Blog

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                    [post_content] => Tom Fridrich, JD, CLUⓇ, ChFCⓇ, Senior Wealth Planner 

The end of the year offers an ideal opportunity to look both forward and back — reflecting on recent achievements, while setting goals for the upcoming months. For many of my clients, it's also a time to review their finances and identify moves that can help protect their tax bills. 

If you've had a particularly high-income year, you might be feeling especially confident about your finances, and yet facing the upcoming tax liability may come as a shock. Fortunately, there are several strategies that can combine two common money-related goals — reducing your tax burden while contributing to charity. 
What Is a “High-Income" Year?
When we talk about a high-income year, we're not referring just to a hefty raise from a promotion or a job change (although that is commendable and likely should invite some financial planning of its own). Here, we're talking about an unusual, often one-time spike in your income. 

For example, you might have finalized the sale of your business and received a sizable one-time cash payment, rather than an installment payment over several years. Or maybe you sold property at the height of the market and realized an appreciation that exceeded the capital gains exemption or wasn't eligible for it. Or, you might have received an extraordinarily large bonus or want to exercise stock options that have recently vested. 
What Are the Tax Consequences of an Income Spike?
Obviously, most people appreciate that the higher their income, the higher the tax bill. And with ordinary income that is typically expected. 

However, if you've been affected by one of these significant events, it can be painful to pay the extra taxes, especially when you recognize that this money flowing into your account is not an ongoing event. 

Furthermore, while direct taxes are one thing, it might also trigger indirect consequences. A high-income year could mean you phase out of income credits that are necessary for your day-to-day life. Or it may make you ineligible for the Biden-Harris Administration's Student Debt Relief Plan, which is targeted only to those at a certain income threshold that you would otherwise qualify for. 

If you're on Medicare, a high-earning year can increase your health insurance costs and make you subject to what we call “Dear Aunt IRMAA," which stands for “income-related monthly adjusted amount" and results in a surcharge in your Part B and Part D premiums. 
What Are the Benefits of Giving to Charity in a High-Income Year? 
Simultaneously, many people realize this windfall offers the chance to make a philanthropic donation in a way they've been unable to previously. Perhaps you've made smaller donations throughout the year or have tithed faithfully to a religious organization, but never felt as though you were in the position to make a more substantial gift — until now. 

Thanks to this financial event, you can now make a bigger impact, while also reaping tax advantages. 
What Are Some Ways You Can Give to Charity in this High-Income Year? 
While you obviously could always make a direct cash gift to the organization of your choice, there are some other vehicles that might offer additional benefits. Here are three to consider: 

 	
 Donor-advised fund (DAF)

With a DAF, you make a charitable contribution to a fund that is held in a custodial account. While you make the donation and receive the tax deduction for the entire sum today, you don't have to select the end charities or how you want to allocate your funds. The money can sit in the DAF until you've determined where and at what pace you'd like to donate. Since the assets can still be invested, they may continue to grow for an even bigger impact. 

A DAF is appealing because rather than making an immediate generous contribution to a group, you have the latitude to do more research or give a smaller amount and evaluate how the organization uses its money. I also see clients using it as a way to introduce their children to a philanthropic mindset by inviting them to be part of an annual conversation about where they'd like to donate. 

You also can donate assets other than cash to a DAF, which makes them favorable for clients who have realized large stock gains. For example, if they purchased a portfolio for $10,000 that's now worth $100,000, they can donate the appreciated portfolio and avoid capital gains, while getting the deduction for the entire fair market value of $100,000. 

 	
 Qualified charitable distribution (QCD)

Clients who do not need the Required Minimum Distributions (RMD) from their 401(k) or individual retirement account (IRA) can donate it to charity and get the tax benefit as a QCD. This is especially useful for clients who take the standard deduction rather than itemizing, which would mean they otherwise wouldn't get tax relief. 

While it might be too late to deploy this strategy this year, it's something to consider for 2023. Because your RMD is based on your account value as of December 31 of the prior year, we can come close to predicting what your future RMD will be and begin to plan the right strategies, including potentially donating it to avoid unexpected taxes. 

 	
 Charitable gift annuity

If you want to make a considerable donation now, but would benefit from receiving future income, you could look into a charitable gift annuity. This is a contract between you and the charity where you make a bequest, which provides a tax deduction, and then you also receive a stream of income from the charity. In return, the charity receives the asset up front and can use it immediately. However, not all nonprofits will accept this type of gift because it can be more involved to set up a payment stream. You can visit the American Council on Gift Annuities to find out more about how charitable gift annuities work and search for member organizations by name, type or geographic location. 

With a charitable gift annuity, you claim taxes for the amount, minus the value of the payments that will eventually be made. So if you donate $30,000 with the expectation that $20,000 is the donation and the remaining $10,000 will be returned in payments, you would deduct the $20,000. 
Professional Advice Can Help You Make the Right Moves
While reducing your tax bill by donating to charity is an admirable act and often a wise financial strategy, always talk to a financial advisor before making any decisions. Since every person's situation is different, they can help you assess the tax risks and advantages and discuss options that align with your current financial position and goals. 

 

Tom Fridrich is not affiliated with Cetera Advisor Networks LLC. 

Generally, a donor advised fund is a separately identified fund or account that is maintained and operated by a section 501(c)(3) organization, which is called a sponsoring organization. Each account is composed of contributions made by individual donors. Once the donor makes the contribution, the organization has legal control over it. However, the donor, or the donor's representative, retains advisory privileges with respect to the distribution of funds and the investment of assets in the account. Donors take a tax deduction for all contributions at the time they are made, even though the money may not be dispersed to a charity until much later. 

For a comprehensive review of your personal situation, always consult with a tax or legal advisor.  Neither Cetera Advisor Networks LLC nor any of its representatives may give legal or tax advice. 
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                    [post_content] => This week was midterm elections and we’ve had many questions about what it all could mean, which we’ll tackle in today’s blog. We consider it a great honor to vote, and while we may not know the final results of the election for days (or even months), what we do know is the election will probably impact the market.

2022 was one of the worst starts to a year ever for stocks, but we remain hopeful that a major low took place in the middle of October, which would be fairly normal given October’s propensity for being a bear market killer.

One of our favorite tables we’ve shared this year is right here. The first few quarters of a midterm year tend to be quite weak when looking at a 4-year presidential cycle, which played out all too well this year. The really good news is some of the best quarters are upon us, so don’t lose faith quite yet.


The Calendar Is a Tailwind
The average midterm year since 1950 corrected 17.1% on average, the most out of the four-year presidential cycle. That’s the bad news, the good news is stocks gained 32.3% on average a year off those lows and have never been lower. Although we don’t know if October 12 is officially the lows or not (but we think it very well could be), there could be a lot of opportunity for bulls over the coming year.



Here’s another look at the same thing, but breaking it down by each year.



Should we be surprised that stocks have had a tough go so far in 2022? Maybe not, as this next chart shows the worst time for stocks is a midterm year under a new President. With the S&P 500 up only 2.4% on average these years, it helps put the disappointing year so far into perspective. Now check out what happens the following year, which might be something many investors could be smiling about soon enough.



One of the most well-known investor axioms is “Sell in May and Go Away,” as those six months are some of the worst of the year. It played out this year, but what we don’t hear nearly as much about is how well stocks tend to do from November through April. Sure enough, looking at those six months during a midterm year and we find that stocks have been higher the past 18 times.


Election Aftermath
You might hear that certain sectors will do well if so-and-so wins, or that these sectors will do poorly if this-or-that happens. The truth is no one really knows. After President Trump won in 2016 it was widely assumed coal and steel would do great, the opposite happened. Then under President Biden green energy was to do great and dirty crude and coal would struggle – but, again, the opposite happened. It just isn’t clear cut.

What is clear cut is stocks historically have done quite well the year after the midterms. As you can see in our last chart, the S&P 500 gained a year after the election every single time since World War II, with a very solid 14.1% average gain over that year. Why is this? Likely markets hate uncertainty and there is a lot of that leading up to a midterm election. But once the election is over the uncertainty is likely lifted.


                    [post_title] => Let’s Talk About Midterm Elections and Your Investments
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                    [post_content] => Kevin Oleszewski, Senior Wealth Planner

‘Tis the season to give. In fact, 37% of charitable giving occurs during the last quarter of the year — 20% of it in December alone, according to a survey conducted by the Blackbaud Institute. And while the holidays are traditionally a time to reflect on our blessings and help those less fortunate than ourselves, there's another factor influencing the timing of these donations — and that's the goal of minimizing a tax bill.

Of course, any charitable donation should be driven by altruism and the desire to make a difference. The great news is that we're a generous society. Despite the uncertainty of the past few years, giving from individual donors remains on the rise. The Blackbaud Institute survey found giving increased 9% in 2021 over 2020, with overall giving rising 19% since 2019.

However, there's nothing wrong with embracing the opportunity to help your own finances while helping others. While most donors give the conventional way, via a direct cash gift, there are other less traditional but impactful ways to give that can also provide a boost to your tax strategy.
Three Tax-Advantaged Donation Strategies to Consider
1. Create a donor-advised fund (DAF)
A DAF is an excellent way to achieve an immediate tax deduction without feeling obligated to give an entire gift at once. With a DAF, you contribute assets — cash, real estate, stock, even cryptocurrency — to a fund you establish through a custodial account, which then becomes a charitable account you personally control. Once open, you can start making gifts right away or you can leave the money in there indefinitely, potentially taking advantage of growth as you determine how you want to spend it.

