The Low Down on Retirement Accounts 2024

Hello from Sycamore,

If you are 73 or older and haven’t taken your Required Minimum Distribution (RMD) for the 2024 tax year, you will likely need to by year’s end.

What is an RMD?

An RMD is the minimum distribution you must withdraw from your retirement account each year.

When do I have to begin taking RMDs?

You must begin taking your RMDs on April 1st of the year following the calendar year in which you reach age 73. What does this mean?

  1. Example: Your 73rd birthday was anytime in 2023. As long as you will reach age 73 by December 31, 2023, you must take your first RMD (for 2023) by April 1, 2024.

Then each year after this you must take your RMD by December 31 of that year.

Can I take more than my RMD amount?

You can withdraw more than the minimum amount required. The total amount you withdraw will be included in your taxable income.

Can I take withdrawals before 73?

Yes. Once you reach 59 ½ you may take withdrawals with no early withdrawal penalty. You will still be responsible for regular income tax on the complete amount withdrawn.

You may also withdraw funds prior to age 59 ½ however, you will likely need to pay an extra 10% early withdrawal penalty in addition to the regular income tax.

Highlights for 2024

Retirement Savings Plan Contribution Limits have changed.

  1. 401(k), 403(b), 457 plans, and federal government Thrift Savings Plan contribution limits are $23,000.
    1. Catch-up contributions for those over age 50 are $7,500.
  2. IRA contribution limits increase to $7,000.
    1. Catch-up contributions for those over age 50 are $1,000.
  3. SIMPLE IRA contribution limits $16,000.
    1. Catch-up contributions for those over age 50 are $3,500.

As always, do not hesitate to reach out to our offices at (765) 455-1554 to discuss this.

Thank you for your continued trust and support,

Sycamore Financial Group

*Past performance does not assure future results. Investors cannot invest directly in the stock market indexes such as the S&P 500. Investment return and principal value of an investment will fluctuate. Investor value, when sold may be worth more or less than their original cost.

By |2024-05-09T03:39:54-04:00May 9th, 2024|2004 Newsletters|0 Comments

Performance, Markets and The Economy

Hello from Sycamore,

Performance and the Markets

Our Growth and Income Composite gained just a bit less than 0.5% over the past year (gross of all fees). This is significantly better than the -7.7% by the S&P 500. Historically our strength has been to hold value better during market declines and it seems to be true again during this market cycle. We still expect the markets to do reasonably well in 2023. We know that there is a lot of concern about a pending recession, but we’ve now been hearing that for more than a year and we’ve not seen it yet.

As you already know, we do our own research and analysis to make security selections rather than send your money to a 3rd party manager or mutual fund to be managed. This means that we are ‘in the weeds’ each-and-every week. Currently, we see most companies growing earnings at a rate we’d normally expect. Of course, there are exceptions, but on the whole, we are still finding many bargains and we’re looking forward to an uneventful 2023.

The Economy

One of the primary reasons that we are in a higher interest rate environment is inflation. It continues to be a problem and the Federal Reserve is continuing to raise interest rates – although the rate of increase seems to be slowing and we believe we are near the top for now. Producer prices continue to drop, and we’ve found that the Consumer Price Index tends to follow. We’re hopeful that inflation will ease significantly this year. Also, the amount of money in our economy (M-2) is now shrinking. We believe that this will slow the inflation rate. Many economic indicators are performing well. Retail sales continue to be strong, and the consumer is a very large part of our economy. The unemployment rate remains at near record lows and our economy continues to create new jobs at a very good rate. New orders for durable goods are strong and even sales of existing homes and new starts are staging a nice recovery. We remain optimistic overall, and we believe that most companies can operate profitably in our current economic environment.

Purchase and Sale Activity During Q-1

During the 1st quarter of 2023, we bought Generac (GNRC), Paychecks (PAYX), IBM, ASGN, and ADP. We sold Sally Beauty (SBH).

As always, do not hesitate to reach out to our offices at (765) 455-1554 to discuss this.

Thank you for your continued trust and support,

Sycamore Financial Group

*Data not audited
*Results reported gross fees
**Past performance does not assure future results. Investors cannot invest directly in the stock market indexes such as the S&P 500. Investment return and principal value of an investment will fluctuate. Investor value, when sold may be worth more or less than their original cost.

By |2023-04-26T22:13:02-04:00April 26th, 2023|2023 Newsletters|0 Comments

Mutual Funds Inquiry – Winter 2003

Hello from Sycamore,

As you already know, trading procedures in the mutual fund industry are being reviewed. We thought you may want to know our position on this issue. We are not the final authority on this subject and these are simply our thoughts.

Mutual fund investigations have focused on two areas of trading: late trading and market timing. Late trading, which is illegal, refers to the activity of placing a buy or sell order of a mutual fund after the market closes (4:00 p.m. eastern time) and still receiving that day’s price per share. Late trading benefits investors by allowing them to trade on news that occurred after the end of the trading day at prices not available to other shareholders. Market timing refers to frequent moves in and out of the market. Market timing is legal. The complaint is that market timing, in certain situations, is “inappropriate” and could harm other investors (most of you know that we do not believe that market timing works).

It is our understanding that the top 80 mutual fund companies have been asked to provide the SEC and other regulatory bodies with information regarding their trading practices, so don’t be surprised if you recognize a name in the news. Highly publicized names like Putnam and Strong are not accused of the illegal activity of late trading, but of insufficient oversight in the gray area of market timing.

Is there anything that you should do?

First, we caution investors not to get swept up in the media storm. If you purchased funds from a mutual fund company criticized in the news, remember you own the stocks and/or bonds mutually owned by the fund shareholders; you do not own the stock of the company being criticized. Therefore, if any values go down due to this short term crisis, it will be the stock of the managing company, not the securities of the companies they have purchased for you.

Second, projected and estimated losses reported in the newspapers might sound large because they are talking about one cumulative number; however, if losses exist, the number would be relatively small for any individual investor. According to Stanford University finance professor Eric Zitzewitz, any losses are likely to add up to 1% or less in lost returns in a given year ($10 or less for each $1,000 invested.) (Wall Street Journal 11/4/2003) An article in the December issue of Forbes put it this way “ Putnam is the nations fifth largest fund family, with $146 billion In fund assets, according to Lipper. The reported $700,000 in improper trading profits several of it’s traders made amounts to a 20th of a basis point, or 48 cents per $100,000.” At this time, it is not clear what losses will be and any estimates are purely speculative.

Third, Stay focused on what is important. Negative, sensational reporting of this problem sells magazines and newspapers but it is not intended to help you earn more on your investment portfolio. Dalbar, Inc. reported in a 2001 study that for the period from January 1984 through December 2000 “the average equity fund investor realized an annualized return of 5.32% compared to 16.29% for the S&P 500 Index”. The reason for the stark difference in returns is that many investors jump in and out rather than remaining invested. We feel at this time, the best course of action is to monitor the situation but stay the course with your current investments.

As the “Dean of International investing”, Sir John Templeton, has frequently reminded us, “Investing is risky for many reasons and the possibility of corporate malfeasance or impropriety is one of them, but…the opportunities are still great”.

Thanks for your business and trust,

Sycamore Financial Group

_________________

Past performance does not assure future results. Investors cannot invest directly in the stock market indexes such as the S&P 500. Invest return and principal value of an investment will fluctuate. Investor value, when sold, may be worth more or less than their original cost. The material in this presentation is for illustrative purposes and does not reflect any particular investment.

By |2020-01-13T08:19:34-05:00November 15th, 2003|2004 Newsletters|0 Comments
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