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The betting market confirms what recent opinion polls are saying: the race for US President is currently in a statistical dead heat.
Many of us have strong feelings about the people who run for office and take on the responsibility to represent us in government.
Because politics touches many parts of our lives and plays a role in how we as a nation are perceived by others in the world, it’s understandable why a presidential election stirs sentiment.
However, when investing, it’s advisable to set emotions aside.
Policies, not personalities, are likely to have the greatest impact on financial markets in the years ahead.
Inherited IRAs: Final Ruling from the IRS
Most people who have inherited a retirement account since 2020 must take minimum distributions every year if the original owner was already old enough to be taking Required Minimum Distributions (RMDs). And beneficiaries must withdraw whatever is left over by the tenth year.
The original SECURE Act, which took effect in 2020, included rule changes for retirement account withdrawals, including a requirement to empty an Inherited IRA within ten years, if you inherited it after 2019 (the “10-Year Rule”).
But since passage of the Act, there has been confusion regarding how beneficiaries who are not surviving spouses must handle their inherited retirement account withdrawals.
We’ve written on this topic previously in April 2024 and August 2023, and now we have clarity through Final Regulations issued by the IRS on July 18, 2024.
Non-Eligible Designated Beneficiaries (essentially anyone who is not a surviving spouse) must take RMDs annually from Inherited IRAs.
The RMD is a minimum amount that’s calculated by dividing the account’s balance at the end of the previous year by the owner’s remaining life expectancy, using the IRS’s actuarial data. Account owners can take larger distributions, which may be advantageous in lower-tax years.
If you inherited an IRA after 2019 and have not taken a distribution or have missed a year, that’s OK.
The IRS has confirmed that there will be no penalty and no requirement to make up a missed distribution – which means the new regulation effectively starts with RMDs required to be taken in 2025.
In addition to this, there is other regulatory guidance for specific circumstances where the new rules for Eligible and Non-Eligible Designated Beneficiaries apply.
These regulations introduce more complexity to the process of tax planning around retirement accounts, particularly after the death of the account’s original owner.
If you’ve inherited an IRA after 2019 and have questions regarding your withdrawals, please reach out to us.
Identity Fraud Protection Techniques
Our colleague and MFA founder Susan Moore contributed the following article.
Identity Fraud: A Cautionary Tale
Over the last weeks, I’ve received six letters that went something like this:
“Dear Susan – We’ve received your application for a credit card. We are unable to act on your application at this time because we’ve received notification from [Experian/Equifax/Transunion] that you’ve placed a security freeze on your credit file.”
I expect that I’ll receive more letters like this in the coming weeks.
Somewhere along the line, elements of my identifying information, including my Social Security number, have been hacked. That’s not really surprising.
Identity fraud is a growing concern in today's digital age, impacting millions of people each year. As your financial planners, we want to provide you with the information and tools to help you protect yourself from this pervasive threat.
The Scope of Identity Fraud
Identity fraud affects a significant portion of the population in the United States. According to a report from Javelin Strategy & Research, approximately 33% of U.S. adults have experienced some form of identity theft. This means one in three people have had their personal information compromised, leading to financial loss and emotional distress.
How Is Information Stolen?
Fraudsters use various methods to steal personal information. Here are some common ways:
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Data Breaches: Large-scale data breaches at companies can expose millions of individuals' personal information, including Social Security numbers, addresses, and financial data.
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Phishing Scams: Fraudsters use emails, texts, social media messages, or phone calls that appear to be from legitimate sources, tricking individuals into providing personal information.
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Skimming: Devices placed on ATMs or point-of-sale terminals capture card information during transactions.
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Mail Theft: Stealing mail can give criminals access to bank statements, credit card bills, and other personal information.
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Social Engineering: Manipulating individuals into divulging confidential information through deceitful tactics.
Notable Companies Affected by Data Breaches
A number of high-profile companies have experienced data breaches, exposing millions of people's personal information, and the list keeps growing. A few of these include:
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Equifax: In 2017, the credit reporting bureau Equifax suffered a data breach affecting over 147 million people, compromising Social Security numbers, birth dates, addresses, and driver's license numbers.
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Target: In 2013, Target experienced a data breach that affected 40 million customers' credit and debit card information.
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Yahoo: Yahoo faced a series of data breaches between 2013 and 2016, affecting all 3 billion user accounts.
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Marriott: In 2018, Marriott disclosed a data breach that exposed information on approximately 500 million guests.
How to Place a Credit Freeze
Placing a freeze on your credit report can prevent fraudsters from opening new accounts in your name.
Even though the fraudsters who tried to open accounts in my name has my Social Security number, their efforts failed because I have a freeze on my credit reports.
Here are instructions for placing a freeze with each of the three major credit bureaus:
- Visit the credit bureau’s website or call them
- Provide the required personal information
- Create a PIN to manage your freeze
- Confirm the freeze through the method provided (online, phone, or mail)
And here is the contact information for each of the major credit bureaus:
Equifax
Experian
TransUnion
It’s important to put a freeze on your records at all three of the above agencies. And although the above three companies are the largest credit reporting agencies, there is another one: Innovis. You can place a freeze on your records there by calling 1-866-712-4546 or going to their website.