The entire amount of your initial donation to the DAF is deducted the year you establish it, even if you've yet to choose a charity. That makes it a savvy way to offset sky-high taxes you otherwise might owe in a year when you have a particularly high level of income.

Here's an example: Let's say you intend to gift $10,000 a year over four years. You can put $40,000 into the DAF today and get the entire deduction, yet still maintain your regular schedule of making a $10,000 gift each year.

This strategy also can protect you and your money in case the charity changes policies or otherwise aligns with activities or positions you disagree with. Although the gift to the DAF is irrevocable, you can redirect the remaining funds to other causes whenever you wish.
2. Use a qualified charitable distribution (QCD) from your individual retirement account (IRA).
If you are age 70 ½ or older, you can transfer money from your IRA to a charity as a qualified charitable distribution (QCD), which makes it tax-free up to $100,000 ($200,000 if you file jointly). That can be particularly handy for those who have to make Required Minimum Distributions (RMD), which is the minimum amount of money you must withdraw by law from any tax-deferred account, like an IRA or 401(k), starting at age 72. Reducing your IRA through charitable donations also reduces your overall taxable estate, which can eventually protect your beneficiaries from a tax hit.

This strategy can also be a savvy way to eliminate the tax liability if you convert a traditional IRA to a Roth IRA, which some people prefer because the money in the Roth IRA will then grow tax free. Talk to your advisor about whether a conversion would make sense for your overall financial goals.
3. Donate valuable assets that aren't cash.
While most of us think of making donations to nonprofits in cash, there are other advantageous ways to support an organization. For example, donating stock that has appreciated allows you to do good for the charity and also potentially eliminate your capital gains burden.

Here's how it works: Rather than liquidating the stock and owing the capital gains tax, you can donate the security directly to the organization to be eligible for a deduction of the full fair market value, up to 30% of your adjusted gross income (AGI).

You also can donate items like vehicles, works of art, sports memorabilia or rare books, to name a few. Often, these are items that were bequeathed by another person yet don't hold value to you, personally. For example, a client of mine once donated valuable manuscripts to a university and received a sizable tax deduction.

The benefit again with these nontraditional assets is you will receive the entire value as a tax deduction without having to absorb the capital gains tax you otherwise would owe.

With a car (and potentially other goods depending on their value), work with the charity to determine the amount of the deduction. Often, especially in the case of a vehicle, a charity will sell the item, which means your deduction is based on the gross proceeds of the sale. There are exceptions, such as if the charity intends to use a vehicle for their own purposes — to deliver meals, for example. The IRS has a handy guide to all your questions about vehicle donation and how to determine the value of donated property. And always check with your accountant to ensure you are complying with all legal requirements.
Give Generously, but Also Wisely
No matter how you choose to give, here are three things to keep in mind.
Research the Charity Before Donating
Confirm the charity you've chosen is a 501(c)(3), which means it has tax-exempt status. Then evaluate other facets that are important to you, such as its financial health, key programs, results, and accountability and transparency policies. You can use a resource like Charity Navigator or GuideStar to compare various charities to find one that aligns with your goals.
Get the Requisite Paperwork
Always check with your tax planner to make sure you have the correct documentation should the IRS come knocking. Typically, contributions of money or goods will require a letter from the charity confirming how much of your gift was tax-deductible. Then verify you have the required forms.

For example, you'll need to complete Form 8283 for noncash charitable contributions, and/or Form 1098 for contributions of motor vehicles, boats and airplanes. You also may need a written appraisal from a qualified appraiser depending on the value of the item. Always confirm with your tax preparer you have the most up-to-date version of the forms and the correct paperwork.
Time it Right
While it's always a good time to be generous, there are some years you might find it even more beneficial to achieve a tax deduction. Often, it's when you had a surprisingly high amount of income in one year — for example, if you sold your company. That's when conducting thoughtful tax planning can be vital to lessen the blow, and a philanthropic donation can be a key part of that. Remember that in order to qualify as a tax deduction, the gift must be paid before the end of the calendar year.

Most individual itemizers can deduct up to 60% of their AGI to charity, and if your donation exceeds that, you can carry over the remainder for up to five tax years. However, note that tax laws and income brackets can change frequently so double-checking you're in compliance is always wise.

Finding creative ways to donate can benefit both you and the charity. And as you retain the glow of doing something nice — and also receive a tax deduction — you are liable to agree that it is better to give than receive.

Just remember to talk with your financial planner and accountant to ensure you're benefitting to the full extent possible.

Converting from a traditional IRA to a Roth IRA is a taxable event.

Generally, a donor advised fund is a separately identified fund or account that is maintained and operated by a section 501(c)(3) organization, which is called a sponsoring organization. Each account is composed of contributions made by individual donors. Once the donor makes the contribution, the organization has legal control over it. However, the donor, or the donor's representative, retains advisory privileges with respect to the distribution of funds and the investment of assets in the account. Donors take a tax deduction for all contributions at the time they are made, even though the money may not be dispersed to a charity until much later.

For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Cetera Advisor Networks LLC nor any of its representatives may give legal or tax advice.

Kevin Oleszewski is not affiliated with Cetera Advisor Networks, LLC.
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                    [post_content] => Kevin Oleszewski, CFP® Senior Wealth Planner

As the tax year draws to a close, many high-income investors will look to reposition their portfolios to intentionally generate losses as a way to offset gains — an investment strategy known as tax loss harvesting.

The goal? A net neutral tax position.
What Is Tax Loss Harvesting?
I sort of think of tax loss harvesting as the eharmony of investment planning. At its core, it's about matchmaking and there are three core steps to making it all work:

 	
Step 1: You identify equities in your taxable accounts — stocks, mutual funds, bonds, as examples — that aren't performing well.
 	
Step two: You single out those equities that have likely appreciated as much as they're going to, producing a gain that you're happy with.
 	
Step three: You match up the loss and the gain — selling one investment at a loss to offset the capital gain generated by the sale of the investment you sold at a profit.

How Tax Loss Harvesting Works
Here's an example of how a high-income investor might put tax loss harvesting to work:

Mrs. Investor buys 1,000 shares of XYZ stock at $100 a share. XYZ is now selling at $50 a share. In play: the sale of Mrs. Investor's business later in the year for a gain of $500,000. What does she do? She sells the shares in XYZ stock at a loss of $500,000 to offset the gain from the sale of her business.

If it sounds a bit complicated, it is — and I wouldn't recommend repositioning your portfolio like this without involving your tax advisor and financial planner.

There are many, many moving parts. For example, while a lot of people do tax loss harvesting at the end of the year, it can be done year-round. If there's a big dip in the market or a lot of volatility, this is a strategy that could be employed to an investor's advantage.
Who Can Benefit from Tax-Loss Harvesting?
It's worth noting that tax loss harvesting isn’t for everyone. People in lower tax brackets (10% and 12%) are taxed at ordinary income rates when they sell a stock they’ve held for at least one year and a day. So, their capital gain is actually zero.

Who should consider tax loss harvesting? Investors in a tax bracket of 22% and up.

If you think tax loss harvesting could be a good fit, the first thing you need to do is establish the cost basis of your investment — in other words, what you originally paid for it.

Next, give your portfolio a hard look and think about the long-term effect of holding a particular investment. Everybody has an affinity for certain stocks.  My wife holds a stock that she will never ever sell, just because she loves that particular company so much.
Tax Loss Harvesting Top Considerations
There's no way around it: Emotion can be involved here — and shouldn't be. My advice? Your selection of investments to sell should be based specifically on tax loss harvesting reasoning — and not on anything else. You are looking at what has appreciated significantly or depreciated significantly. It's as simple as that.

And when you replace the asset you've sold, it's generally a good practice to seek out something that will give you the same type of exposure in your portfolio so that your asset allocation remains unchanged. For example, if you sell stock in a particular soda company, a well‐known telecommunications company, or a popular technology company, you might consider looking at their competitors.

Finally, keep this one important rule in mind: If, for example, you sell stock at a loss for tax purposes, you must wait 31 days to buy it again for it to still count as a loss. Anything short of that, and you will lose the deduction.
Have More Questions About Tax Loss Harvesting?
Talk to a qualified financial advisor to help you evaluate whether tax loss harvesting could be beneficial for you. If you don’t already have an advisor you can trust, give us a call. We’ll help you find someone who will put your needs first.

Kevin Oleszewski is not affiliated with Cetera Advisor Networks, LLC.
                    [post_title] => Considering Tax Loss Harvesting? What You Need to Know First
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                    [post_content] => Last Friday, yet another strong payroll report was released with the headlines stating payrolls grew 263,000 in September and the unemployment rate fell to 3.5%.

The first three charts below illustrate the strength and resiliency of the labor market this year. The last two are forward-looking indicators that bode well for continued employment gains.

 	

3.8 million jobs created in 2022 (so far)


Payroll growth has certainly slowed over the last few months, from 537,000 in July to 315,000 in August and then 263,000 in September. But make no mistake: These are robust numbers, and the big picture is that 3.8 million jobs were created over the first nine months of 2022.

