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NOVEMBER 2023
LET'S NAVIGATE TO YOUR GOALS
END OF YEAR FINANCIAL CHECKLIST Complete All Necessary Required Minimum Distributions
review current emergency fund and life insurance
forecast tax consequences
assess charitable giving
create new year financial goals review with your financial advisor if you have questions about how to tackle your checklist Issue 27 | 234
Editor's Note Over thirty years ago, we opened this firm with the hope that we would help change lives. Over 1000 families and 35 states later, I would say we've done an excellent job.
This month, we're diving deeper into your bucket list. With the beginning of Summer, we see an increase in spending for travel. We hope you enjoy our guidance on ways to work towards your bucket list.
Regardless of what stage of the financial life cycle you find yourself, we've seen it and navigated through it for countless others. Our team prides ourselves on our all encompassing approach and our commitment to knowing you...not just your investment statement.
CHRIS MAVRAKOS, CFP® SECURITIES OFFERED THROUGH LPL FINANCIAL, MEMBER FINRA/SIPC. INVESTMENT ADVICE OFFERED THROUGH MFP FINANCIAL SERVICES INC., A REGISTERED INVESTMENT ADVISOR AND SEPARATE ENTITY FROM LPL FINANCIAL
New Retirement Contribution Limits For 2023 THE INTERNAL REVENUE SERVICE (IRS) HAS RELEASED NEW LIMITS FOR CERTAIN RETIREMENT ACCOUNTS FOR THE COMING YEAR. AFTER MONTHS OF HIGH INFLATION AND FINANCIAL UNCERTAINTY, SOME OF THESE COST-OF-LIVING-BASED ADJUSTMENTS HAVE REACHED NEARRECORD LEVELS.
INDIVIDUAL RETIREMENT ACCOUNTS (IRAS)
KEEP IN MIND THAT THIS UPDATE IS FOR INFORMATIONAL PURPOSES ONLY, SO PLEASE CONSULT WITH AN ACCOUNTING OR TAX PROFESSIONAL BEFORE MAKING ANY CHANGES TO YOUR 2023 TAX STRATEGY. YOU CAN ALSO CONTACT YOUR FINANCIAL PROFESSIONAL, WHO MAY BE ABLE TO PROVIDE YOU WITH INFORMATION ABOUT THE PENDING CHANGES.
REMEMBER, ONCE YOU REACH AGE 73, YOU MUST BEGIN TAKING REQUIRED MINIMUM DISTRIBUTIONS FROM A TRADITIONAL IRA IN MOST CIRCUMSTANCES. WITHDRAWALS ARE TAXED AS ORDINARY INCOME AND, IF TAKEN BEFORE AGE 59½, MAY BE SUBJECT TO A 10% FEDERAL INCOME TAX PENALTY. ROTH IRAS
TRADITIONAL IRA CONTRIBUTION LIMITS ARE UP $500 IN 2023 TO $6,500. CATCH-UP CONTRIBUTIONS FOR THOSE OVER AGE 50 REMAIN AT $1,000, BRINGING THE TOTAL LIMIT TO $7,500.
