Focus On What You Can Control
Looking ahead into 2024, I would encourage all of you to consider spending more time focusing on what you can control and less time focusing on what you can’t. I think in general, this is a great discipline to practice, but especially when it comes to finances and investing.
We as investors sometimes get into trouble by making decisions based on factors completely outside of our control, instead of making decisions based on what we can control. Let’s take a look as some examples. The market and current events are completely out of our control. So is inflation, interest rates and the Federal Reserve. So are the news, politics and elections. I could go on, but I won’t. How often do investors make knee-jerk emotional reactions based on some of the factors I just mentioned? Unfortunately, multiple research studies have shown, way more often than they should.
So, what can we focus on and control within our own financial situation? Well for starters our budget, cash flow and savings goals. We can also put together a plan and strategy for controlling where and how our money is invested. Then, perhaps arguably the most important thing within our control is our own behavior when it comes to our investment plan and strategy. Making sure we react or don’t react properly during critical market inflection points. Interestingly enough, this is also arguably the hardest factor to control because of the aforementioned items outside of our control that influence our behavior. Behavioral discipline is a muscle that needs to be exercised and not necessarily a switch that can be flipped on and off. That’s why, here at MtM, we believe it’s vitally important to have a trusted financial advisor at your side helping coach you to exercise that muscle.
As you begin to think about some of your financial goals and plans for next year and beyond, I encourage you to also start thinking more about what you can control, and think less of what you can’t. And if you or someone you know is having trouble exercising that muscle, that’s what we are here for – to take some of that burden off your shoulders so we can help carry it for you.
“The investor’s chief problem – and even his worst enemy – is likely to be himself.” – Benjamin Graham
The Season of Giving
I know many of us give generously all year long to family, friends and various organizations close to our hearts. Before the year ends I wanted to highlight some last minute giving strategies to consider.
1. Qualified Charitable Distributions or QCDs
These are distributions from your IRA made directly to a qualified charity. They satisfy all or part of your required minimum distribution for the year and are not taxable to you. You can begin taking QCDs at age 70 ½. So, if you are 70 ½ or older and already giving to a charity or charities from a non-retirement account, consider making those gifts from your IRA. The charity will still benefit, and you will save money in taxes.
2. Donor Advised Funds
A donor-advised fund is a special account for managing and distributing charitable donations. You make contributions of cash, stock or other eligible personal assets into the account, which are tax deductible if you itemize. You can then invest your contributions (all growth is tax-free) for future giving as you can disburse the funds whenever you wish. The fund simplifies and streamlines your giving as you can give to multiple charities every year and receive one consolidated giving statement for the whole year.
3. 529 Plan Contributions
You can consider giving your little loved ones the gift of a future education (or early retirement savings – read until the end!) with contributions into a 529 plan. These contributions are Pennsylvania state tax deductible and grow tax-deferred and then are distributed tax-free when used for qualified education expenses, whether K – 12 or College. And thanks to the recently passed SECURE 2.0 Act, starting next year you can begin rolling over unused 529 funds into a Roth IRA for the beneficiary if certain criteria are met.
“Strange, isn’t it? Each man’s life touches so many other lives. And when he isn’t around, he leaves an awful hole, doesn’t he?” – Clarence, It’s A Wonderful Life
From everyone here at MtM Financial, along with Sarah, myself, Luke and Logan (pictured above), we wish you all a very Merry Christmas and Happy, Healthy and Prosperous 2024!
Thank you for being my clients, it’s a privilege to serve you.
Until next time,
Jon Weimer
Variable annuities are long-term investments suitable for retirement funding and are subject to market fluctuations and investment risk, including the possibility of loss of principal. Annuity guarantees, including guarantees associated with benefit riders are subject to the claims-paying ability of the insurance company. Surrender charges may apply if money is withdrawn before the end of the contract.
Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance is no guarantee of future results. Please note that individual situations can vary. Therefore, the information presented here should be relied upon when coordinated with individual professional advice. This information is not intended to be a substitute for personalized financial planning, tax planning, or legal advice.
Securities offered through The Strategic Financial Alliance Inc. (SFA), Member FINRA, SIPC. Advisory and tax services offered through MtM Financial Group, LLC which is otherwise unaffiliated with SFA. 4505 Hanoverville Road, Bethlehem, PA 18020. SFA does not provide tax or legal advice. Supervising office 888-447-2444.