Even if the economy created zero jobs over the next year, 2022 would be the 9th best year for job creation since 1940. And if the next three months saw another 500,000 jobs created, 2022 would end up as the 2nd best year behind 2021 (which was boosted by the COVID recovery).



 	

Unemployment rate falls to pre-crisis low (also the lowest since 1969)


Unemployment fell from 3.7% to 3.5% in September, going in the opposite direction of what Federal Reserve officials expect amid their interest rate hikes. The 3.5% rate matches the lowest it reached during the last expansion and is the lowest since 1969.



 	

Prime-age employment-population ratio close to pre-pandemic levels


While the unemployment rate is the most widely cited measure of labor market strength, another useful measure is the employment-population ratio. It is the proportion of the working-age population that is employed. The prime-age employment-population ratio, i.e., workers between the ages of 25 and 54, avoids some of the issues that may impact the size of the labor force (which is used to calculate the unemployment rate), such as an aging population and people leaving the labor force for other reasons.

The good news is that the prime-age employment-population ratio is now at 80.2%, not far from the pre-pandemic high of 80.5%. The highest it got to during the 2003–2007 expansion was 80.3%. It did go higher in the late 1990s, indicating we may still have room for improvement.



 	

Initial unemployment benefit claims are near record lows


This is a popular leading indicator of the labor market that’s released weekly. Historically, a rise in initial claims for unemployment insurance benefits foreshadows a rise in the unemployment rate. Initial claims are currently drifting close to record lows (the latest was 219,000 as of Oct 1st). Even better news is the fact that “continuing claims” are around 1.36 million – the lowest level since the late 1960s and well below the pre-pandemic level of 1.8 million. Indicating that laid-off workers who file initial claims are quickly able to find a job, without continuing to receive unemployment insurance.



 	

Temporary help services employment continues to rise


This may be one you haven’t seen before, but it’s one I like to keep an eye on as a leading indicator for employment. Over the last few decades, employers have increasingly relied on temps to fulfill staffing needs, giving them more flexibility.

When times are good and the economy is expanding, firms hire temps to ramp up quickly. And when times are bad, firms can scale down by letting temps go first, without laying off more experienced workers. We’ve seen temp employment fall prior to the start of the last four recessions. The current situation is very different, as temp help services employment has continued to rise, which is historically not something you would see if we were close to a recession.



There you have it – five charts that highlight the strength of the labor market. Reach out to your advisor if you’d like to discuss what current economic conditions might mean for your unique situation.

 

 Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. The views stated herein are not necessarily the opinion of any other named entity. Opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed.
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            [post_content] => Tom Fridrich, JD, CLUⓇ, ChFCⓇ, Senior Wealth Planner 

The end of the year offers an ideal opportunity to look both forward and back — reflecting on recent achievements, while setting goals for the upcoming months. For many of my clients, it's also a time to review their finances and identify moves that can help protect their tax bills. 

If you've had a particularly high-income year, you might be feeling especially confident about your finances, and yet facing the upcoming tax liability may come as a shock. Fortunately, there are several strategies that can combine two common money-related goals — reducing your tax burden while contributing to charity. 
What Is a “High-Income" Year?
When we talk about a high-income year, we're not referring just to a hefty raise from a promotion or a job change (although that is commendable and likely should invite some financial planning of its own). Here, we're talking about an unusual, often one-time spike in your income. 

For example, you might have finalized the sale of your business and received a sizable one-time cash payment, rather than an installment payment over several years. Or maybe you sold property at the height of the market and realized an appreciation that exceeded the capital gains exemption or wasn't eligible for it. Or, you might have received an extraordinarily large bonus or want to exercise stock options that have recently vested. 
What Are the Tax Consequences of an Income Spike?
Obviously, most people appreciate that the higher their income, the higher the tax bill. And with ordinary income that is typically expected. 

However, if you've been affected by one of these significant events, it can be painful to pay the extra taxes, especially when you recognize that this money flowing into your account is not an ongoing event. 

Furthermore, while direct taxes are one thing, it might also trigger indirect consequences. A high-income year could mean you phase out of income credits that are necessary for your day-to-day life. Or it may make you ineligible for the Biden-Harris Administration's Student Debt Relief Plan, which is targeted only to those at a certain income threshold that you would otherwise qualify for. 

If you're on Medicare, a high-earning year can increase your health insurance costs and make you subject to what we call “Dear Aunt IRMAA," which stands for “income-related monthly adjusted amount" and results in a surcharge in your Part B and Part D premiums. 
What Are the Benefits of Giving to Charity in a High-Income Year? 
Simultaneously, many people realize this windfall offers the chance to make a philanthropic donation in a way they've been unable to previously. Perhaps you've made smaller donations throughout the year or have tithed faithfully to a religious organization, but never felt as though you were in the position to make a more substantial gift — until now. 

Thanks to this financial event, you can now make a bigger impact, while also reaping tax advantages. 
What Are Some Ways You Can Give to Charity in this High-Income Year? 
While you obviously could always make a direct cash gift to the organization of your choice, there are some other vehicles that might offer additional benefits. Here are three to consider: 

 	
 Donor-advised fund (DAF)

With a DAF, you make a charitable contribution to a fund that is held in a custodial account. While you make the donation and receive the tax deduction for the entire sum today, you don't have to select the end charities or how you want to allocate your funds. The money can sit in the DAF until you've determined where and at what pace you'd like to donate. Since the assets can still be invested, they may continue to grow for an even bigger impact. 

A DAF is appealing because rather than making an immediate generous contribution to a group, you have the latitude to do more research or give a smaller amount and evaluate how the organization uses its money. I also see clients using it as a way to introduce their children to a philanthropic mindset by inviting them to be part of an annual conversation about where they'd like to donate. 

You also can donate assets other than cash to a DAF, which makes them favorable for clients who have realized large stock gains. For example, if they purchased a portfolio for $10,000 that's now worth $100,000, they can donate the appreciated portfolio and avoid capital gains, while getting the deduction for the entire fair market value of $100,000. 

 	
 Qualified charitable distribution (QCD)

Clients who do not need the Required Minimum Distributions (RMD) from their 401(k) or individual retirement account (IRA) can donate it to charity and get the tax benefit as a QCD. This is especially useful for clients who take the standard deduction rather than itemizing, which would mean they otherwise wouldn't get tax relief. 

While it might be too late to deploy this strategy this year, it's something to consider for 2023. Because your RMD is based on your account value as of December 31 of the prior year, we can come close to predicting what your future RMD will be and begin to plan the right strategies, including potentially donating it to avoid unexpected taxes. 

 	
 Charitable gift annuity

If you want to make a considerable donation now, but would benefit from receiving future income, you could look into a charitable gift annuity. This is a contract between you and the charity where you make a bequest, which provides a tax deduction, and then you also receive a stream of income from the charity. In return, the charity receives the asset up front and can use it immediately. However, not all nonprofits will accept this type of gift because it can be more involved to set up a payment stream. You can visit the American Council on Gift Annuities to find out more about how charitable gift annuities work and search for member organizations by name, type or geographic location. 

With a charitable gift annuity, you claim taxes for the amount, minus the value of the payments that will eventually be made. So if you donate $30,000 with the expectation that $20,000 is the donation and the remaining $10,000 will be returned in payments, you would deduct the $20,000. 
Professional Advice Can Help You Make the Right Moves
While reducing your tax bill by donating to charity is an admirable act and often a wise financial strategy, always talk to a financial advisor before making any decisions. Since every person's situation is different, they can help you assess the tax risks and advantages and discuss options that align with your current financial position and goals. 

 

Tom Fridrich is not affiliated with Cetera Advisor Networks LLC. 

Generally, a donor advised fund is a separately identified fund or account that is maintained and operated by a section 501(c)(3) organization, which is called a sponsoring organization. Each account is composed of contributions made by individual donors. Once the donor makes the contribution, the organization has legal control over it. However, the donor, or the donor's representative, retains advisory privileges with respect to the distribution of funds and the investment of assets in the account. Donors take a tax deduction for all contributions at the time they are made, even though the money may not be dispersed to a charity until much later. 

For a comprehensive review of your personal situation, always consult with a tax or legal advisor.  Neither Cetera Advisor Networks LLC nor any of its representatives may give legal or tax advice. 
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                    [post_content] => Change happens. And whether we carefully plan for these changes, or we are taken by surprise by change, it's how we react to those changes that help dictate if they will ultimately be to our advantage. Whether it's a sudden inheritance, or a divorce settlement that is higher than anticipated, deciding what to do with an unexpected sum of money should happen after emotions have been processed.

Download the checklist today to get started.

 
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                    [post_content] => Have questions about how to incorporate your employee benefits into your financial plan? Talk to your financial advisor today or request an initial meeting with one of our highly qualified fiduciary advisors.

Download the checklist today to get started.

 
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                    [post_content] => Determining what age to begin claiming your Social Security benefit can be a big decision. Do you claim early at age 62? Take it at your full retirement age? Or delay until age 70? There are a wide variety of factors that can go into your final decision, and you should always consult with a qualified professional first. We put together a few charts to help you start that conversation.

Download the checklist today to get started.

 
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Download the checklist today to get started.

