Welcome back to 2000! Mortgage rates are over seven percent1, car loan rates are up, and borrowing of all stripes has become substantially more expensive than just one, five, and even fifteen years ago! My goodness, something must be dramatically broken for the world to roll back the clock that far. It feels simply regressive, and nobody likes to regress. But are we regressing economically?  

 

Investors may find higher interest rates helpful if they are showered with larger interest payments, the likes of which haven’t been seen in a long time. Perhaps, the current interest rate environment will provide for a ‘healthier’ economy by creating balance in capital markets in time. However, the quick rise in rates has thrown things off-balance for now and if we don’t regress economically, a pullback appears likely.  

 

Interest rates may not be sufficient to sink the economy single-handedly, but recession fears are mounting from many corners. Economic slowdowns are evident in pockets of the global economy. From nations like China, currently undergoing a real estate and debt crisis – to industries suffering from demand destruction, like office real estate – or labor actions, like the automakers and Hollywood, a contraction may be in order. On the other hand, labor markets remain tight and there are counter recessionary forces ‘out there’ too, like wage inflation and government spending.  

 

We will keep you posted if and when we have all the answers, but please don’t hold your breath. Until then, there are things within your control that can help make your life more efficient by potentially saving on taxes and creating opportunities to enhance your family’s wealth, no matter what the markets do. Here is a partial list of year-end planning considerations that we recommend you consider and discuss with us (and your accountants) to see which you may benefit from. Starting with: 

 

Annual exclusion gifts – You can give any person $17,000 per year, tax-free. That’s $34,000 for a married couple. This money can be given to minor children and grandchildren through UTMA/custodial accounts, a trust, or a 529 plan, if the money will be used for education someday. 529 plans come with additional benefits like tax-free growth and in some cases, state income tax deductions for contributions.  

 

Charitable gifts – gifts of appreciated stock or cash can be deducted from itemized tax returns. Appreciated stock has the benefit of not triggering capital gains and saving on that amount as well. QCDs, or qualified charitable distributions, from IRA accounts, are an attractive option for those with required minimum distribution obligations. ‘Donor advised funds’ enable you to secure a deduction in the current year and let you decide when and what non-profit receives it another time in the future.  

 

Retirement plans and benefits - there is still time to establish a retirement plan for 2023 if you are self-employed. If you are employed by a company that has a 401(k), 403(b) or other salary deferral type of plan, there is still time to maximize your contributions and lower your tax bill this year. Further, if you are employed by a large company, call us before making your benefit elections for 2024 to see if there are options to improve or enhance your corporate perks.  
 
Roth IRA conversions – In certain situations, converting some of your IRA to a Roth IRA (*by paying the tax due) may be an attractive option. If you are having a ‘lower’ income year for any reason, then a conversion may make more sense before year-end, amongst other considerations.  

 

Estate planning, wills, and beneficiaries – Did anything change in your life this year? Such as a birth, death, marriage, or divorce? If so, does your estate plan need any updates including beneficiary designations on retirement plans and life insurance policies?  

 

Tax loss harvesting – For accounts under our discretion, we will proactively take opportunities to recognize losses that exist in your portfolios in taxable accounts if available.

 

Review your insurance coverage – Ensure that you have the proper insurance policies around your life. If you haven’t assessed whether you are adequately insured in a while, then this time of year is good to double check yourself.  

 

If you have any questions or want to review any or all of the above, please contact our office and schedule a call or meeting. We delight in bringing you additional peace of mind!

 

 

Regards,

Scott Lasky, CFP™

 

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1. Average 30-year fixed rate mortgage interest rate, September, 2000. Source: St. Louis Federal Reserve Economic Data

 

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All statements are opinions and should not be construed as facts. This newsletter is for informational purposes only and should not be deemed as a solicitation to invest, or increase investments in Lionshead Wealth Management products or affiliated products. Information provided is for educational purposes. Your advisor does not provide tax, legal, or accounting advice. In considering this material, you should discuss your individual circumstances with professionals in those areas before making any decisions. Further, your advisor makes no warranties with regard to such information or a result obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Lionshead Wealth Management, LLC is an investment adviser in New York. Lionshead Wealth Management, LLC is registered with the Securities and Exchange Commission (SEC).  Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission.  Lionshead Wealth Management only transacts business in states in which it is properly registered or is excluded or exempted from registration.  A copy of Lionshead Wealth Management 's current written disclosure brochure filed with the SEC which discusses among other things, Lionshead Wealth Management's business practices, services and fees, is available through the SEC's website at: www.adviserinfo.sec.gov. Past performance is not an indication of future results. Please note, the information provided in this document is for informational purposes only and investors should determine for themselves whether a particular service or product is suitable for their investment needs. Please refer to the disclosure and offering documents for further information concerning specific products or services. Nothing provided in this document constitutes tax advice. Individuals should seek the advice of their own tax advisor for specific information regarding tax consequences of investments. Investments in securities entail risk and are not suitable for all investors. This is not a recommendation nor an offer to sell (or solicitation of an offer to buy) securities in the United States or in any other jurisdiction. This document may contain forward-looking statements relating to the objectives, opportunities, and the future performance of the U.S. market generally. Forward-looking statements may be identified by the use of such words as; “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated,” “potential” and other similar terms. Examples of forward-looking statements include, but are not limited to, estimates with respect to financial condition, results of operations, and success or lack of success of any particular investment strategy. All are subject to various factors, including, but not limited to general and local economic conditions, changing levels of competition within certain industries and markets, changes in interest rates, changes in legislation or regulation, and other economic, competitive, governmental, regulatory and technological factors affecting a portfolio's operations that could cause actual results to differ materially from projected results. Such statements are forward-looking in nature and involve a number of known and unknown risks, uncertainties and other factors, and accordingly, actual results may differ materially from those reflected or contemplated in such forward-looking statements. Prospective investors are cautioned not to place undue reliance on any forward-looking statements or examples. None of Lionshead Wealth Management or any of its affiliates or principals nor any other individual or entity assumes any obligation to update any forward-looking statements as a result of new information, subsequent events or any other circumstances. All statements made herein speak only as of the date that they were made.

 All statements are opinions and should not be construed as facts. This newsletter is for informational purposes only and should not be deemed as a solicitation to invest, or increase investments in Lionshead Wealth Management products or affiliated products. Information provided is for educational purposes. Your advisor does not provide tax, legal, or accounting advice. In considering this material, you should discuss your individual circumstances with professionals in those areas before making any decisions. Further, your advisor makes no warranties with regard to such information or a result obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information.S&P 500® Index: is an unmanaged index of 500 common stocks primarily traded on the New York Stock Exchange, weighted by market capitalization. Index performance includes the reinvestment of dividends and capital gains.