors Inc. (“Mercer Advisors”), an SEC registered investment adviser principally located in Denver, Colorado, with various branch offices throughout the United States doing business under different tradenames, including McGee Wealth Management.

Mercer Advisors Inc. and/or Mercer Global Advisors Inc. WILL NOT ACCEPT time-sensitive transactional directives via email. This includes, but is not limited to a directive to buy or sell securities, instruction regarding account allocation or any other manner of change notice affecting a client account. For your protection, please do not include your social security number, account number, or any other personal or financial information in the content of the email.

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CONFIDENTIALITY NOTICE: This email and any attachments are strictly confidential and may be protected by legal privilege. If you are not the intended recipient, be aware that any disclosure, copying, distribution or use of this email or any attachment is STRICTLY PROHIBITED. If you have received this email in error, please notify us immediately by returning it to the sender and delete this copy from your system. Thank you for your cooperation.

Investment products are: Not deposits. Not FDIC or NCUA Insured. Not guaranteed by the ﬁnancial institution. Subject to risk. May Lose Value.The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a proﬁt or loss regardless of strategy selected. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. The Dow Jones Industrial Average (DJIA), commonly known as “The Dow” is an index representing 30 stock of companies maintained and reviewed by the editors of the Wall Street Journal. The NASDAQ composite is an unmanaged index of securities traded on the NASDAQ system. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary. Past performance does not guarantee future results. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. Asset allocation and diversiﬁcation do not ensure a proﬁt or guarantee against loss.

Certiﬁed Financial Planner Board of Standards Inc. owns the certiﬁcation marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with ﬂame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certiﬁcation requirements.

The ChFC® mark is the property of The American College, which reserves sole rights to its use, and is used by permission.

The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represent approximately 8% of the total market capitalization of the Russell 3000 Index.
The Global Dow is an equal-weighted stock index. It is composed of the stocks of 150 top companies from around the world as selected by Dow Jones editors and based on the companies' long history of success and popularity among investors.

Sector investments are companies engaged in business related to a speciﬁc sector. They are subject to ﬁerce competition and their products and services may be subject to rapid obsolescence. There are additional risks associated with investing in an individual sector, including limited diversiﬁcation. The companies engaged in the communications and technology industries are subject to ﬁerce competition and their products and services may be subject to rapid obsolescence. Investing in the energy sector involves special risks, including the potential adverse effects of state and federal regulation and may not be suitable for all investors.

There is no guarantee that ESG (Environmental, Social, Governance) investment products or strategies will produce returns similar to traditional investments. ESG investment criteria exclude certain securities/products for non-financial reasons, and therefore investors may forego some market opportunities available to those who do not use such criteria.

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MWM Weekly Update

The Week of December 20, 2021