 
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                    [post_content] => Trillions of dollars will soon transfer from the Silent Generation and baby boomers to their adult children in what financial experts are calling “The Great Wealth Transfer.”

Are you one of the people expecting an inheritance in this historic transfer of wealth? Have you thought about the implications of receiving a tidy sum as a beneficiary?

Get ready and informed for your role as a beneficiary.

Download the checklist today to get started.

 
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                    [post_content] => Welcome to December

Can you believe we’ve made it to the final month of the year? Stocks gained nicely in October and November (more on that below), but now we head into the jolliest month of them all. The good news is no month is more likely to be higher for stocks. The S&P 500 has been up 75% of the time in December since 1950. Stocks have gained 1.5% on average this month, with only April and November faring better.

 	
November was another big month for stocks, making it two months in a row of solid gains.
 	
December is typically positive for stocks.
 	
The economy looks strong. Payrolls grew 263,000 in November and the unemployment rate stayed low at 3.7%.
 	
Consumption is accelerating on the back of rising real incomes.
 	
The Fed looks set to slow the pace of rate hikes, buying time for inflation to ease further.



After the big rally off the mid-October lows, some type of consolidation or modest breather would be perfectly normal early in December, but we expect the recent strength to continue. Some market analysts are calling this a ‘bear market rally,’ similar to the 17% rally over the summer. Bear market rallies are periods when stocks bounce well only to move back to new lows. But there are several differences: many more stocks are participating in this rally; many other sectors are participating, suggesting the underpinnings are stronger now; and August and September are historically two of the worst months of the year (especially in a midterm election year), while the coming months and quarters are seasonally quite strong.

Historically, midterm election years are the worst for stocks out of the four-year presidential cycle, but the good news is the best year is the following one, the pre-election year. Looking at the past eight times a midterm year was lower, the following year was higher every single time, up 24.6% on average. This could have bulls smiling in 2023 should history repeat.



One More Good Sign 

As mentioned above, many investors think this is a bear market rally and eventual new lows are coming for stocks, but we disagree. Here’s the best way to show this. The S&P 500 soared 8.0% in October off the bear market lows, but it then added another 5.4% in November. This back-to-back 5% monthly gain is extremely rare and a sign of strength, consistent with previous bear market lows. This occurred in the summer of 2020 and the periods following the bear market lows in 2003 and 2009. Those weren’t the worst times to be on the lookout for improvement.

The chart below shows all times the S&P 500 has had back-to-back 5% monthly gains. The future returns are quite strong, with the average return a year later up 22.2% on average and higher 13 out of 13 times.

 

Don’t Count This Economy Out

The big headline for the November payroll report was that 263,000 jobs were created last month, well above expectations of 200,000. Job growth has slowed since the beginning of the year, but make no mistake, this is still a very strong pace of job growth. As Fed Chair Jerome Powell noted in his recent comments, Fed members think monthly job gains of 100,000 are required to keep up with population growth. We’ve been well above that recently.



Overall job growth in 2022 totaled a whopping 4.3 million, putting it in line for the second-best year for job creation in 83 years (only last year was better). Also, the unemployment rate is currently at 3.7%, which is close to a record low.



It should not be a surprise that consumption is strong. Real personal consumption, i.e., after adjusting for prices, is accelerating once again. Much is on the back of vehicle sales, which are rebounding as production recovers. Keep in mind that consumption makes up about 70% of the economy.



The biggest reason for accelerating consumption is incomes are rising again after adjusting for prices. Real personal incomes have increased by 1.2% over the five months through October.



In short, inflation is easing, meaning incomes are rising on a real basis, allowing consumers to spend more — and they are. We believe this will continue into 2023 as inflation pulls back even more. Note that consumers still have excess savings from the pandemic. They’ve pulled about $1 trillion out of it over the last year, but that still leaves more than $1 trillion left over.

None of this is what you would expect if the economy is, or was, close to a recession.

Is There Anything to Worry About?

Yes, there is — the Federal Reserve.

Fed Chair Jerome Powell made important comments in his speech last Wednesday. The headline was that the Fed is going to ease the pace of rate hikes, which is welcome news. Also positive was the fact that the Fed was encouraged by the pullback in goods inflation. Powell also acknowledged that official rental inflation lags the sharp deceleration in rents that we see in private data (see our prior writing on this here and here).

However, the Fed is still worried about everything else, i.e., services inflation outside of housing, such as medical care, personal care services, insurance, financial services, education, childcare, etc. These make up about half of core inflation (ex-food and energy). While these categories did see a pullback in October, that’s just one month. The key is that Powell and the Fed believe these will ultimately be dependent on the labor market, especially wage growth.

The November payroll report did not have great news concerning this. Wage growth accelerated, rising 0.6% for all private workers (versus the expected 0.3%) and 0.7% for non-managerial employees, who tend to spend relatively more of their incomes. On a three-month basis, hourly wages are running at an annualized pace of 5.8% for all private workers and 6.4% for non-managerial workers. These are well above pre-pandemic averages, which is probably where the Fed would like it to be.



Wage growth by itself is a good thing. But the Fed believes stronger wage growth will keep upward pressure on inflation. Color us a little skeptical about this, especially given all the other data we’re seeing. But it doesn’t matter what we think. We need to follow the Fed’s framework, which means there is still a risk that the Fed overtightens and pushes the economy into a recession.

Our base case is the economy is strong enough to handle the aggressive rate hikes for now. All the data that came out this week confirms that likelihood. Plus, it looks like the Fed is going to slow down the pace of rate increases. This is important because it buys time for inflation to ease even more, hopefully convincing the Fed to back off in early 2023. And as we discussed at the top, markets may be sniffing out this bullish possibility.

 

This newsletter was written and produced by CWM, LLC. Content in this material is for general information only and 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. The views stated in this letter are not necessarily the opinion of any other named entity and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.

S&P 500 – A capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

The NASDAQ 100 Index is a stock index of the 100 largest companies by market capitalization traded on NASDAQ Stock Market. The NASDAQ 100 Index includes publicly-traded companies from most sectors in the global economy, the major exception being financial services.

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                    [post_content] => A More Positive 2023

Stocks continued to move higher last week, with the Dow back above 34,000 and officially closing at a new seven-month high along the way. After energy led the rally, several other sectors, including financials, health care, materials, and industrials are now participating and showing strength. This is encouraging and makes us more confident with our call that the bear market ended in mid-October.

 	
We’re moving into a period that is traditionally strong for equities.
 	
The consumer still looks healthy, and easing inflation will help.
 	
Minutes from the Federal Reserve’s last meeting suggest the pace of rate hikes will slow.
 	
Recession odds are higher, but that is not our base case.

More to consider as we head into 2023:

 	
Year three of the presidential cycle (also called a pre-election year) is the best for stocks, with the S&P 500 up 16.8% on average since 1950.
 	
Of the past 13 recessions, not one started in a pre-election year.
 	
When the S&P 500 has closed lower during a midterm year (such as will likely happen this year), it was higher the following year every time (8 for 8) and up a very impressive 24.6% on average since 1950.



A Healthy Consumer

Last week, a strong retail sales report boosted economic growth expectations for the fourth quarter. But the big question is whether consumer spending will remain strong in 2023. This is important because consumption, or lack thereof, will determine whether the U.S. will experience a recession over the next 12 months. Consumer spending accounts for 70% of GDP, so that’s pretty much the ball game. We believe the consumer is in a strong position for several reasons.

Most consumers spend out of their wages, so it helps to look at overall income in the economy. The chart below shows the year-over-year growth in aggregate weekly earnings, i.e., weekly earnings across all workers, which can be attributed to three sources:

 	
Employment growth: As more people become employed, overall income in the economy increases, driving more spending. Employment growth has been strong recently.
 	
Hours worked: As people work more, they earn more and overall incomes go up. The number of hours worked has been falling in recent months, but that’s mostly a reversal from the significant jump during the pandemic.
 	
Average hourly earnings: As workers earn more, overall incomes go up. Average hourly earnings have been hot over the past year, but they have slowed recently.



Aggregate earnings growth has slowed this year, from 11% to 8%. However, it is still higher than the pre-crisis pace of just under 5%. Employment growth will likely slow in 2023. Payroll gains have averaged about 289,000 over the past three months, but even half that number would create solid income growth comparable to pre-pandemic levels.

Consumers Still Have Excess Savings

Between April 2020 and July 2021, consumers saved an estimated $2.3 trillion over and above the pre-crisis trend. Much was due to fiscal policy, such as stimulus checks and expanded unemployment benefits. However, for the top 25% of earners, it was almost entirely due to reduced spending amid the pandemic.

Over the past year, consumers have drawn down these excess savings by an estimated $800 billion. But savings are still high.



Most of these excess savings are held by the top 50% of income earners. Inflation tends to hit lower-income workers harder, which means they probably had to draw on more of their excess savings to fund purchases.

But the consumer got a big break recently in the form of retreating gas prices. Gas prices are now almost back to where they were on the eve of Russia’s invasion of Ukraine. In a sense, just like higher gas prices were effectively a tax on incomes, falling gas prices are akin to a tax cut.



