Category: Wealth Management

You Inherited an IRA. Now What? 

Posted on by elaina

Navigating legislative changes like the SECURE Act and SECURE Act 2.0 can be bewildering, especially with their impact on inherited IRA Required Minimum Distributions (RMDs). But fear not! This article provides clarity with dos and don’ts, along with definitions, to simplify the process of managing an inherited IRA.

Key Considerations for Inherited IRA Beneficiaries 

Do’s: 

  • Determine the type of beneficiary you are – different beneficiaries have different rules on drawing down the IRA. 
  • Withdraw funds within the required timeframe under the new laws. 
  • Maintain at least the same withdrawal rate as the original owner if they had reached the Required Beginning Date (RBD) before their passing. 
  • Avoid the 25% under-withdrawal penalty by following the correct withdrawal schedule. 
  • If you have reached your own RBD, consider using inherited IRA RMDs for qualified charitable distributions. 
  • Understand that a “death distribution” exempts you from the 10% early withdrawal penalty but remains subject to ordinary income tax. 

Don’ts: 

  • Ignore the account and fail to withdraw funds. 
  • Overlook tax reporting requirements—each withdrawal generates a 1099-R. 
  • Assume only traditional IRAs are affected—these rules apply to Roth, SEP, and other IRAs. 
  • Neglect to consult your tax advisor for the most tax-efficient withdrawal strategy. 
  • Miss the opportunity to reinvest distributed IRA assets—speak with your financial advisor for reinvestment options. 

Understanding Your Beneficiary Type 

Inheriting an IRA comes with responsibilities, and understanding the rules can help you avoid costly mistakes. Whether you’re required to withdraw funds over a set period or have the flexibility to stretch distributions, the key is knowing where you stand. Failing to follow the guidelines can result in unnecessary penalties, but with careful planning, you can make the most of your inheritance while staying compliant with tax laws. 

Types of Beneficiaries+ –  

  • Eligible Designated Beneficiaries (EDBs) – are spouses*, a minor child of original owner, someone who is disabled**, someone who is chronically ill** or someone who is less than 10 years younger than the original IRA owner.   
  • Non-Person – an entity (i.e. Charity, or Estate)  
  • Non-Eligible Designated Beneficiary (Non EDBs) – everyone else 

Now that we understand the classifications of IRA beneficiaries, let’s look at the rules on how they must distribute the funds. By adhering to these guidelines, beneficiaries can navigate the complexities effectively. 

Withdrawal Requirements by Beneficiary Type

inherited an IRA

*Spouse beneficiaries – spouses are the only beneficiaries who can choose if they want to keep the inherited IRA as an inherited IRA or combine it with their own IRA.  There are reasons for both options, but this decision must be made no later than the year after the IRA owner’s death.  This decision cannot longer be reversed. 

**Disabled and chronically ill beneficiaries must provide qualifying documentation to Custodian no later than 10/31 of the year following the IRA owner’s death. 

***RBD – Required Beginning Date.  This pertains to the age of the original account owner and if they had already began taking annual Required Minimum Distributions (RMDs) prior to their death.  In 2024, that is April 1st of the year after turning 73. 

+Trust Beneficiaries are not mentioned in this article, as depending the type of trust and how it was established will determine if that trust is an EDB, Non EDB or Non-Person beneficiary. 

By adhering to these guidelines, beneficiaries can navigate the complexities effectively. Remember to determine your beneficiary type, adhere to withdrawal schedules, report withdrawals accurately, and seek professional advice for tax-efficient strategies and reinvestment options. Whether you’re an Eligible Designated Beneficiary (EDB), a Non-Eligible Designated Beneficiary (Non-EDB), or a non-person entity, staying informed and proactive is key to managing inherited IRAs with confidence and compliance. 

For more insights on wealth management and financial planning, check out our resource library or connect with one of our advisors at BentOak Capital.

 

Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by BentOak Capital (“BentOak”), or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from BentOak.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.  BentOak is neither a law firm, nor a certified public accounting firm, and no portion of the newsletter content should be construed as legal or accounting advice.  A copy of BentOak’s current written disclosure Brochure discussing our advisory services and fees is available upon request. Please Note: If you are a BentOak client, please remember to contact BentOak, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. BentOak shall continue to rely on the accuracy of information that you have provided or at www.bentoakcapital.com. Please Note: IF you are a BentOak client, Please advise us if you have not been receiving account statements (at least quarterly) from the account custodian.   

Beyond the Numbers: Experience Matters

Posted on by RFTB Dev

So, you’ve been considering hiring a financial advisor. You’ve delved into research, sought recommendations, and perhaps even sat down with a few advisors already. Amidst all this exploration, what insights have you gathered? No doubt, you’ve heard terms like “specialist,” “fiduciary,” and “tailored approach.” But what about the softer, yet equally crucial qualities like personability, relatability, and an understanding of your unique needs? These characteristics play a pivotal role in finding the perfect advisor for you. After all, granting someone access to one of the most sensitive aspects of your life can trigger emotional hurdles. Choosing the right financial advisor is more than just a rational decision based only on credentials and services offered. It’s an emotional journey that requires trust, understanding, and a genuine connection. You need an advisor who isn’t just knowledgeable but also someone with whom you can comfortably navigate uncomfortable conversations. 

The Human Element: Personable and Relatable Advisors 

Financial matters can be daunting, and having the right financial advisor who is approachable and relatable can make all the difference. Look for someone who takes the time to understand your individual circumstances and communicates in a way that resonates with you. You want someone who can guide you through the process without using confusing jargon or intimidating language. 

A personable advisor not only makes the process more enjoyable but also fosters a stronger advisor-client relationship built on trust and mutual respect. Instead of bombarding you with complex financial terms, they explain concepts in a way that feels relatable and easy to understand. An ideal advisor will be comfortable answering your questions and can confidently explain both the pros and cons of the recommendations they make. 

Comfort in Uncomfortable Conversations

Let’s face it, discussing money can be uncomfortable, especially when it involves topics of family or estate management. That’s why it’s crucial to find an advisor with whom you feel comfortable having candid conversations about your financial goals, concerns, and aspirations. A skilled advisor can create a safe space for these discussions, offering guidance and support every step of the way. 

Imagine you’re nearing retirement age and beginning to think about your estate planning. You’ve worked hard to accumulate wealth over the years, and now you want to ensure it is properly managed and distributed according to your wishes. However, the thought of discussing these matters, especially with your family, feels daunting. You’re unsure where to start and what questions to ask. 

This is where a trusted financial advisor comes in. Picture meeting with an advisor who not only has the expertise but also the empathy to understand your concerns. They create a welcoming environment where you feel comfortable opening up about your financial situation, your hopes for the future, and even your fears or uncertainties. With their guidance, you start to see a clearer path forward because they not only offer expertise but also create a safe space for honest discussions. 