THE INCOME PHASE-OUT RANGE FOR ROTH IRA CONTRIBUTIONS INCREASES TO $138,000-$153,000 FOR SINGLE FILERS AND HEADS OF HOUSEHOLD, A $9,000 INCREASE. FOR MARRIED COUPLES FILING JOINTLY, PHASE-OUT WILL BE $218,000 TO $228,000, A $14,000 INCREASE. MARRIED INDIVIDUALS FILING SEPARATELY SEE THEIR PHASE-OUT RANGE REMAIN AT $0-10,000. TO QUALIFY FOR THE TAX-FREE AND PENALTY-FREE WITHDRAWAL OF EARNINGS, ROTH 401(K) DISTRIBUTIONS MUST MEET A FIVE-YEAR HOLDING REQUIREMENT AND OCCUR AFTER AGE 59½. TAX-FREE AND PENALTY-FREE WITHDRAWAL CAN ALSO BE TAKEN UNDER CERTAIN OTHER CIRCUMSTANCES, SUCH AS THE OWNER'S DEATH. WORKPLACE RETIREMENT ACCOUNTS THOSE WITH 401(K), 403(B), 457 PLANS, AND SIMILAR ACCOUNTS WILL SEE A $2,000 INCREASE FOR 2023, THE LIMIT RISING TO $22,500. THOSE AGED 50 AND OLDER WILL NOW HAVE THE ABILITY TO CONTRIBUTE AN EXTRA $7,500, BRINGING THEIR TOTAL LIMIT TO $30,000. ONCE YOU REACH AGE 73 YOU MUST BEGIN TAKING REQUIRED MINIMUM DISTRIBUTIONS FROM YOUR 401(K) OR OTHER DEFINED-CONTRIBUTION PLANS IN MOST CIRCUMSTANCES. WITHDRAWALS ARE TAXED AS ORDINARY INCOME AND, IF TAKEN BEFORE AGE 59½, MAY BE SUBJECT TO A 10% FEDERAL INCOME TAX PENALTY. SIMPLE ACCOUNTS A $1,500 INCREASE IN LIMITS FOR 2023 GIVES INDIVIDUALS CONTRIBUTING TO THIS INCENTIVE MATCH PLAN A $15,500 STOP LIGHT. MUCH LIKE A TRADITIONAL IRA, ONCE YOU REACH AGE 73, YOU MUST BEGIN TAKING REQUIRED MINIMUM DISTRIBUTIONS FROM A SIMPLE ACCOUNT IN MOST CIRCUMSTANCES. WITHDRAWALS ARE TAXED AS ORDINARY INCOME AND, IF TAKEN BEFORE AGE 59½, MAY BE SUBJECT TO A 10% FEDERAL INCOME TAX PENALTY. AS A REMINDER, THIS ARTICLE IS FOR INFORMATIONAL PURPOSES ONLY. CONSULT WITH AN ACCOUNTING OR TAX PROFESSIONAL BEFORE MAKING ANY CHANGES TO YOUR 2023 TAX STRATEGY. THE CONTENT IS DEVELOPED FROM SOURCES BELIEVED TO BE PROVIDING ACCURATE INFORMATION. THE INFORMATION IN THIS MATERIAL IS NOT INTENDED AS TAX OR LEGAL ADVICE. IT MAY NOT BE USED FOR THE PURPOSE OF AVOIDING ANY FEDERAL TAX PENALTIES. PLEASE CONSULT LEGAL OR TAX PROFESSIONALS FOR SPECIFIC INFORMATION REGARDING YOUR INDIVIDUAL SITUATION. THIS MATERIAL WAS DEVELOPED AND PRODUCED BY FMG SUITE TO PROVIDE INFORMATION ON A TOPIC THAT MAY BE OF INTEREST. FMG, LLC, IS NOT AFFILIATED WITH THE NAMED BROKER-DEALER, STATE- OR SEC-REGISTERED INVESTMENT ADVISORY FIRM. THE OPINIONS EXPRESSED AND MATERIAL PROVIDED ARE FOR GENERAL INFORMATION, AND SHOULD NOT BE CONSIDERED A SOLICITATION FOR THE PURCHASE OR SALE OF ANY SECURITY. COPYRIGHT FMG SUITE.
A Bucket Plan To Go With Your Bucket List JOHN AND MARY ARE NEARING RETIREMENT AND THEY HAVE A LOT OF ITEMS ON THEIR BUCKET LIST. LONGER LIFE EXPECTANCIES MEAN JOHN AND MARY MAY NEED TO PREPARE FOR TWO OR EVEN THREE DECADES OF RETIREMENT.
HOW SHOULD THEY POSITION THEIR MONEY? ONE APPROACH IS TO SEGMENT YOUR EXPENSES INTO THREE BUCKETS:
• BASIC LIVING EXPENSES— FOOD, RENT, UTILITIES, ETC. • DISCRETIONARY SPENDING — VACATIONS, DINING OUT, ETC. • LEGACY ASSETS — FOR HEIRS AND CHARITIES NEXT, PAIR APPROPRIATE INVESTMENTS TO EACH BUCKET. FOR INSTANCE, SOCIAL SECURITY MIGHT BE ASSIGNED TO THE BASIC LIVING EXPENSES BUCKET. FOR THE DISCRETIONARY SPENDING BUCKET, YOU MIGHT CONSIDER INVESTMENTS THAT PAY A STEADY DIVIDEND AND THAT ALSO OFFER THE POTENTIAL FOR GROWTH. FINALLY, LIST THE LEGACY ASSETS THAT YOU EXPECT TO PASS ON TO YOUR HEIRS AND CHARITIES.