Consumers Still Have Borrowing Capacity  

Credit card spending is rising, which is not surprising. Prices are higher and consumers are spending more (even adjusted for prices). But more important than total debt is the debt service burden for households, which is close to record lows. The chart below shows households’ debt service as a percent of disposable income. As of the end of the second quarter, this metric was at 9.6%, well below the pre-pandemic average of 11.2%.



Also, credit utilization rates are still low. Consumers have yet to tap into their credit cards and home equity lines of credit to the same extent as before the pandemic hit. Utilization rates are also well below average levels over the past few decades.



Easing Inflation is Positive for Consumers

Excess savings were drawn down this year because income gains were not keeping up with prices. But as inflation eases, real incomes will likely start rising again, and the rate at which that excess savings pot gets depleted should slow down.

Of course, the other side of more robust real incomes is that demand will be strong, which could keep inflation on the higher side. However, we on the Carson Investment Research Team believe inflation will ease due to idiosyncratic downward pressure, as the same forces that boosted inflation reverse.

This should ease pressure on the Fed, and it looks like Fed members are recognizing that they’ve already done a lot by raising rates as much as they have. Minutes from the Fed’s November meeting suggest most officials favor a slowdown in the pace of interest rate increases.

All in all, the consumer is in a good position as we go into 2023, raising the likelihood that consumption will remain strong over the next year — and that should help avoid a recession despite the rapid pace of interest rate hikes in 2022.

 

This newsletter was written and produced by CWM, LLC. Content in this material is for general information only and 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. The views stated in this letter are not necessarily the opinion of any other named entity and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.

S&P 500 – A capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

The NASDAQ 100 Index is a stock index of the 100 largest companies by market capitalization traded on NASDAQ Stock Market. The NASDAQ 100 Index includes publicly-traded companies from most sectors in the global economy, the major exception being financial services.

Ryan is a non-registered associates of Cetera Advisor Networks.

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                    [post_content] => It is Thanksgiving week, so we want to review a few reasons for investors to be thankful. Yes, it has been a tough year. But things are looking better, and we expect more improvement in 2023.

Gridlock Can Be Good

The first reason to be thankful is stocks have continued to rally off their October lows, and now we have another potential positive: gridlock.

 	
Stocks continue to rally amid various concerns.
 	
Gridlock in Washington could be another positive for stocks.
 	
The U.S. consumer remains quite healthy — a reason to be thankful.
 	
More positive signs point to inflation peaking and rolling over.

Midterm voting is over. While the official results aren’t quite in yet, we do know Congress will be split. As of now, Democrats hold 50 seats in the Senate, which means they will maintain control, while Republicans gained their 218th seat in the House, which means they will hold a slim majority. The bottom line is neither Democrats nor Republicans have large majorities in either chamber; in fact, they are both near historical lows.

There’s an old saying that ‘gridlock is good’ for the markets, as Washington can’t do much when no one can agree. The chart below shows the S&P 500’s performance during the years of divided government since 1950. The average return for stocks was a very solid 15.7%, with only 1981 falling significantly and 2011 breaking even. The other years saw solid returns, suggesting gridlock indeed could be positive for the markets.



Lastly, Republicans have a narrow majority in the House. At the time of this report, they are expected to have a three-seat majority, the narrowest margin their party has held since 2001 and 2002. We reviewed years with narrow margins and found they generally lead to larger gains. When the House majority is held by fewer than 20 seats, the S&P 500 has gained a median of 19.5% since World War II. Additionally, the first year of a new Congress with a narrow majority, which in this case would be 2023, has been higher nine of the past 10 times.

The U.S. Consumer Remains Strong

The next reason to be thankful is the consumer remains extremely strong. In fact, the consumer’s strength in the face of numerous obstacles is one of the biggest surprises of the year. Last week, October retail sales rose 1.3%, beating expectations for a 1% jump. Prior months were revised higher as well.

One significant reason was stronger gasoline sales, which was a function of prices at the pump rebounding. But sales were also strong across most other areas, including auto sales, restaurant and bar sales, online spending, and even building materials.

One way to account for higher prices across several of these categories is to look at “real retail sales,” i.e., sales adjusted for prices. Real sales rose 0.8% in October, which is the fastest pace in eight months. Real sales had slowed in the summer (May-August), but they are picking up again — a sign of rising “real” incomes thanks to a pullback in inflation. Real sales are now up 3% from December 2021 through October. And in real terms, consumers are spending 10% more than expected if we just extended the pre-pandemic trendline. That’s massive!



Since consumer spending makes up nearly 70% of the U.S. economy, real sales offer another clue that a recession is not right around the corner. Many have been sounding the alarm, but with a consumer this strong we don’t see a recession on the horizon. And that’s definitely something to be thankful for.

More Good News on Inflation

As we noted last week, inflation at the consumer level is coming down quicker than expected. Used cars, apparel, and medical insurance all saw solid improvements. Additionally, rent and food inflation are finally showing signs of slowing as well. These sectors were significant contributors to the massive inflation spike.

Last week also produced good news from inflation at the producer level. That’s positive for consumers, because if it costs less to produce goods, companies can sell them for lower prices. In fact, the Producer Price Index (PPI) in October fell 0.5% after falling significantly the last few months. The year-over-year pace is now about 11%, having decelerated from a peak of 19% in March 2022. It still has further to go to return to the pre-pandemic pace of about 2%, but the trend is very encouraging.



All of this means less pressure on the Fed to continue its extremely aggressive stance on hiking rates to slow inflation. The Fed has given the patient a lot of medicine, and with real signs of improvement Fed members might pause to let the medicine work its magic. In fact, we think the odds of the Fed pausing rate hikes early next year are increasing greatly.

 

This newsletter was written and produced by CWM, LLC. Content in this material is for general information only and 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. The views stated in this letter are not necessarily the opinion of any other named entity and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.

S&P 500 – A capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

The NASDAQ 100 Index is a stock index of the 100 largest companies by market capitalization traded on NASDAQ Stock Market. The NASDAQ 100 Index includes publicly-traded companies from most sectors in the global economy, the major exception being financial services.

Ryan and Sonu Varghese are non-registered associates of Cetera Advisor Networks.

Crypto-Currencies, Digital Assets and other Block-Chain related technology (such as Bitcoin, Ethereum, NFTs and others) are not securities, not regulated, and not approved products offered by Cetera Advisor Networks LLC. Crypto-currencies and other block-chain related non-securities products cannot be recommended, offered, or held by the firm.

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                    [post_content] => On the heels of a huge month for stocks in October, the bull continued to soar in November, as the S&P 500 had its best week since June and the NASDAQ had its best week since March. Sparking much of the rally was news that inflation has likely peaked and is finally slowing. We’ll discuss that more below, but the bottom line is this could be a major catalyst for a continuation of the rally. We noted recently that many bear markets have ended in October, and we continue to think the odds are above average that it happened once again.

 	
Better-than-expected inflation data opened the door to more dovish monetary policy from the Federal Reserve.
 	
Goods deflation buys time for services to ease, especially rents.
 	
Stocks had a huge week on the back of softer inflation, even as crypto currencies imploded.
 	
Midterm election results surprised, and the results are still uncertain.
 	
Monetary policy remains the overarching concern.

Stocks have risen consistently during the six-month period from November through April of a midterm year, going back to World War II. One year after the midterm election, the market has also been higher every time. Conditions aren’t perfect, and we are aware of the many worries, including the fact that we don’t know who will control the House of Representatives yet.

But the stock market is a discounting machine, and it has priced in a lot of bad news. Should we get any more good news on inflation, the war in Ukraine, or the economy, the rally could have plenty of legs left.

A Very Encouraging Inflation Report, Including Goods Deflation (Finally)

The October inflation report was probably the best one we’ve seen in about 15 months, especially because it contained so many encouraging signs. Let’s walk through it.

Headline inflation rose 0.4% in October, as expected. Core inflation, which strips out volatile food/energy prices, and is arguably more important for the Fed, surprised. It rose 0.3% in October, below expectations for a 0.5% jump. This was the lowest monthly increase since September 2021.

Headline inflation is up 7.8% over the past year. That’s high, but it has come down from 9.1% in June. The deceleration stems largely from falling energy prices. As the chart below shows, the lighter red bars have accounted for a smaller portion of inflation over the past few months.



The chart also shows that food prices (dark red bars) continue to account for a large chunk of inflation.  But we got a break here as well. “Food at home,” i.e., groceries, which make up close to 9% of the inflation basket, rose just 0.4% in October. That’s the lowest in more than a year and well below the average 0.7% monthly increase that occurred over the first nine months of 2022.

The Goods Deflation We’ve Been Waiting For

Private inflation data has shown decelerating prices for goods outside of energy and food. At Carson, our chief market strategist, Ryan Detrick, wrote recently about collapsing used car prices. Retailers have been telling us for a while that they’re discounting items as well. We’ve just been waiting for the official inflation data to catch up, and it looks like that’s finally happening.

A broad list of goods, including used cars, saw prices fall in October, which is what makes it even more encouraging. The items below make up about 11% of the inflation basket (and 14% of the core basket). Falling household goods prices probably reflect the slowdown in residential activity, as home sales collapse amid higher mortgage rates.



Are Rents Breaking?

The best part about goods deflation is it offsets high services inflation. As the chart below shows, vehicles (blue bars) are now below the zero line for the second month in a row. We also got good news in the form of medical care services, which was a function of falling health insurance premiums.