Aligning Values: The Importance of Relatability

Beyond just being personable, finding an advisor whose values align with yours can enhance the overall advisory experience. Whether it’s a shared commitment to ethical investing or a systematic approach to risk management, having an advisor who understands and respects your values can lead to a more fulfilling and harmonious partnership. Together, you can work towards building a customized investment and income strategy that reflects both your financial goals and your personal values.

How to Find the Right Financial Advisor

In the quest to find the right financial advisor, it’s essential to consider not only their technical expertise but also their interpersonal skills and alignment with your values. By prioritizing these aspects, you can ensure that you’re not just hiring an advisor but forging a meaningful and enduring partnership centered around your financial well-being. So, as you continue your search for the perfect advisor, remember to trust your instincts and prioritize the qualities that matter most to you. After all, your financial future is too important to leave to chance.  

Here at BentOak Capital we strive to be that trusted source. If you’d like to set time to talk more with us please reach out. We’d happy to talk.

 

 Please remember to contact BentOak Capital (“BentOak”), in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you want to impose, add, to modify any reasonable restrictions to our investment advisory services, or if you wish to direct that BentOak to effect any specific transactions for your account. A copy of our current written disclosure Brochure discussing our advisory services and fees continues to remain available upon request or at www.bentoakcapital.com.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

The opinions voiced in this material are for general information only and are 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. 

Securities offered through LPL Financial, Member: FINRA/SIPC. Investment advice offered through BentOak Capital, a registered investment advisor and separate entity from LPL Financial. 

 

Should I Use a Donor Advised Fund When Giving to Public Charities?

Posted on by RFTB Dev

If you want to give money to your favorite charity, how should you do that? The obvious option is to write them a check (though these days, it’s more likely to be done electronically). Quick, easy, no strings attached. They get the money now to help keep their charitable mission going.

Exploring Ways to Give to Charities

Another way—less common but potentially more valuable—is to give the charity something else of value. For example:

You can donate any of these assets to a charity, which may keep them or sell them for cash.

No matter how or what you give1, you get an income tax deduction in the year you make the gift. However, in some circumstances, you may not actually be able to use the full tax deduction when you file your taxes.

For instance, if you don’t itemize deductions on your tax return, you won’t see any tax benefit for your charitable gift. In 2025, the standard deduction is $15,000 for a single filer and $30,000 for married couples filing jointly. So your charitable gifts, combined with state and local taxes, home mortgage interest, and certain medical expenses, must exceed these thresholds to count.

Understanding Donor Advised Funds

This is where a donor advised fund (DAF) can come into play. A DAF allows you to make a contribution to the fund and receive an immediate tax deduction, even if the money isn’t distributed to a charity right away. Think of it as your charitable savings account. You can contribute cash, stocks, or other assets to the fund, and your donation is invested until you decide which charity or charities to support.

So, should I use a donor advised fund? It depends on your goals and tax situation, but DAFs offer distinct advantages.

The Flexibility and Benefits of Donor Advised Funds

One of the major advantages of using a DAF is the flexibility it offers. You can contribute to your DAF in a high-income year, take the tax deduction, and then distribute the funds to your chosen charities over time. This allows you to maximize your tax benefits while still supporting your favorite causes.

Are you looking to simplify your charitable giving while gaining the ability to strategically support the causes you care about most? A DAF might be the right solution.

Additionally, a DAF gives you time to research and select charities that align with your philanthropic goals, rather than feeling rushed to make decisions by a deadline (such as December 31).

At BentOak Capital, we specialize in aligning your charitable giving with your overall financial goals, ensuring you make the most of opportunities like donor advised funds. With our expertise, we can help you strategically maximize both your tax benefits and the long-term impact of your generosity.

Donor Advised Funds as an Estate Planning Tool

One of the major advantages of using a DAF is the flexibility it provides. You can contribute to your DAF in a high-income year, take the tax deduction, and then distribute the funds to your chosen charities over time. This allows you to maximize your tax benefits while still supporting your favorite causes. 

There’s no greater joy than knowing your generosity can make a lasting difference. With a donor advised fund, you can ensure your charitable giving aligns with your values and creates a meaningful impact for years to come.

Should You Use a Donor Advised Fund? 

If you’re considering making a substantial charitable contribution and want to take advantage of immediate tax benefits, you might ask yourself: Should I use a donor advised fund?

A donor advised fund could be an excellent option. It provides flexibility, an opportunity to strategize your giving, and the ability to create a lasting impact. Just be sure to weigh the pros and cons carefully to ensure it’s the right fit for your charitable aspirations.

To learn how BentOak Capital can help you make the most of your charitable giving, contact us today.

 

 

1 There are of course rules for gifts of anything that’s not cash. For instance, some types of assets (the car, the house, the patents) require a qualified appraisal. Also, you have to fill out Form 8283.

 

Please remember to contact BentOak Capital (“BentOak”), in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you want to impose, add, to modify any reasonable restrictions to our investment advisory services, or if you wish to direct that BentOak to effect any specific transactions for your account. A copy of our current written disclosure Brochure discussing our advisory services and fees continues to remain available upon request or at www.bentoakcapital.com.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

The opinions voiced in this material are for general information only and are 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.

Securities offered through LPL Financial, Member: FINRA/SIPC. Investment advice offered through BentOak Capital, a registered investment advisor and separate entity from LPL Financial.

7 Mistakes to Avoid as you Approach Retirement

Posted on by RFTB Dev

As you approach retirement, ensuring that you have a solid financial plan in place is essential for a secure and stress-free transition. Retirement is a time for celebration and relaxation, but without careful preparation, common mistakes can jeopardize your savings and quality of life. In this blog, we’ll walk you through the seven biggest pitfalls to avoid as you approach retirement, empowering you to make informed decisions for a bright future.

1. Not Saving Enough

One of the biggest mistakes people make is not saving enough for retirement. It’s crucial to start saving early and consistently to build a sufficient nest egg. How do you know if you have enough? This is an area where we can provide you clarity on.

2. Ignoring Healthcare Costs 

Underestimating healthcare costs in retirement can be a costly mistake. Be sure to factor in potential medical expenses and consider purchasing supplemental insurance or long-term care coverage. As you approach retirement, it’s vital to understand how these expenses might impact your savings and plan accordingly.

Dental expenses are a great example that folks do not think about, can have a big impact. Healthcare costs are a major expense in retirement, with estimates suggesting a 65-year-old couple in 2024 will need about $315,000 to cover medical expenses throughout their lives. Individual estimates are around $165,000 for men and $147,000 for women, largely due to women’s longer life expectancy.