Additional Tips to Protect Against Credit Fraud
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Use Extreme Caution in Sharing Your Personal Information. Don't share personal information over the phone or online unless you are certain of the recipient's identity. Don’t assume that because you’ve been asked for information, you need to provide it.
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Example 1: if filling out a new client/account/patient form that asks for your SS number, try leaving it blank, and see if you’re asked again to provide it.
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Example 2: If you receive a phone call asking for personal info, it most likely is an attempt to steal your information for fraudulent purposes. Be suspicious of these calls. Ask them to send you a request in email or snail mail. (Don’t ask for a phone number where you can call them back; they often have set up fake phone numbers to trick you.)
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Monitor Your Credit Reports: Regularly review your credit reports from Equifax, Experian, and TransUnion to check for unauthorized activity. You can get a free report annually from each bureau at AnnualCreditReport.com.
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Use Strong Passwords: Create strong, unique passwords for your online accounts, and update them regularly. Consider using a password manager to keep track of them.
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Enable Two-Factor Authentication (2FA): Add an extra layer of security to your online accounts by enabling 2FA, which requires a second form of verification.
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Shred Personal Documents: Shred any documents containing personal information before disposing of them.
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Secure Your Devices: Use antivirus software, keep your operating system updated, and be cautious when downloading apps or software.
Identity fraud is a serious threat that requires vigilance and proactive measures to mitigate.
By understanding how fraudsters operate and taking steps to protect your personal information, you can significantly reduce the risk of falling victim to identity theft.
If you suspect your identity has been compromised, act quickly to minimize potential damage. As always, feel free to reach out for assistance or guidance in safeguarding your financial future.
College Planning in the Summer: A Focus for High School Seniors
Our colleague and college planning specialist Donna Cournoyer contributed the following article.
Summer before senior year for a high school student is often filled with good times, maybe a summer job, and also great anticipation of the final stretch of the college planning process with fall college applications looming in the coming weeks.
For families of college bound students entering their final year in high school, the end of summer is a great time to ensure most of the preparation is done, and that you’re organized and ready for application season this Fall.
Focus Items for Being Well-Prepared
- Narrow your school list and decide on a final list for applications (for all criteria including costs)
- Have accurate estimates for out-of-pocket costs for each school; either by working with a college planner, and/or using the Net Price Calculators on each school’s website for financial aid and merit scholarship estimates
- Make a list of deadlines and choose your application timeline (early action, regular decision, etc.) for each school and list any materials needed for your applications
- Finalize essay or essays for your applications
- Have your list of extracurriculars, achievements, and awards up to date and ready
- Have any personal statements and teacher recommendations ready
- Start the Common App soon after it opens on August 1 to be sure you stay on schedule
For high school students heading into senior year, here are a few things which are important to keep in mind:
High School Courses and Activities
Keep up focus on grades and activities. Admissions will require final transcripts and may question if your student’s grades suddenly dip after the application has been submitted.
Do not make significant changes to your curriculum, or switch from AP and honors to all regular courses. Again, keeping up with your plan is important so that you will maintain your status as a highly focused student.
Admissions Process
If the schools on your college list heavily consider demonstrated interest in applicants, be sure to reply to requests for communications and attend events in the fall during the admissions process. Interact with your admissions counselors when they reach out.
Some schools weigh a student’s engagement and interest when reviewing applications. However, if you contact the school, be sure to have specific questions and make it a productive call for both you and the admissions staff.
You should be assigned an admissions counselor at each school. Be sure to reach out to them if you have important questions, especially if it affects your decision about where you will be attending, such as costs, or any other key factors in decision making.
Finally, get organized for your senior year and create a plan for applications so you can balance completing applications with your senior year coursework and activities. This will also help to keep the stress to a minimum. Reach out for help from parents and school counselors when needed.
Remember: most of the hard work is done!
Head into fall organized and prepared with enthusiasm to complete college applications. Before you know it, the holidays will be here, and your students may soon know where they’ll be headed off to college next year.
Reading Room: How to Know a Person
David Brooks is a Canadian-born American conservative political and cultural commentator who writes for the New York Times and The Atlantic.
He’s also written for the Washington Post, The Wall Street Journal, and The Weekly Standard. He joined Weymouth, Massachusetts native Mark Shields from 2001 to 2020 on PBS News Hour and continues to comment on PBS.
In his recent book How to Know a Person, he offers observations and personal experiences that help us become more skilled at the art of seeing others and making them feel seen, heard, and understood.
Chapters include: The Right Questions, The Art of Empathy, and What Is Wisdom?
In Brook’s words: “I’m hoping this book will help you adopt a different posture toward other people, a different way of being present with people, a different way of having bigger conversations.”
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