The largest sector of the inflation basket is shelter, including rents on primary residences and “Owners’ Equivalent Rent” (OER), which is the “implied rent” that owner-occupants would have to pay if they were renting their homes. The latter is also determined using rents of equivalent homes. In other words, OER is effectively a measure of rents, and altogether rents make up a whopping 40% of the core inflation basket.

Rents have been rising, putting a lot of upward pressure on core inflation. As shown in the previous chart, housing (gray bars) grew larger and larger over the past year.

However, market rents have decelerated quite rapidly over the last few months. The problem is this movement hasn’t shown up in the official inflation data because of methodological reasons (we wrote about this quite extensively).

But the official rental data may be beginning to turn. Rent of primary residences rose 0.7%, and OER rose 0.6% in October. These are smaller increases than what we’ve seen over the previous couple of months. Make no mistake, a 0.7% rise is still a lot — it translates to an annualized pace of 9%, which is why the Fed is really worried about it. But hopefully the October report is a sign that the official data is beginning to turn lower.



A Soft Inflation Print Acts as a Pressure Release Valve

The softer-than-expected core inflation print was the catalyst for the S&P 500 Index gaining 5.5% on the day the inflation report was released, marking its best day since April 2020. The chart below shows some historical perspective for days that saw more than 5% gains. One year later, markets were up 91% of the time, with an average return of almost 28%.



The market’s response shows how much negativity and expected hawkishness from the Fed has been priced in. A soft report was like a pressure release valve.

We Need Time, and the Inflation Data Bought Us Time

One month does not make a trend, but the October inflation report was still very positive. Several leading indicators have shown decelerating prices. (We’ve written about this here and here.) The official data is clearly lagging, but the timing of the inflection point was uncertain. And it looks like we may have just gotten it.

This report is important for two main reasons:

Firstly, the goods deflation in October offset the upward pressure from strong price increases in services, which is primarily rents. It effectively buys time for official rental data to catch up to the private data, which are showing a rapid decline in rents.

Two, it buys time for the Fed. If this was yet another hot inflation print, that would have put enormous pressure on the Fed to go for a 75 bps (0.75%) increase in December. But now it looks like a 50 bps increase is the most likely scenario, assuming the November CPI report doesn’t surprise us by coming in hot. Investor expectations have shifted significantly. The probability of a 50 bps hike has gone from a near coin flip (57%) to 85%.



An interesting point Fed Chair Jerome Powell made a couple of weeks ago was that improved inflation data is not a precondition for slowing the pace of rate hikes. Instead, it’s the terminal rate that matters. The terminal rate is the highest rate the Fed will hike up to this cycle, and at the September meeting, Fed members released projections estimating it to be around 4.6%. Markets have expected this number to move close to 5% when the Fed releases new projections at its December meeting. If the October inflation numbers had come in hot, there would have been a lot of pressure on Fed officials to take the terminal rate projection well above 5%. But this report eases that pressure, and investors are currently looking at a terminal rate just shy of 5%.

We also saw a marked downshift in policy rate expectations one to three years from now. That makes sense. If inflation decelerates quickly, then rates don’t have to be as high as previously expected. Of course, a lot will happen between now and then. This is why we focus on the near term as far as investor expectations and Fed projections go. They can change significantly.



Last week was a big one with some major events, including the midterm elections and the crypto mess. But we were once again reminded that the overarching concerns right now are the Fed’s next steps, and for that, look to inflation.

 

This newsletter was written and produced by CWM, LLC. Content in this material is for general information only and 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. The views stated in this letter are not necessarily the opinion of any other named entity and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.

S&P 500 – A capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

The NASDAQ 100 Index is a stock index of the 100 largest companies by market capitalization traded on NASDAQ Stock Market. The NASDAQ 100 Index includes publicly-traded companies from most sectors in the global economy, the major exception being financial services.

Ryan and Sonu Varghese are non-registered associates of Cetera Advisor Networks.

Crypto-Currencies, Digital Assets and other Block-Chain related technology (such as Bitcoin, Ethereum, NFTs and others) are not securities, not regulated, and not approved products offered by Cetera Advisor Networks LLC. Crypto-currencies and other block-chain related non-securities products cannot be recommended, offered, or held by the firm.

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                    [post_content] => As expected, the Federal Reserve raised the federal funds rate by 0.75% to the 3.75-4% range on Wednesday. This was the fourth successive 0.75% hike. The initial market focus was on a new line inserted in the official statement, wherein the Fed nodded in the direction of decelerating the pace of rate hikes. Markets reacted positively to this, but Chair Jerome Powell was quick to remind investors that the level of rates matters more than the pace to get there. And Fed officials think the level (or “terminal rate”) should be higher than what they thought it should be in September. That immediately sent stocks into sharp negative territory.

 	
The Federal Reserve raised rates by 0.75% for the fourth consecutive time.
 	
The Fed nodded in the direction of decelerating the pace of rate hikes, but rates are likely to keep climbing.
 	
Some stock market weakness after a huge October is normal, but November is still a strong month historically.
 	
Stocks have been higher a year after midterm elections ever since World War II.
 	
The employment picture remains strong, with 263,000 jobs created in October.
 	
Wage growth is slowing, and that should ease the Fed’s concerns about wages driving persistent inflation.

However, none of this was new news. Fed members projected the terminal rate to be around 4.6% at their September meeting, and markets were quick to price that. Then, in mid-October, a hot inflation report sent expectations even higher. Expectations for the terminal rate crept up to above 5% prior to last week’s meeting, and they haven’t moved much since then, even after Powell’s comments. Investors are clearly ahead of the Fed now, as they expect updated terminal rate projections at the Fed’s December meeting to come in around 5-5.2%. All in all, we’re probably looking at another 1-1.25% worth of rate increases over the next four to six months. But the Fed may very well slow the pace down, perhaps raising rates by “only” 0.5% at its December meeting.



Midterm Elections are Here

As the midterm elections have approached, we’ve received numerous questions on the potential impact. On the Carson Investment Research team, we encourage clients not to mix politics with investing. We know that investors who stayed out of the markets because they disliked previous administrations missed out on significant gains.

As past elections have shown, the party that lost the prior presidential election is typically more motivated and gains seats in the Senate and House. Should this pattern hold again and the Republicans take both chambers of Congress, stocks will likely benefit as divided government bodes well for the markets. A Democratic president and Republican-controlled Congress has seen the S&P 500 gain more than 16% on average during the calendar year. This occurred in the late 1990s under President Bill Clinton. If the Democrats keep control of the Senate, the market impact is about a coin flip. But the good news is a Democratic president with a split Congress is also a bullish scenario.



The overall picture, and good news, is the year following a midterm election has been positive in 20 out of 20 years since WWII, with an average return of 14.1%. While it is not guaranteed to happen again, the outlook based on history is positive.

The Carson Investment Research team recently chatted with Libby Cantrill from PIMCO on the firm’s new podcast, Facts vs Feelings. Libby is an expert who helps investors understand the intersection of politics, policy, and markets.

A Tale of Two Employment Reports

The October payroll report offered a mixed picture. Two headline numbers stand out:

 	
Nonfarm payrolls rose by 261,000, which was more than an expected increase of 200,000.
 	
The unemployment rate rose to 3.7%.

The first headline suggests that employment is strong and the economy is resilient to higher interest rates, so far. That means we could see the Fed push interest rates even higher than what’s currently expected. The logic: strong employment = higher incomes = more spending = persistent inflation, and so more rate hikes are needed to reverse this process.

The second headline suggests the labor market is weakening. That means the Fed should be on track to pause soon, as weak employment should eventually result in lower inflation.

What’s important to understand is the two headline numbers come from two different employment reports.

The so-called “establishment survey” is where the nonfarm payrolls data (along with hours worked and wages data) come from. It’s a survey of about 131,000 non-agricultural businesses and government agencies, representing about 670,000 worksites.

The other survey is the household survey, and that is where the unemployment rate comes from, along with several other ratios, including the labor force participation rate and the employment-population ratio. It’s a survey of about 60,000 households and gathers information on employment, unemployment, and other labor-force-related data (age, education, part-time/full-time jobs, etc.).

The household survey is smaller than the establishment survey, and as a result the numbers tend to be more volatile. It also tends to be more useful to track ratios such as the unemployment rate, and another advantage is it doesn’t get revised. The establishment data can get revised, and we’ve seen large revisions to payrolls in the past, often months or years later.

In the October report, the unemployment rate rose because the household survey showed the number of unemployed persons rose. The survey also showed the number of employed workers fell by 328,000, which is completely opposite of what the establishment report showed (+261,000). That’s a massive difference of almost 600,000. But this is not unusual, as the chart below illustrates.



As the chart shows, the difference between employment gains reported by the two surveys was larger in April and June of this year. In April, nonfarm payrolls rose by 368,000, while the household survey reported employment fell by 353,000. In June, nonfarm payrolls rose by 293,000, but the household survey saw employment falling by 315,000. It goes the other way, too. In January, the household survey saw employment rise by 1.2 million, while nonfarm payrolls rose “only” 504,000.

However, both surveys reveal a similar picture over time.