Medicare does not cover all expenses, leaving retirees to handle out-of-pocket costs such as premiums, deductibles, and services like dental or vision care.

With healthcare inflation averaging around 5% annually, planning ahead using Health Savings Accounts (HSAs) or supplemental insurance (e.g., Medigap) is essential to help mitigate these rising costs.

3. Relying Solely on Social Security 

While Social Security benefits can provide a valuable source of income in retirement, relying solely on them may not be sufficient. As you approach retirement, ensure you have diversified income sources, such as savings and investments, to maintain your standard of living. For affluent retirees, Social Security typically replaces a lower percentage of pre-retirement income compared to middle- or lower-income households. On average, Social Security replaces about 40% of pre-retirement earnings for the general population. However, for higher earners, this replacement rate drops significantly—often below 20%. This is due to Social Security’s benefit formula, which is designed to provide a higher replacement rate for lower-income individuals to help maintain a basic standard of living. Affluent individuals, who may have higher lifetime earnings, rely less on Social Security as their benefits max out based on a capped income level for taxable Social Security earnings.

4. Taking on Too Much Debt

Carrying high levels of debt into retirement can put a strain on your finances. Pay off as much debt as possible before retiring to reduce financial stress and free up more of your retirement income for living expenses and enjoyment.

5. Failing to Plan for Taxes

Many retirees underestimate the impact of taxes on their retirement income. As you approach retirement, developing a tax-efficient retirement strategy is key to considering factors such as withdrawal timing, Roth conversions, and tax diversification. Tax drag on your portfolio is a real thing that could impact your ability to grow your assets long term.

6. Not Having a Withdrawal Strategy 

Without a clear plan for how to withdraw from your retirement accounts, you risk running out of money too soon or depleting your savings unnecessarily. Develop a withdrawal strategy that takes into account 

factors such as tax implications, market conditions, and longevity risk. This step is critical to having confidence about how to replace your income during retirement. A good example of this is delaying Social Security benefits and drawing from the portfolio to help with longevity risk. You will have increased benefits from Social Security in the future and by taking distributions from an IRA during low-income years you will be able to pay less tax on those dollars versus waiting until RMD age. Also monitoring if withdrawal rates are too high and unsustainable. We do not want to run the risk of running out of money and so sometimes our value is talking through this to adjust high withdrawal rates. These are two of many examples when it comes to figuring out a withdrawal strategy. We have the ability to provide a visualizer for what retirement income can look like. See below an example in projecting future cash flows and withdrawals from portfolio.

7. Overlooking Inflation and Longevity 

Failing to account for inflation and the possibility of a longer-than-expected lifespan can erode your purchasing power and exhaust your savings prematurely. Adjust your retirement plan to account for inflation and consider strategies to mitigate longevity risk, such as annuities or delaying Social Security benefits.

By avoiding these common mistakes and taking proactive steps to plan for retirement, you can enhance your financial security and enjoy a more comfortable and fulfilling retirement. The best way to make sure that you do not make these mistakes is to build a financial plan with a financial advisor. Give our office a call today to have confidence as you enter into this new chapter in life!

 

Please remember to contact BentOak Capital (“BentOak”), in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you want to impose, add, to modify any reasonable restrictions to our investment advisory services, or if you wish to direct that BentOak to effect any specific transactions for your account. A copy of our current written disclosure Brochure discussing our advisory services and fees continues to remain available upon request or at www.bentoakcapital.com.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

The opinions voiced in this material are for general information only and are 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.

Securities offered through LPL Financial, Member: FINRA/SIPC. Investment advice offered through BentOak Capital, a registered investment advisor and separate entity from LPL Financial. 

What Do I Do if ____ Wins the Election?

Posted on by RFTB Dev

If you have strong political leanings, even the thought of the party you support losing a presidential election might be demoralizing. In that moment, you might be feeling frustrated, anxious, or even angry—you may even feel those emotions and tightness in your chest reading this. Hear me when I say this: it’s okay. These emotions are real and valid. We’re not here to lecture you or tell you that you’re wrong to feel that way. That said, let’s talk about why making rash investment decisions based on these feelings or the hypothetical outcomes of an administration you don’t support, such as “what do I do if Trump wins the election?” or “what do I do if Harris wins the election?”, could affect your long-term wealth. 

The Emotional Rollercoaster 

When the candidate you support loses, it’s natural to feel a mix of disappointment, fear, and uncertainty. This is more than just politics—it’s about values, beliefs, and the vision you have for you and your family’s future. It’s okay to feel disheartened. We understand that these moments can be deeply personal and emotional. You might start thinking that the economy will tank or that your investments are doomed. If you’re grappling with the question of “what do I do if Trump wins the election?” or “what do I do if Harris wins the election?”, remember that it’s crucial to focus on the long term. However, it’s crucial to remember that investing is a long-term game. Emotional reactions, while human, shouldn’t drive your investment strategy. 

Understanding the Emotional Side 

Behavioral finance tells us that our emotions significantly impact our financial decisions, often to our detriment. This phenomenon is known as “emotional investing,” where decisions are driven by fear, anxiety, or overconfidence. Studies have shown that emotional investors often sell in a panic during downturns or buy excessively during booms, resulting in poor long-term returns. 

Here’s a fact: U.S. and global markets have weathered countless political changes and uncertainties—World Wars I & II, the Cuban Missile Crisis, the Kennedy Assassination, U.S. Civil Rights unrest, the Vietnam War, Watergate, the Oil Embargo, the 1980s recession, the Technology and Y2K crisis, 9/11, the War in Iraq, the Housing Crisis, and Global Pandemics. Each time, markets have not only recovered but gone on to reach new highs again and again. Overreacting to a political shift can cause you to make inappropriate short-term decisions that could negatively affect your long-term plan. Your emotions might be telling you to flee, but history and data suggest otherwise. Take a look at Capital Group’s chart that goes back to the Great Depression all the way through 2023 if you’d like to see for yourself. 

Trump wins the election, Harris wins the election

The Facts: Politics and Market Performance

Historical data shows that the stock market doesn’t care who’s in the White House nearly as much as you might think. Sure, policies can influence specific sectors, but the overall market has a way of marching forward regardless of the political landscape. I’m sure just as you read that, you thought, “But wait, this time is different!”—and you might be right. But one thing we like to say is that while history may not repeat itself, it often rhymes. According to a Clearnomics study, the average annual return of the S&P 500 going back to 1933 was 14.5% during Democratic administrations and 10.7% during Republican ones. Over the past century, the market has consistently grown, despite numerous changes in political leadership. The average annual return of the S&P 500 since its inception in 1926 is about 10%. This growth is driven by innovation, productivity, and the economic fundamentals of the country, not by short-term political events.