A Bucket Plan To Go With Your Bucket List A BUCKET PLAN CAN HELP YOU BE BETTER PREPARED FOR A COMFORTABLE RETIREMENT.
CALL TODAY AND WE CAN DEVELOP A STRATEGY THAT MAY HELP YOU PUT ENOUGH MONEY IN YOUR BUCKETS TO COMPLETE ALL THE ITEMS ON YOUR BUCKET LIST.
1. JOHN AND MARY ARE A HYPOTHETICAL COUPLE USED FOR ILLUSTRATIVE PURPOSES ONLY. DIVERSIFICATION IS AN APPROACH TO HELP MANAGE INVESTMENT RISK. IT DOES NOT ELIMINATE THE RISK OF LOSS IF SECURITY PRICES DECLINE. 2. SOCIAL SECURITY BENEFITS MAY PLAY A MORE LIMITED ROLE IN THE FUTURE AND SOME FINANCIAL PROFESSIONAL RECOMMEND CREATING A RETIREMENT INCOME STRATEGY THAT EXCLUDES SOCIAL SECURITY PAYMENTS. 3. A COMPANY’S BOARD OF DIRECTORS CAN STOP, DECREASE OR INCREASE THE DIVIDEND PAYOUT AT ANY TIME. INVESTMENTS OFFERING A HIGHER DIVIDEND MAY INVOLVE A HIGHER DEGREE OF RISK. KEEP IN MIND THAT THE RETURN AND PRINCIPAL VALUE OF STOCK PRICES WILL FLUCTUATE AS MARKET CONDITIONS CHANGE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THE CONTENT IS DEVELOPED FROM SOURCES BELIEVED TO BE PROVIDING ACCURATE INFORMATION. THE INFORMATION IN THIS MATERIAL IS NOT INTENDED AS TAX OR LEGAL ADVICE. IT MAY NOT BE USED FOR THE PURPOSE OF AVOIDING ANY FEDERAL TAX PENALTIES. PLEASE CONSULT LEGAL OR TAX PROFESSIONALS FOR SPECIFIC INFORMATION REGARDING YOUR INDIVIDUAL SITUATION. THIS MATERIAL WAS DEVELOPED AND PRODUCED BY FMG SUITE TO PROVIDE INFORMATION ON A TOPIC THAT MAY BE OF INTEREST. FMG SUITE IS NOT AFFILIATED WITH THE NAMED BROKER-DEALER, STATE- OR SEC-REGISTERED INVESTMENT ADVISORY FIRM. THE OPINIONS EXPRESSED AND MATERIAL PROVIDED ARE FOR GENERAL INFORMATION, AND SHOULD NOT BE CONSIDERED A SOLICITATION FOR THE PURCHASE OR SALE OF ANY SECURITY. COPYRIGHT FMG SUITE.
REQUIRED MINIMUM DISTRIBUTIONS WHAT YOU NEED TO KNOW
A Required Minimum Distribution (RMD) is a mandatory annual withdrawal that individuals must make from their employer-sponsored retirement plans, traditional IRAs, SEPs, or SIMPLE IRAs once they reach retirement age. The specific RMD amount is calculated by dividing the prior year-end fair market value of the retirement account by a life expectancy factor provided by the IRS. When the owner of an IRA passes away, the chosen beneficiary becomes subject to RMD rules. A beneficiary, in this context, refers to any person or entity designated by the account owner to receive the benefits of the retirement account or IRA after their demise. The RMD requirements for beneficiaries depend on the timing of the account owner's passing. The age at which an individual must begin taking their RMDs varies based on their birth year. Those born between 1951 and 1959 must initiate RMDs after reaching age 73, while those born in 1960 or later can postpone it until age 75. However, it's important to note that the SECURE 2.0 Act, enacted in December 2022, altered the RMD rules, pushing the initial RMD age to 73 starting in 2023 and further increasing it to 75 by 2033.