Over short periods of time, one survey can accelerate much faster than the other. During the height of the pandemic (Mar-Apr 2020), the household survey reported significantly more job losses than the establishment survey: 25.5 million vs. 22 million. But the household survey caught up and even ran ahead of the establishment survey through January of this year. Now the establishment data is powering ahead while the other slows.

So, is the job market weak or not?

That’s the big question. Given the volatility of the numbers in the household survey, I tend to put more weight on the establishment data, with the caveat that establishment payroll data can be revised, although markets (and the Fed) react to current data.

A more nuanced view is the employment situation is clearly slowing. But 261,000 jobs created in a month is still very strong. In fact, over the 20 years through 2019, a period that covered two economic expansions, the average monthly job gains in months when payrolls grew was about 182,000. And over the three years prior to the pandemic (Mar 2017-Feb 2020), payroll growth averaged about 186,000 per month.



Now, the unemployment rate has increased to 3.7%, but one month does not make a trend. The same thing happened in August when the unemployment rate rose from 3.5% to 3.7% before falling back to 3.5% in September.

What Matters (to the Fed) is Wage Growth 

A key piece of information in the payroll reports is average hourly earnings. This is the mechanism through which the Fed believes it can (and needs to) pull down inflation. From the Fed’s perspective, weakening the labor market will reduce income growth, and that should ultimately reduce spending power and inflation.

Wage growth is in a clear downtrend. Average hourly earnings ticked slightly higher for private workers last month, but over the past three months it’s grown at an annualized pace of 3.9%, well below the past year’s pace and not much above the pre-pandemic pace of 3.1%. In fact, for production and non-supervisory workers, who tend to spend more of their incomes, the three-month pace of wage growth has fallen to 4.3%, down from 7.5% at the end of last year and approaching the pre-pandemic rate of 3.4%.



The good news is wage growth appears to be slowing even as employment remains strong. This is the “soft landing” scenario: wage pressure and inflation easing without a breakdown of the labor market, which runs counter to what the Fed believes will (and should) happen. Hopefully, easing wage pressure means the Fed doesn’t have to ratchet rates higher and higher. We just need inflation to cooperate, and that depends on a lot more than wages.

 

This newsletter was written and produced by CWM, LLC. Content in this material is for general information only and 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. The views stated in this letter are not necessarily the opinion of any other named entity and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.

S&P 500 – A capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

The NASDAQ 100 Index is a stock index of the 100 largest companies by market capitalization traded on NASDAQ Stock Market. The NASDAQ 100 Index includes publicly-traded companies from most sectors in the global economy, the major exception being financial services.

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            [post_content] => Welcome to December

Can you believe we’ve made it to the final month of the year? Stocks gained nicely in October and November (more on that below), but now we head into the jolliest month of them all. The good news is no month is more likely to be higher for stocks. The S&P 500 has been up 75% of the time in December since 1950. Stocks have gained 1.5% on average this month, with only April and November faring better.

 	
November was another big month for stocks, making it two months in a row of solid gains.
 	
December is typically positive for stocks.
 	
The economy looks strong. Payrolls grew 263,000 in November and the unemployment rate stayed low at 3.7%.
 	
Consumption is accelerating on the back of rising real incomes.
 	
The Fed looks set to slow the pace of rate hikes, buying time for inflation to ease further.



After the big rally off the mid-October lows, some type of consolidation or modest breather would be perfectly normal early in December, but we expect the recent strength to continue. Some market analysts are calling this a ‘bear market rally,’ similar to the 17% rally over the summer. Bear market rallies are periods when stocks bounce well only to move back to new lows. But there are several differences: many more stocks are participating in this rally; many other sectors are participating, suggesting the underpinnings are stronger now; and August and September are historically two of the worst months of the year (especially in a midterm election year), while the coming months and quarters are seasonally quite strong.

Historically, midterm election years are the worst for stocks out of the four-year presidential cycle, but the good news is the best year is the following one, the pre-election year. Looking at the past eight times a midterm year was lower, the following year was higher every single time, up 24.6% on average. This could have bulls smiling in 2023 should history repeat.



One More Good Sign 

As mentioned above, many investors think this is a bear market rally and eventual new lows are coming for stocks, but we disagree. Here’s the best way to show this. The S&P 500 soared 8.0% in October off the bear market lows, but it then added another 5.4% in November. This back-to-back 5% monthly gain is extremely rare and a sign of strength, consistent with previous bear market lows. This occurred in the summer of 2020 and the periods following the bear market lows in 2003 and 2009. Those weren’t the worst times to be on the lookout for improvement.

The chart below shows all times the S&P 500 has had back-to-back 5% monthly gains. The future returns are quite strong, with the average return a year later up 22.2% on average and higher 13 out of 13 times.

 

Don’t Count This Economy Out

The big headline for the November payroll report was that 263,000 jobs were created last month, well above expectations of 200,000. Job growth has slowed since the beginning of the year, but make no mistake, this is still a very strong pace of job growth. As Fed Chair Jerome Powell noted in his recent comments, Fed members think monthly job gains of 100,000 are required to keep up with population growth. We’ve been well above that recently.



Overall job growth in 2022 totaled a whopping 4.3 million, putting it in line for the second-best year for job creation in 83 years (only last year was better). Also, the unemployment rate is currently at 3.7%, which is close to a record low.



It should not be a surprise that consumption is strong. Real personal consumption, i.e., after adjusting for prices, is accelerating once again. Much is on the back of vehicle sales, which are rebounding as production recovers. Keep in mind that consumption makes up about 70% of the economy.



The biggest reason for accelerating consumption is incomes are rising again after adjusting for prices. Real personal incomes have increased by 1.2% over the five months through October.



In short, inflation is easing, meaning incomes are rising on a real basis, allowing consumers to spend more — and they are. We believe this will continue into 2023 as inflation pulls back even more. Note that consumers still have excess savings from the pandemic. They’ve pulled about $1 trillion out of it over the last year, but that still leaves more than $1 trillion left over.

None of this is what you would expect if the economy is, or was, close to a recession.

Is There Anything to Worry About?

Yes, there is — the Federal Reserve.

Fed Chair Jerome Powell made important comments in his speech last Wednesday. The headline was that the Fed is going to ease the pace of rate hikes, which is welcome news. Also positive was the fact that the Fed was encouraged by the pullback in goods inflation. Powell also acknowledged that official rental inflation lags the sharp deceleration in rents that we see in private data (see our prior writing on this here and here).

However, the Fed is still worried about everything else, i.e., services inflation outside of housing, such as medical care, personal care services, insurance, financial services, education, childcare, etc. These make up about half of core inflation (ex-food and energy). While these categories did see a pullback in October, that’s just one month. The key is that Powell and the Fed believe these will ultimately be dependent on the labor market, especially wage growth.

The November payroll report did not have great news concerning this. Wage growth accelerated, rising 0.6% for all private workers (versus the expected 0.3%) and 0.7% for non-managerial employees, who tend to spend relatively more of their incomes. On a three-month basis, hourly wages are running at an annualized pace of 5.8% for all private workers and 6.4% for non-managerial workers. These are well above pre-pandemic averages, which is probably where the Fed would like it to be.



Wage growth by itself is a good thing. But the Fed believes stronger wage growth will keep upward pressure on inflation. Color us a little skeptical about this, especially given all the other data we’re seeing. But it doesn’t matter what we think. We need to follow the Fed’s framework, which means there is still a risk that the Fed overtightens and pushes the economy into a recession.

Our base case is the economy is strong enough to handle the aggressive rate hikes for now. All the data that came out this week confirms that likelihood. Plus, it looks like the Fed is going to slow down the pace of rate increases. This is important because it buys time for inflation to ease even more, hopefully convincing the Fed to back off in early 2023. And as we discussed at the top, markets may be sniffing out this bullish possibility.

 

This newsletter was written and produced by CWM, LLC. Content in this material is for general information only and 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. The views stated in this letter are not necessarily the opinion of any other named entity and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.

S&P 500 – A capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

The NASDAQ 100 Index is a stock index of the 100 largest companies by market capitalization traded on NASDAQ Stock Market. The NASDAQ 100 Index includes publicly-traded companies from most sectors in the global economy, the major exception being financial services.

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                    [post_content] => You probably have questions on how the markets will be affected by the midterm elections. Will you feel policy changes in your wallet?   
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                    [post_content] => Watch Carson Group’s Senior Wealth Planner Ryan Yamada’s informational webinar that can help you discover which giving strategy you should pursue for tax efficiency.  
                    [post_title] => Which tax-efficient giving strategy is right for me?
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                    [post_content] => Wondering what Q4 might bring? Watch Carson Group’s Chief Market Strategist Ryan Detrick’s Quarterly Market Outlook webinar for Q4, now available for viewing on-demand.   
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                    [post_content] => It’s not too late to make some adjustments and finish this year fiscally strong. Find out how in our on-demand webinar Keys to Finishing the Year Financially Strong with Carson Group’s Senior Wealth Planners Tom Fridrich and Kevin Oleszewski.
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                    [post_content] => Carson Partners’ Ryan Detrick shares key events we saw in the past quarter and how we think they’ll affect markets in the upcoming quarter. Contact us to speak with a financial advisor.