Keeping Your Eye on the Prize 

Long-term investors don’t get bogged down by political noise. They understand that their goals—whether it’s retirement, buying a home, or funding a legacy for their kids and grandkids—require a steady, disciplined approach. So, if you’re wondering, “what do I do if Trump wins the election?” or “what do I do if Harris wins the election?” remember that panicking over an election and making knee-jerk changes to your portfolio can derail these goals. 

At BentOak Capital, we’re here as your lookout. We’re the ones who sift through the noise, analyze the data, and keep your investments aligned with your long-term objectives. May we kindly remind you to focus on what truly matters: your family, your dreams, and your future. 

A Call for Perspective

If you find yourself spiraling now, during, or after the election cycle, take a step back and breathe. Remember that a single political event is often nothing more than a blip in the grand scheme of your financial journey. Lean on us for guidance and support. We understand the emotional turbulence and are here to provide a steady hand. 

Ultimately, what matters most is not who sits in the Oval Office but what’s happening in your life and the lives of those you care about. Your family, your passions, your future. Let us handle the intricacies of the market while you focus on what truly matters. 

Remember, BentOak Capital is here to support you through every twist and turn. We’re committed to guiding you with empathy, understanding, and a solid grounding in facts and logic. Together, we’ll navigate the uncertainties and keep your financial future on track.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. 

Investing involves risk including loss of principal. No strategy assures success or protects against loss. 

The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful. 

This information is not intended to be a substitute for individualized tax advice. We suggest that you discuss your specific tax situation with a qualified tax advisor. 

Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended and/or undertaken by BentOak Capital [“BentOak”]), or any non-investment related services, will be profitable, equal any historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. BentOak is neither a law firm, nor a certified public accounting firm, and no portion of its services should be construed as legal or accounting advice. Moreover, you should not assume that any discussion or information contained in this document serves as the receipt of, or as a substitute for, personalized investment advice from BentOak. Please remember that it remains your responsibility to advise BentOak, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. 

Please remember to contact BentOak Capital (“BentOak”), in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you want to impose, add, to modify any reasonable restrictions to our investment advisory services, or if you wish to direct that BentOak to effect any specific transactions for your account. A copy of our current written disclosure Brochure discussing our advisory services and fees continues to remain available upon request or at www.bentoakcapital.com.

Securities offered through LPL Financial, Member: FINRA/SIPC. Investment advice offered through BentOak Capital, a registered investment advisor and separate entity from LPL Financial. 

Trump vs. Harris: How the Upcoming Election Impacts Financial Plans

Posted on by RFTB Dev

As the presidential election on November 5 approaches, the financial landscape is filled with questions about how this election impacts financial plans. Recent polls indicate a competitive race between former President Donald Trump and Vice President Kamala Harris. Both candidates are actively campaigning in key swing states, which has raised concerns among investors about the potential impact of the election results on their portfolios.

For many, understanding how the election impacts financial plans is key to making informed decisions about long-term strategy. Given the significant political divisions in recent years, emotions surrounding this election are understandably heightened. In this context, it is essential for investors to remain focused on their long-term financial strategies and not allow political developments to disrupt their plans.

Tax Policy is Uncertain, Especially Relating to Estate Planning

As citizens, voters, and taxpayers, the result of this election could have important implications for our everyday lives. However, when it comes to investment portfolios, political preferences should not dictate decisions. Historically, it is the markets and economic conditions that influence election outcomes, rather than the reverse. Therefore, it’s crucial to participate in the election process without allowing political sentiments to affect financial strategies. 

One of the most complex issues related to the election is tax policy. The Tax Cuts and Jobs Act (TCJA) is set to expire at the end of 2025, which introduces uncertainty regarding individual and corporate tax rates and creates a potential “tax cliff.” The candidates have differing views on corporate taxes, individual rates, capital gains, tax credits, and more. 

Although it’s tempting to react immediately, it’s important to take a balanced view of how the election impacts financial plans. While taxes undoubtedly affect households and businesses, their impact on the overall economy and stock market is not always straightforward. Taxes are just one of many factors influencing economic growth and investment returns, and various deductions, credits, and strategies can mitigate the effective tax rate.

Currently, tax rates are relatively low by historical standards, regardless of whether the top marginal tax rate is 37% or 39.6%. Given the increasing federal debt, investors should prepare for the likelihood of tax rates rising in the future, whether that occurs after this election or not. Planning for this potential change, ideally with the guidance of a trusted advisor, is becoming increasingly important.

One area where taxes remain particularly low is estate taxes, which apply to the transfer of assets to heirs after death. The Tax Cuts and Jobs Act (TCJA) doubled the estate tax exemption amount, which has been adjusted for inflation to reach $13.6 million for 2024. Without further legislative action, this exemption is expected to revert to its pre-TCJA level—approximately $6.8 million per individual by 2026, adjusted for inflation.

Although estate taxes generate only a small portion of government revenue and affect a limited number of individuals, they have become a contentious political issue. The future of estate taxes will largely depend on the outcome of this election, including the results of Congressional races. For many affluent households, these developments could significantly impact their tax and estate planning strategies.

Global Trade and Tariffs Will Depend on the Election

The candidates also have differing views on potential trade policies, particularly regarding tariffs. While the trend of deglobalization and the reshoring of manufacturing—bringing production closer to the U.S.—is likely to continue, the specific use of tariffs to enhance U.S. competitiveness and generate revenue may hinge on the election outcome. During his administration, President Trump implemented several tariffs, many of which were maintained by the Biden administration.

Historically, tariffs were a significant component of trade policy and a major source of revenue for the U.S. government. However, in recent decades, their role has diminished. The establishment of organizations and trade agreements, such as the WTO, NAFTA, and the USMCA, has helped reduce trade barriers among key partners. Despite this, tariffs are still used periodically to protect domestic industries and intellectual property, including sectors like steel, electronics, semiconductors, and agriculture.

For investors concerned about the possibility of a trade war, it’s important to remember that similar fears in 2018 and 2019 did not result in the worst-case scenarios that many anticipated. During that period, the economy remained robust, with unemployment near historic lows and inflation effectively nonexistent, even late in the business cycle. Ongoing negotiations between key trading partners also alleviated some concerns. As illustrated in the accompanying chart, the U.S. has consistently maintained a trade deficit with many countries across various trade regimes.

The Economy Has Grown Under Both Major Parties 

Historically, the economy has shown growth under both major political parties, and bull markets have occurred regardless of who is in the White House. While it might seem counterintuitive, politics typically has a limited impact on the economy and financial markets. More significant factors include the business cycle and broad trends, such as advancements in artificial intelligence and technology, declining inflation, and a robust job market.