REQUIRED MINIMUM DISTRIBUTIONS WHAT YOU NEED TO KNOW
Charitable Contributions: Making charitable donations with all or part of your RMD can be a taxefficient way to support a cause. A Qualified Charitable Distribution (QCD) involves a direct transfer of funds from your IRA custodian to a qualified charity of your choice. The QCD amount is excluded from your taxable income, which can reduce your overall tax liability. Ease of Distribution: We are pleased to offer assistance in setting up automatic disbursements if you haven't already done so. This eliminates the need to remember to take your RMD each year. You can opt to have your distribution deposited directly into your bank account on a monthly, quarterly, semi-annual, or annual basis, or we can mail you a check. Please don't hesitate to reach out if you require assistance in this regard. Penalties: Failure to adhere to RMD requirements can result in a substantial 50% excise tax penalty, underscoring the importance of compliance with these regulations. Please contact our office if you have any questions, we are always here to assist you.
The Missing Piece LIFE IS UNPREDICTABLE. HOWEVER... WE CAN TAKE PROACTIVE STEPS TO PROTECT OUR FAMILIES FROM THE UNEXPECTED. HAVING A LIFE INSURANCE POLICY IS A POWERFUL TOOL DESIGNED TO ENSURE THAT YOUR LOVED ONES ARE FINANCIALLY SECURE IN THE EVENT OF YOUR UNTIMELY PASSING. THE DEATH BENEFIT PAID OUT BY THE INSURANCE COMPANY CAN HELP COVER ESSENTIAL EXPENSES SUCH AS MORTGAGE PAYMENTS, EDUCATIONAL COSTS, AND DAILY LIVING EXPENSES. LIFE INSURANCE CAN HELP PAY OFF OUTSTANDING DEBTS AND LOANS, PREVENTING YOUR FAMILY FROM BEING BURDENED WITH FINANCIAL LIABILITIES AFTER YOUR PASSING. THIS INCLUDES MORTGAGES, CAR LOANS, CREDIT CARD DEBT, AND PERSONAL LOANS. BY ENSURING THESE DEBTS ARE COVERED, YOUR LOVED ONES WON'T HAVE TO WORRY ABOUT LOSING THEIR ASSETS OR FACING FINANCIAL STRAIN. IT ENSURES THAT YOUR LOVED ONES CAN MAINTAIN THEIR QUALITY OF LIFE EVEN WHEN YOU'RE NO LONGER THERE TO HELP PROVIDE FOR THEM. TERM LIFE POLICIES ARE DESIGNED TO FIT YOUR BUDGET WHILE PROVIDING THE COVERAGE YOUR FAMILY NEEDS. YOU CAN CHOOSE A COVERAGE AMOUNT THAT ALIGNS WITH YOUR FINANCIAL GOALS, HAVING THE FLEXIBILITY TO SELECT THE POLICY TERM THAT SUITS YOUR NEEDS, WHETHER IT'S 10, 20, OR 30 YEARS, AND THERE IS NOW A SIMPLIFIED ONLINE ISSUE OPTION, WHICH MEANS YOU MAY NOT NEED A MEDICAL EXAM TO QUALIFY FOR COVERAGE. WE'D BE HAPPY TO DISCUSS YOUR SPECIFIC NEEDS AND PROVIDE YOU WITH A PERSONALIZED QUOTE TAILORED TO YOUR CIRCUMSTANCES.
END
OF
YEAR
SOCIAL EVENTS
Third Friday October Celebration October 20th 6:00-7:30pm Join us for appetizers and drinks before heading out to Safety Harbor’s monthly Third Friday Celebration!
Third Friday November Celebration November 17th 6:00-7:30pm
Virtual Town Hall: End of Year Market Outlook November 29th 1:00pm-2:00pm
Third Friday December Celebration December 15th 6:00-7:30pm
End of Year Client Appreciation Event December 6th 4:30pm-7:30pm THANK YOU for another year entrusting us with your finances. For all of our out-ofstate clients, please be on the lookout for a “miss you” gift from us!
PRSRT STD US Postage PAID Hammond, LA Permit No. 60
We Can't Direct The Wind, But We Can Adjust Our Sails