This week’s stock market had major indices achieving fresh all-time highs amid a mix of positive earnings and economic data.
Key drivers included better-than-expected third-quarter earnings beats from S&P 500 companies, with 85% exceeding EPS estimates, and softer CPI inflation figures that came in below forecasts. Investment trends remain centered on technology and AI, supported by resilient corporate profits, though broader market breadth suggests healthy participation across sectors.
As I suggested last week, the federal reserve lowered interest rates by 0.25%. This leaves our cash reserves accounts yielding 3.45%. This is still better than many competing cash reserves accounts, but brings into question the whole idea of maintaining significant reserves in the first place. Cash reserves are primarily intended as short-term parking places, but given their recent relatively attractive rates, some folks have parked longer term funds in these instruments. Now that the rates on these accounts have dropped below longer-term alternatives, it might be time for many to reach out to consider other ideas. If you think you’re one of these people, feel free to reply to this email… I’ll get the reply and respond as quickly as practicable.
One financial planning topic currently discussed in the news and on social media is the emphasis on health-related considerations in retirement strategies, particularly during National Financial Planning Month this October. Conversations highlight the need to account for potential medical expenses, long-term care options, and insurance integration to maintain financial stability in later years. This approach helps ensure that healthcare needs do not erode savings unexpectedly.
Although we don’t sell insurance products, if we discover the need for them with you, we have our “people” that will guide you in the right direction.
Financial Planning Hacks of the Week
For investors approaching retirement within the next 5 to 10 years or those already retired, here are a couple of lesser-known strategies to consider:
- Leverage Qualified Charitable Distributions (QCDs): If you are 70½ or older and subject to required minimum distributions (RMDs) from your IRA, directing up to $100,000 annually to qualified charities via QCDs can satisfy your RMD while excluding the amount from taxable income. This can be particularly useful for maintaining lower tax brackets and supporting causes you value without additional out-of-pocket costs.
- Strategic Roth Conversions in Transitional Years: In years when your income is lower—such as during a career transition or early retirement—converting portions of traditional IRA funds to a Roth IRA can minimize future taxes on withdrawals. By paying taxes on the conversion at current rates, you position tax-free growth for the long term, which is especially beneficial if you anticipate higher tax brackets later due to RMDs or other income sources.
If you have questions or comments, please reply directly to this email—I read and respond to all of them. You can also reach out by calling or texting our office at 480-575-7688. If you are not yet a client and would like answers to in-depth questions or to learn whether we can help with your situation, consider booking a Discovery Call
The information on our website and this blog is for information purposes only. It is believed to be reliable, but JR Snell Capital Management does not warrant its completeness or accuracy. The information on our website and in this newsletter or blog is not intended as an offer or solicitation for the purchase of stock or any financial instrument.