Despite the perceived significance of this election, policy changes tend to be gradual due to the checks and balances inherent in our political system. Candidates’ campaign promises often differ from what they can realistically implement.

Regarding taxes, neither candidate is suggesting a return to the high tax rates of the pre-Reagan era, when the top marginal rate reached as much as 94%. Similarly, while tariffs may increase, they are unlikely to rise to the levels seen during the Great Depression nearly a century ago. Keeping these facts in mind is crucial when planning for the next four years.

Keeping Perspective on How This Election Impacts Financial Plans 

The upcoming election impacts financial plans in ways that may be subtle yet significant over time. While it’s natural to consider potential policy changes, investors should remember that the economy has grown under both major parties. By keeping a steady perspective, investors can focus on broader, long-term trends rather than immediate political shifts.

The opinions voiced in this material are for general information only and are 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. 

Investing involves risk including loss of principal. No strategy assures success or protects against loss. 

The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies.

Bond yields are subject to change. Certain call or special redemption features may exist which could impact yield promoted will be successful.

The fast price swings in commodities will result in significant volatility in an investor’s holdings. Commodities include increased risks, such as political, economic, and currency instability, and may not be suitable for all investors.

Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended and/or undertaken by BentOak Capital [“BentOak”]), or any non-investment related services, will be profitable, equal any historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. BentOak is neither a law firm, nor a certified public accounting firm, and no portion of its services should be construed as legal or accounting advice. Moreover, you should not assume that any discussion or information contained in this document serves as the receipt of, or as a substitute for, personalized investment advice from BentOak. Please remember that it remains your responsibility to advise BentOak, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services.

Please remember to contact BentOak Capital (“BentOak”), in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you want to impose, add, to modify any reasonable restrictions to our investment advisory services, or if you wish to direct that BentOak to effect any specific transactions for your account. A copy of our current written disclosure Brochure discussing our advisory services and fees continues to remain available upon request or at www.bentoakcapital.com. 

Securities offered through LPL Financial, Member: FINRA/SIPC. Investment advice offered through BentOak Capital, a registered investment advisor and separate entity from LPL Financial.

Copyright (c) 2024 Clearnomics, Inc. All rights reserved. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, or correctness of the information and opinions contained herein. The views and the other information provided are subject to change without notice. All reports posted on or via www.clearnomics.com or any affiliated websites, applications, or services are issued without regard to the specific investment objectives, financial situation, or particular needs of any specific recipient and are not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Past performance is not necessarily a guide to future results. Company fundamentals and earnings may be mentioned occasionally, but should not be construed as a recommendation to buy, sell, or hold the company’s stock. Predictions, forecasts, and estimates for any and all markets should not be construed as recommendations to buy, sell, or hold any security–including mutual funds, futures contracts, and exchange traded funds, or any similar instruments. The text, images, and other materials contained or displayed in this report are proprietary to Clearnomics, Inc. and constitute valuable intellectual property. All unauthorized reproduction or other use of material from Clearnomics, Inc. shall be deemed willful infringement(s) of this copyright and other proprietary and intellectual property rights, including but not limited to, rights of privacy. Clearnomics, Inc. expressly reserves all rights in connection with its intellectual property, including without limitation the right to block the transfer of its products and services and/or to track usage thereof, through electronic tracking technology, and all other lawful means, now known or hereafter devised. Clearnomics, Inc. reserves the right, without further notice, to pursue to the fullest extent allowed by the law any and all criminal and civil remedies for the violation of its rights.

Do I Need to Hire a CERTIFIED FINANCIAL PLANNER® Professional?

Posted on by RFTB Dev

Financial advice and planning are unique to each individual’s situation—and so is the decision to hire a CERTIFIED FINANCIAL PLANNER® professional. For instance, a business owner may need guidance structuring their first deal, while a doctor may seek tax-efficient retirement strategies. A recent retiree might need help creating a steady income from their nest egg. The needs vary because everyone’s goals and paths differ.  

Why Should I Hire a CERTIFIED FINANCIAL PLANNER® Professional? 

While financial planning is always personalized, there are key reasons why many individuals should consider hiring a CERTIFIED FINANCIAL PLANNER® professional. 

Reduce the Noise 

In today’s world, information is everywhere. But where do you start? Do you trust your neighbor, a news anchor, or a targeted ad on social media? While picking up trends may not require a discerning eye, high-quality financial guidance does. When you hire a CERTIFIED FINANCIAL PLANNER® professional, you reduce the noise and gain a reliable source for your questions or concerns. CERTIFIED FINANCIAL PLANNER® professionals are committed to offering personalized, sound advice. Plus, as fiduciaries, they are bound to act in your best interest. 

Compare this to flashy headlines designed to grab attention and clicks, often by presenting slanted facts. Following advice from unreliable sources can steer you off course, potentially derailing your financial goals. A CERTIFIED FINANCIAL PLANNER® professional can cut through the noise, breaking down facts and misconceptions to keep you focused on what matters most. 

Take Your Time Back  

Americans lead fast-paced lives. Whether you’re just entering the workforce, in the midst of your career, or preparing for retirement, chances are your schedule is full. Financial planning is a complex task that demands time and effort—resources many of us don’t have to spare. Seeking simplicity, many people turn to professionals in other areas of their lives. Just as you would consult a doctor for your health, you should consult a professional for your financial well-being. 

CERTIFIED FINANCIAL PLANNER® professionals dedicate their careers to helping people navigate the complexities of personal finance. By analyzing your plans and identifying potential weaknesses, they ensure your financial strategy aligns with your goals. Delegating this responsibility to a professional allows you to focus on what matters most to you. 

Navigate the Complex 

When was the last time you reviewed your company’s retirement plan benefits? Will they be enough when you retire? That depends. When you hire a CERTIFIED FINANCIAL PLANNER® professional, they can help you understand the ins and outs of your company’s retirement plan, ensuring you make the most of its features. Retirement plans vary widely, and a CFP® professional can guide you in leveraging your plan to fit your personal financial situation. 

Check out one of our other blog posts for more on when to hire a financial advisor. 

What Do I Need? 

When you hire a CERTIFIED FINANCIAL PLANNER® professional with the right expertise, you gain access to a wide range of services—investment management, tax planning, estate planning, and cash flow management, to name a few. However, financial planning is not one-size-fits-all. Some may need ongoing support, while others require only a one-time consultation to get started on the right path. Your personal circumstances will dictate what type of service you need, and a good advisor will help you figure out the best fit. 

Still unsure? Reach out to us. We’d be happy to help you determine whether you’re ready to hire a financial advisor. 

 

Please remember to contact BentOak Capital (“BentOak”), in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you want to impose, add, to modify any reasonable restrictions to our investment advisory services, or if you wish to direct that BentOak to effect any specific transactions for your account. A copy of our current written disclosure Brochure discussing our advisory services and fees continues to remain available upon request or at www.bentoakcapital.com.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.   