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            [post_content] => You probably have questions on how the markets will be affected by the midterm elections. Will you feel policy changes in your wallet?   
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                    [post_content] => By Erin Wood, Senior Vice President, Financial Planning and Advanced Solutions

Just a few years ago, Rose retired with a decent-sized 401(k). With some careful budgeting and a part-time job, her retirement finances were on track. Rose was looking forward to traveling, reigniting her passion for photography and spending time with her son and her grandkids.

The pandemic changed everything. Her son contracted COVID-19 in the early days of the pandemic. His health deteriorated quickly and he died at only 35 years old. He didn’t have life insurance. A gig worker without a 401(k), he had very minimal retirement savings.

Rose’s grandchildren, ages 2 and 6, joined the more than 140,000 U.S. children under the age of 18 who lost their primary or secondary caregiver due to the pandemic from April 2020 through June 2021. That’s approximately one out of every 450 children under age 18 in the United States.

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Sadly, she is far from alone.

Read the full article
                    [post_title] => COVID’s Financial Toll Isn’t What You Think
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                    [post_content] => By: Erin Wood, CFP®, CRPC®, FBS®, Senior Vice President, Financial Planning, Carson Group

 
Laura and Caroline are in their late 50s. Friends since meeting at a playgroup for their toddlers, both were in long-term, seemingly happy marriages. Laura married her high school sweetheart right after they graduated from college and worked as an RN while her husband attended medical school. When their first child was born, Laura decided to become a stay-at-home parent. She just celebrated sending her last child off to college and was looking forward to enjoying an empty nest with her husband.
Already established in her career as an accountant for a large insurance firm, Caroline married a bit later, at 33. Today, she’s a financial controller for the same firm. Her spouse owns his own landscaping business. Caroline is the high-wage earner in the family.
Unfortunately, both women are now surprised to be facing a “gray” divorce: a divorce involving couples in their 50s or older. Each will need to make some tough choices as they deal with the emotional devastation of unraveling a long-term marriage. Although my focus as a financial planner is to help my clients find their financial footing during and after divorce, I also encourage clients to build a strong network of family and friends as well as a therapist or clergy person to offer critical emotional support during this time.
Read full article on Kiplinger.com
                    [post_title] => Emerging Financially Healthy After a Gray Divorce
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                    [post_content] => By Jamie Hopkins
Roth conversions can be a powerful tax and retirement planning technique. The idea behind most Roth conversions is to take money from an IRA and convert it to a Roth IRA. Essentially, you’re paying taxes today instead of paying taxes in the future.
The Tax Cut and Jobs Act lowered taxes for many Americans and with the SECURE Act Roth IRAs became even more powerful as an estate planning vehicle to minimize taxes, so it’s a convenient time to take advantage of Roth conversions. However, Roth conversions can come with some issues. Before you engage in one, be aware of these common problems as it can be hard to undo the transaction.
Conversions After 72
IRAs and Roth IRAs are both retirement accounts. It’s easy to assume Roth Conversions are best suited for retirement, too. However, waiting too long to do conversions can actually make the entire process more challenging.

If you own an IRA, it’s subject to required minimum distribution rules once you turn 72, as long as you had not already reached age 70.5 by the end of 2019. The government wants you to start withdrawing money from your IRA each year and pay taxes on the tax-deferred money. However, Roth IRAs aren’t subject to RMDs at age 72.

If you don’t need the money from your RMD to support your retirement spending, you might think, “I should convert this to a Roth IRA so it can stay in a tax-deferred account longer.” Unfortunately, that won’t work. You can’t roll over or convert RMDs for a given year. So, if you owe a RMD in 2020, you need to take it and you cannot convert it to a Roth IRA.

Despite the fact you can’t convert an RMD, it doesn’t mean you can’t do Roth conversions after age 72. However, you need to make sure you get your RMD out before you do a conversion. Your first distributions from an IRA after 72 will be treated as RMD money first. This means, if you want to convert $10,000 from your IRA, but you also owe an $8,000 RMD for the year, you need to take the full $8,000 out before you do a conversion.

Full article on Forbes

 
For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Cetera Advisor Networks LLC nor any of its representatives may give legal or tax advice."
"Distributions from traditional IRAs and employer sponsored retirement plans are taxed as ordinary income and, if taken prior to reaching age 59½, may be subject to an additional 10% IRS tax penalty. Converting from a traditional IRA to a Roth IRA is a taxable event. A Roth IRA offers tax free withdrawals on taxable contributions. To qualify for the tax-free and penalty-free withdrawal of earnings, a Roth IRA must be in place for at least five tax years, and the distribution must take place after age 59½ or due to death, disability, or a first time home purchase (up to a $10,000 lifetime maximum). Depending on state law, Roth IRA distributions may be subject to state taxes.
                    [post_title] => 3 Roth Conversion Traps To Avoid After The SECURE Act
                    [post_excerpt] => Roth conversions can be a powerful tax and retirement planning technique. The idea behind most Roth conversions is to take money from an IRA and convert it to a Roth IRA. Essentially, you’re paying taxes today instead of paying taxes in the future.
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                    [post_content] => By Jamie Hopkins

People plan on having a good day, a good year, a good retirement and a good life. But why stop there? Why not plan for a good end of life, too?

End of life or estate planning is about getting plans in place to manage risks at the end of your life and beyond. And while it might be uncomfortable to discuss or plan for the end, everyone knows that no one will live forever.

Estate planning and end of life planning are about taking control of your situation. Death and long-term care later in life might be hard to fathom right now, but we can’t put off planning out of fear of the unknown or because it’s unpleasant. Sometimes it takes a significant event like a health scare to shake us from our procrastination. Don’t wait for life to happen to you, though.

Full article on Kiplinger
                    [post_title] => 10 Common Estate Planning Mistakes (and How to Avoid Them)
                    [post_excerpt] => Estate planning and end of life planning are about taking control of your situation. Death and long-term care later in life might be hard to fathom right now, but we can’t put off planning out of fear of the unknown or because it’s unpleasant. Don’t wait for life to happen to you, though.
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                    [post_content] => By Jamie Hopkins
Everyone’s heard the stories of celebrities who died without a proper estate plan in place. It’s been a hot topic in the last few years with Prince and Aretha Franklin serving as unfortunate faces of the phenomenon. But it’s not just freewheeling entertainers. Abraham Lincoln – a lawyer by trade – didn’t have one either, which leads me to say something you’ve probably never heard anyone say: don’t be like Abraham Lincoln.
Most people want to plan for a good life and a good retirement, so why not plan for a good end of life, too? Let’s look at four ways you can refine your estate plan, protect your assets and create a level of control and certainty for your loved ones.
1. Review Beneficiary Designations
Many accounts can pass to heirs and loved ones without having to go through the sometimes costly and time-consuming process of probate. For instance, life insurance contracts, 401(k)s and IRAs can be transferred through beneficiary designations – meaning you determine who you want to inherit your accounts after you die by filing out a beneficiary form. You can often name successors or backup beneficiaries, and even split up accounts by dollar amount or percentages between beneficiaries with these forms.

Full article on Forbes
                    [post_title] => 4 Ways To Improve Your Estate Plan
                    [post_excerpt] => Most people want to plan for a good life and a good retirement, so why not plan for a good end of life, too? Let’s look at four ways you can refine your estate plan, protect your assets and create a level of control and certainty for your loved ones.
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            [post_content] => By Erin Wood, Senior Vice President, Financial Planning and Advanced Solutions

Just a few years ago, Rose retired with a decent-sized 401(k). With some careful budgeting and a part-time job, her retirement finances were on track. Rose was looking forward to traveling, reigniting her passion for photography and spending time with her son and her grandkids.

The pandemic changed everything. Her son contracted COVID-19 in the early days of the pandemic. His health deteriorated quickly and he died at only 35 years old. He didn’t have life insurance. A gig worker without a 401(k), he had very minimal retirement savings.

Rose’s grandchildren, ages 2 and 6, joined the more than 140,000 U.S. children under the age of 18 who lost their primary or secondary caregiver due to the pandemic from April 2020 through June 2021. That’s approximately one out of every 450 children under age 18 in the United States.

Rose’s ex-daughter-in-law battles drug addiction and had lost custody of the kids during the divorce, so Rose became the children’s primary caregiver. She quickly discovered that caring for young children as an older adult is more physically challenging than when she raised her son, so she made the difficult decision to leave her part-time job to have the energy to care for her active grandchildren. She wants to do everything for these kids who have lost so much — but it puts her financial security at risk.

Sadly, she is far from alone.

Read the full article
            [post_title] => COVID’s Financial Toll Isn’t What You Think
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    [is_singular] => 
    [is_robots] => 
    [is_favicon] => 
    [is_posts_page] => 
    [is_post_type_archive] => 
    [query_vars_hash:WP_Query:private] => 8bbea74eca9b0e937ac286f0d22d32a8
    [query_vars_changed:WP_Query:private] => 
    [thumbnails_cached] => 
    [allow_query_attachment_by_filename:protected] => 
    [stopwords:WP_Query:private] => 
    [compat_fields:WP_Query:private] => Array
        (
            [0] => query_vars_hash
            [1] => query_vars_changed
        )

    [compat_methods:WP_Query:private] => Array
        (
            [0] => init_query_flags
            [1] => parse_tax_query
        )

)