The opinions voiced in this material are for general information only and are 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.    

Securities offered through LPL Financial, Member: FINRA/SIPC. Investment advice offered through BentOak Capital, a registered investment advisor and separate entity from LPL Financial. 

A Quick Guide to Understanding and Maximizing Your Employee Benefits

Posted on by RFTB Dev

Understanding and maximizing your employee benefits is crucial to pursuing long-term financial stability and well-being. If you’ve recently received notification that it’s time for your annual Benefits Election season, this guide will help you navigate the options available to you. Employee benefits are a critical component of your overall compensation package, and understanding them can have a lasting impact on your financial security, health, and confidence. However, many employees overlook or misunderstand these benefits, leaving valuable opportunities untapped. This guide breaks down key aspects of employee benefits—financial, insurance, and lesser-known perks—so you can make informed decisions.

Financial Benefits 

Financial benefits, such as retirement plans and stock/incentive programs, are some of the most valuable offerings an employer can provide. Here’s what you need to know: 

401(k) and Similar Plans 

Many employers offer tax-advantaged retirement savings vehicles that allow employees to set aside a portion of their income for the future. If your employer offers a 401(k), 403(b), or something similar, maximizing your employee benefits should start with taking advantage of this opportunity. 

  • Enrolling for the First Time: When you join a company that offers a retirement plan, you may have the option to enroll immediately or after a short waiting period. Be sure to complete the enrollment process as soon as you’re eligible and begin contributing to the plan. (We have a simple guide to 401(k) enrollment here.) 
  • Reviewing if You Are Already Enrolled: If you are already contributing to an employer retirement account, it’s important to review your plan periodically. In another one of our blogs, we do a deep dive of three things to review regularly in your 401(k), but here are a few of the high points: 
  • Contribution and Employer Match: Check if you are contributing enough to maximize your employer’s matching contributions, at a minimum. Employer matches are essentially free money, so aim to contribute at least up to the match threshold. Also aim to increase your contribution amount annually, if possible. 
  • Allocation: Evaluate how your funds are allocated. Are you appropriately diversified across asset classes like stocks, bonds, and cash? Rebalancing your investments at least once a year can help keep your risk levels in check. If you have investments outside of your employer retirement account, make sure you consider your overall portfolio allocation, not just that of your 401(k). 
  • Beneficiaries: Review and update your beneficiaries, especially after major life events like marriage, the birth of a child, or divorce. Ensuring your 401(k) assets go to the right people is essential for effective estate planning. 

Stock Plans and Incentive Benefits 

Many employers offer stock options or other incentive programs as part of their benefits package. These can include stock purchase plans, stock options, or performance-based bonuses. 

Different companies offer different types of stock or incentive programs. Make sure you fully understand the rules of your plan and their potential consequences, including: 

  • Vesting: This is the process by which you gain full ownership of your stock or options. Understand your company’s vesting schedule to know when you can sell your shares. 
  • Taxes: Stock options and other equity awards can have significant tax implications. Be aware of whether you are dealing with non-qualified stock options (NSOs) or incentive stock options (ISOs), as they have different tax treatments. 
  • Holding Periods: Some stock awards require you to hold your shares for a certain period before selling to qualify for favorable tax treatment. Review these rules to maximize your after-tax return. 

Insurance Benefits 

Employer-provided insurance benefits can protect you and your family against significant financial risks. Reviewing these benefits regularly ensures you have adequate coverage without paying for unnecessary extras. 

Life Insurance 

Employer-provided life insurance is a common benefit, often in the form of group term life insurance. 

  • Current or Future Need for Coverage: Consider whether the amount provided by your employer is sufficient. If not, you may want to purchase additional coverage either through your employer or on the individual market. 
  • Cost: Group life insurance is generally less expensive than a term life policy purchased individually because the employer negotiates a group rate. However, compare costs if you need additional coverage. 
  • Portability: Employer-sponsored life insurance often (but not always) ends when you leave the company. Check to see if you have a portable policy that you can take with you. Some group life policies will allow you to continue coverage if you are willing to pay premiums out of pocket. 
  • Your Health Status: If you have a health condition that might make getting individual coverage difficult, maximizing your employer’s life insurance could be a good strategy. 

Health Insurance 

Health insurance is one of the most essential employee benefits, and it can vary significantly between employers. Here’s what to review: 

  • Options Available to You: Review the cost (including premiums, deductibles, co-pays, and co-insurance) for each health plan option your employer offers. Compare coverage against your health needs. Ensure your primary care physician is considered “in-network” for any plan. 
  • Dependents: If you’re covering dependents, such as a spouse or children, ensure the plan’s network and coverage meet their healthcare needs as well. If applicable, coordinate with a spouse’s insurance plan to determine the best family arrangement. 
  • Non-Insurance Health Benefits: Some employers offer supplemental health benefits, such as critical care or hospital indemnity plans. These plans can provide additional coverage if you’re diagnosed with a severe illness or require hospitalization. 
  • HSAs, HRAs, and FSAs: Health Savings Accounts (HSAs), Health Reimbursement Arrangements (HRAs), and Flexible Spending Accounts (FSAs) are tax-advantaged accounts that can help you save on medical expenses. HSAs in particular are valuable as they can serve as a secondary retirement account, thanks to their triple tax advantage. 

Disability Insurance 

Disability insurance replaces a portion of your income if you become unable to work due to illness or injury and can often be the difference between paying for childcare, groceries, and the mortgage, or being unable to make ends meet. 

  • Emergency Fund: If you don’t have substantial savings, disability insurance can fill the gap. The need for coverage usually decreases as your emergency fund grows. 
  • Coverage: Short-term disability typically covers the first 3 to 12 months of disability, paying between 40-70% of your salary. Long-term disability covers disabilities lasting longer than one year, usually paying between 60-80% of your salary. 
  • Definition of Disability: Make sure you understand how your employer defines “disability.” Some plans only pay if you cannot work in any occupation, while others cover you if you cannot perform your specific job (own-occupation). 

Other Benefits 

Beyond the standard financial and insurance benefits, many employers offer additional perks that can improve your financial and personal well-being. 

  • Student Loan Repayment: Some employers help with student loan repayment and even “match” an employee’s 401(k) contributions by paying toward the loan. This can help you pay off debt faster and save on interest. 
  • Legal Services: Legal assistance plans provide access to affordable legal services for things like will preparation, estate planning, or legal representation. We’ve previously discussed the importance of having basic estate planning documents. This benefit can be an inexpensive way to fill that gap. 
  • Employee Assistance Programs (EAPs): EAPs offer support for various personal issues, including counseling for mental health, substance abuse, and family matters. 

Final Thoughts on Maximizing Your Employee Benefits 

Understanding and maximizing your employee benefits is key to pursuing financial freedom and protecting your health and well-being. Take the time to review your benefits annually. Stay informed about any changes to your employer’s benefits package, and don’t hesitate to seek advice from HR professionals or financial advisors (like us!). This proactive approach will help ensure you’re leveraging every advantage your employer offers. 

 

Please remember to contact BentOak Capital (“BentOak”), in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you want to impose, add, to modify any reasonable restrictions to our investment advisory services, or if you wish to direct that BentOak to effect any specific transactions for your account. A copy of our current written disclosure Brochure discussing our advisory services and fees continues to remain available upon request or at www.bentoakcapital.com.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor. 

This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material. 

No investment strategy assures a profit or protects against loss. 

Securities offered through LPL Financial, Member: FINRA/SIPC. Investment advice offered through BentOak Capital, a registered investment advisor and separate entity from LPL Financial.

5 Insights on the Fed, Election, and Volatility in Q4

Posted on by RFTB Dev

As we enter the final quarter of the year, financial markets and the economy have surprised many investors. Instead of entering a recession, the economy has experienced steady, albeit slower, growth, and inflation rates have decreased toward the Federal Reserve’s target. This shift has led to a cycle of monetary easing, driving the S&P 500 and Dow Jones Industrial Average to new all-time highs and improving bond returns. The performance of the first three quarters serves as a reminder that focusing on long-term trends is often more beneficial than fixating on past events.

1. The Market Achieves Many New All-time Highs During Bull Markets

 

Of course, there are still many risks in the months ahead. The path of Federal Reserve policy remains uncertain, and investors are currently debating the magnitude of the next rate cut. The presidential election is competitive, with wide-ranging implications for tax policy, regulation, trade, and more. Additionally, geopolitical conflicts are escalating, which could affect global stability, supply chains, and oil prices. Market volatility is always a possibility, especially given the elevated levels of valuations and earnings expectations.

However, it’s important to recognize that facing risks is an inherent part of investing and planning for the future. The way investors respond to these risks ultimately determines their financial success. Instead of trying to time the market to avoid risks, it is generally more effective to maintain a well-constructed portfolio capable of withstanding various market conditions. Below, we discuss five key factors driving the market and their implications for investors in the coming months.

First, the market has reached multiple new all-time highs this year, including during the most recent quarter. While this performance is promising, it can also make some investors anxious, leading to concerns about a potential pullback.

Historically, during bull markets, stock indices often hit new all-time highs, as illustrated in the accompanying chart. This is largely expected and results from sustained earnings, economic growth, and improving investor sentiment. New highs are not reliable indicators of impending market declines, as the underlying trends in the market and economy are far more important. Attempting to time the market based solely on index levels often proves counterproductive.

Market fluctuations are an unavoidable aspect of investing, and declines will occur at some point. However, predicting the timing of these declines is challenging. Historically, markets have experienced both higher highs and higher lows. For instance, the pullbacks in April and August of this year serve as reminders that the market can recover more quickly than many investors anticipate. While past performance does not guarantee future results, it is often wiser to remain invested rather than attempting to time market entries and exits.

2. The Market Has Performed Well Under Both Political Parties

 

Many investors are concerned about how the upcoming presidential election might impact the economy. According to polling data from the Pew Research Center, 80% of registered voters consider the economy a very important factor in their voting decisions. As the election race heats up, it’s essential to remember that while elections matter for the country, we should avoid making investment decisions solely based on political events.

Historically, the stock market has demonstrated long-term growth under both major political parties, as illustrated in the accompanying chart. Market performance does not typically collapse when a particular party is in power because the fundamental drivers of market success—such as economic cycles, earnings, and valuations—are far more significant than who occupies the White House.

In addition to the upcoming domestic election, this year has been labeled an “election supercycle” year. Approximately 70 countries around the world are holding elections this year, affecting about two-thirds of the global population. Many countries are facing similar concerns to those we see in the U.S., including inflation, energy issues, high debt levels, immigration, and defense/security matters. Despite these challenges and the resulting changes in policy and government composition, global markets have generally remained stable throughout the year.

 

That said, policies can influence taxes, trade, industrial policy, and regulatory frameworks. However, these policy changes usually unfold gradually, and their timing and impact are often overestimated. What politicians promise during campaigns can differ significantly from what is actually implemented. Therefore, investors should concentrate on long-term economic and market trends rather than daily polling data. If you have any questions about the election and its potential outcomes and you financial plan, please don’t hesitate to reach out to your advisor.

3. The Fed is Expected to Cut Rates Further

 

Third, the rate of inflation is showing signs of moderation, with the latest data indicating that the PCE price index— the Federal Reserve’s preferred measure of inflation—rose only 2.2% compared to a year earlier, approaching the Fed’s target rate of 2%. At the same time, the labor market is showing signs of slowing, with the unemployment rate at 4.2%, which remains low by historical standards.

These economic conditions have paved the way for the Fed’s first 50 basis point interest rate cut in September, with additional cuts anticipated throughout the year and into 2025. The market had been expecting various cuts all year and reacted positively following the announcement.

Analyzing historical rate cuts can be complex, as the reasons behind the Fed’s decisions are often more significant than the timing or magnitude of the cuts. The Fed typically lowers rates during economic or financial crises, such as in 2008 or 2020, when prolonged struggles for the economy and markets are expected.

In contrast, the current scenario aims for balance, or what is often referred to as a “soft landing,” similar to the Fed’s actions in the mid-1990s. After rapid rate hikes in 1994, the Fed initiated cuts in 1995 once inflation concerns eased, setting the stage for a prolonged economic expansion and bull market. While this is just one example, it’s crucial to draw accurate historical parallels when considering Fed policy.

4. The Fixed Income Landscape is Shifting

 

Recent Federal Reserve rate cuts have led to lower interest rates across various maturities and a “disinversion” of the yield curve, often referred to as a “bull steepener,” which can be beneficial for bonds. This shift represents a reversal from the bear market in bonds experienced in 2022, when rates were rising.

Bond prices typically move inversely to interest rates. As market rates fall, existing bonds with higher interest rates become more valuable. Consequently, current bondholders not only enjoy higher-than-average yields but may also see price appreciation if rates continue to decline.

For the economy, lower interest rates reduce borrowing costs for both corporations and individuals, which can stimulate economic growth and investment. This improved economic environment often leads to better corporate earnings and fundamentals. Therefore, despite the challenges bonds have faced in recent years, it remains crucial to maintain a balanced approach across different asset classes.

5. Geopolitical Conflicts are Worrisome But Do Not Directly Impact Markets

Finally, tensions have escalated in the Middle East due to the intensifying conflict between Israel and Hezbollah, adding to existing global geopolitical strains, such as the ongoing war between Russia and Ukraine. While these events have significant real-world implications, their effects on the economy and stock market can be less predictable, and any impact on investors’ portfolios is usually temporary. As illustrated in the accompanying chart, prolonged market downturns often align with major events, such as the dot-com crash or the rate hikes in 2022.

One way that regional conflicts can influence the broader economy is through oil prices. The recent escalation in the Middle East has led to a slight increase in oil prices, but this rise is modest compared to previous crises. Additionally, the United States’ status as the world’s largest oil and gas producer may offer some protection from global disruptions.

Despite these geopolitical uncertainties, the stock market has only seen two pullbacks of 5% or more this year, highlighting the importance of maintaining investment strategies and focusing on broader market trends rather than reacting to headlines.

In summary, with the Federal Reserve lowering interest rates, an election approaching, and markets nearing all-time highs, it’s crucial to prioritize long-term financial goals over short-term events.

 

IMPORTANT DISCLOSURE INFORMATION

The opinions voiced in this material are for general information only and are 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.

Investing involves risk including loss of principal. No strategy assures success or protects against loss.

The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies.

Bond yields are subject to change. Certain call or special redemption features may exist which could impact yield promoted will be successful.

The fast price swings in commodities will result in significant volatility in an investor’s holdings. Commodities include increased risks, such as political, economic, and currency instability, and may not be suitable for all investors.

Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended and/or undertaken by BentOak Capital [“BentOak”]), or any non-investment related services, will be profitable, equal any historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. BentOak is neither a law firm, nor a certified public accounting firm, and no portion of its services should be construed as legal or accounting advice. Moreover, you should not assume that any discussion or information contained in this document serves as the receipt of, or as a substitute for, personalized investment advice from BentOak. Please remember that it remains your responsibility to advise BentOak, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services.

Please remember to contact BentOak Capital (“BentOak”), in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you want to impose, add, to modify any reasonable restrictions to our investment advisory services, or if you wish to direct that BentOak to effect any specific transactions for your account. A copy of our current written disclosure Brochure discussing our advisory services and fees continues to remain available upon request or at www.bentoakcapital.com.

Securities offered through LPL Financial, Member: FINRA/SIPC. Investment advice offered through BentOak Capital, a registered investment advisor and separate entity from LPL Financial.

Copyright (c) 2024 Clearnomics, Inc. All rights reserved. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, or correctness of the information and opinions contained herein. The views and the other information provided are subject to change without notice. All reports posted on or via www.clearnomics.com or any affiliated websites, applications, or services are issued without regard to the specific investment objectives, financial situation, or particular needs of any specific recipient and are not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Past performance is not necessarily a guide to future results. Company fundamentals and earnings may be mentioned occasionally, but should not be construed as a recommendation to buy, sell, or hold the company’s stock. Predictions, forecasts, and estimates for any and all markets should not be construed as recommendations to buy, sell, or hold any security–including mutual funds, futures contracts, and exchange traded funds, or any similar instruments. The text, images, and other materials contained or displayed in this report are proprietary to Clearnomics, Inc. and constitute valuable intellectual property. All unauthorized reproduction or other use of material from Clearnomics, Inc. shall be deemed willful infringement(s) of this copyright and other proprietary and intellectual property rights, including but not limited to, rights of privacy. Clearnomics, Inc. expressly reserves all rights in connection with its intellectual property, including without limitation the right to block the transfer of its products and services and/or to track usage thereof, through electronic tracking technology, and all other lawful means, now known or hereafter devised. Clearnomics, Inc. reserves the right, without further notice, to pursue to the fullest extent allowed by the law any and all criminal and civil remedies for the violation of its rights.

5 Things to Consider When Reviewing Your Beneficiary Designations

Posted on by RFTB Dev

As life changes your goals may change. Beneficiary designations are powerful and should reflect your values. It is best to review these annually with your financial planner to ensure your assets are distributed as you wish and to reduce time, money, and stress.

Here are five things to consider when reviewing your beneficiary designations.

Revocable vs. Irrevocable Beneficiaries

Understanding the implications of each designation type is important. The most common type of beneficiary is a revocable beneficiary, meaning that the account owner has the flexibility to rename those listed as frequently as he/she wishes. Irrevocable beneficiaries are more permanent in nature; the account owner cannot rename without the current beneficiary consenting to this change. 

Relationship Dynamics and Primary/Secondary Beneficiaries

Life events such as birth, marriage, divorce, and even the loss of a loved one can all significantly alter your priorities. Recognizing the need to update beneficiaries based on changes in relationships or family structure ensures designations are aligned with current life circumstances.

Additionally, ensuring that both primary and secondary beneficiaries are listed is important.

Primary beneficiaries are designated to receive an asset first. Secondary, or contingent beneficiaries are designated to receive an asset if the primary beneficiary passes away before you do, or else disclaims (refuses to inherit) the asset. It is best to get detailed; list percentages designated to each beneficiary and how you would like the assets to be distributed.

Financial Position Changes

Your assets today are most likely not the same as they were five or ten years ago or what they will be in five or ten years from now. Major financial events such as inheritance, sale of a business, or job changes should prompt reassessment. 

Beneficiary Alignment with Will or Trust Intentions

Beneficiary designations on your accounts override intentions stated in your Will. A Will is subject to interpretation by probate court and in some extraordinarily contentious situations, can be contested by family members. By naming beneficiaries, you are utilizing a powerful tool, so it is important to ensure there is consistency between the two. You can also avoid probate by building a trust. Ensuring that both documents reflect your intentions helps avoid potential conflict and ensures your wishes are executed smoothly. 

Executor Communication with Beneficiaries 

Providing your executor with contact information for beneficiaries streamlines the asset distribution process after your passing. This proactive step reduces the burden on your executor and facilitates efficient communication during estate proceedings.  

Here at BentOak Capital, we understand that naming or un-naming beneficiaries can be difficult. We put emphasis on alignment with person values when reviewing your designations to promote clarity and confidence knowing that your wishes will be fulfilled.

 

Please remember to contact BentOak Capital (“BentOak”), in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you want to impose, add, to modify any reasonable restrictions to our investment advisory services, or if you wish to direct that BentOak to effect any specific transactions for your account. A copy of our current written disclosure Brochure discussing our advisory services and fees continues to remain available upon request or at www.bentoakcapital.com.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor. 

The opinions voiced in this material are for general information only and are 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. 

Securities offered through LPL Financial, Member: FINRA/SIPC. Investment advice offered through BentOak Capital, a registered investment advisor and separate entity from LPL Financial.