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Welcome to our summer newsletter!

The investment markets have continued their recovery so far this year. As of the close on Thursday, July 20, the S&P 500 is up more than 19% for the year, international developed markets are up over 14%, and the broad bond market index is up a little over 2%.* The markets have proved remarkably resilient weathering the bank crisis, inflation, fed rate increases, debt ceiling drama, global tensions, and more. It's another year that reminds us of the unpredictability of the investment markets and the importance of staying invested even when there's a lot of uncertainty.

For workers 50+ making more than $145,000 per year, this is the last year you can do your 401(k) catch-up contributions pre-tax. Beginning next year, catch-up contributions for high earners will need to be Roth. It's still beneficial to you to make catch-up contributions rather than shifting the savings to a brokerage account; it just means your current tax bill will be a little bit higher. There's a lot of lobbying going on now to get the deadline extended because employers say they can't get ready in time, so we'll stay tuned to see what develops.

If you inherited an IRA in 2020 or later, the IRS announced last week that they will again waive penalties for not taking a required minimum distribution (RMD) in 2023 (as they also did for 2021 and 2022). That means that you get another year where you don't need to take an RMD, but it doesn't mean you shouldn't take one. The entire balance will still usually need to be distributed within 10 years, so it's the perfect opportunity for a little tax planning to ensure you don't pay more than necessary.

Our team has some fun updates. Sterling Gray, CFP® joined our financial planning team and relocated from Houston to be near our office in Keller. To learn more about Sterling, please visit the "Meet our Team" page. And congratulations to Thomas Warkins, our operations associate, who successfully passed the CFP® exam this month on his 1-year anniversary with the firm!

If updating your financial plan is on your to-do list, it may be helpful to know that we are usually scheduling at least a few months out. However, we also understand that unforeseen circumstances can lead to reschedules, creating last-minute openings. To make the most of these opportunities, simply have your financial records prepared when you call to schedule your appointment. By doing so, you can express your interest in securing an earlier slot if any become available. We appreciate your proactive approach to planning and enjoy assisting you with your financial goals.  

As you may be aware, the transition from TD Ameritrade to Schwab is occurring over Labor Day weekend. If you have any questions or concerns about this transition, please let us know.

Please read on for other actionable planning ideas. We will be closed for Labor Day (Monday, September 4th). We plan to send the next newsletter out in mid-October. We'd love to hear from you on questions or suggestions for topics you’d like to see covered in the future.

Did you know...?

There may be a way that you can contribute and deduct your contribution to a Traditional IRA even if your modified adjusted gross income (MAGI) is above the phaseout income levels?

If you file single for your taxes and are not covered by a retirement plan through work, you are eligible for the full deduction.

If you file married filing joint (or separately) and neither of you are covered by a retirement plan through work, you are both eligible for the full deduction. If you file married filing joint (or separately) and one of you is covered by a retirement plan through work, you can still deduct the full contribution if your income is below $218,000, and there's a smaller amount that can be deducted up to $228,000.

If you think you'll be close to the income limits for Traditional or Roth IRA contributions, we recommend waiting until your income is known since you can make 2023 contributions right up until April 15, 2024.

Even More IRA RMD Relief

While the big news around IRS Notice 2023-54 relates to beneficiaries who inherited IRA accounts in 2020 or later, there is additional relief to be found for a small part of the population.

If you were born in 1951 and you had a distribution made from your IRA this year to meet your required minimum distribution (RMD) requirements, you can roll the specified amount back. You have until September 30th of this year to do so, and the distribution must have been this year before July 31st to qualify for this relief provision.

The reason for this change is the extension in the RMD age from 72 to 73 being enacted so late last year (December 22nd) that some custodians could not act quickly enough to stop the unnecessary distribution from happening.

If you are one of the lucky few that this extension applies to, and you can roll those funds back into your IRA, this could be a good option for you to help manage your income tax situation for another year.

Investment Market Update

We remain in positive territory for our investment returns year-to-date. This is a welcomed contrast to what we experienced for the first half of 2022.

The S&P 500 posted stronger returns than first quarter for a 8.74% return in the second quarter. Small cap stocks gained less at 5.21%. Large cap value stocks lagged behind the two at 4.07% for the quarter.


Developed market stock cooled some this quarter with a 2.95% return. Emerging markets stock remained positive, as well, with a .9% return for the quarter.


Our bond fund returns pulled back some recently with the US aggregate bond index dipping down for the quarter at -.84%. Shorter-term bond funds lost slightly less this quarter at -.58% sitting right at 1% so far year-to-date.

Okay. Let's talk about that elephant in the room... bond funds. Our supposed "buffer against volatility." Wouldn't a better buffer right now be a CD that preserves principal? After all, they are earning around 5% for a fairly short duration. CDs and Money Market funds have their place, but did you know these can come at a cost if you try to make them part of your long-term investment strategy? We take the long-term approach with bonds as we do our stock investments. Bonds are fundamentally different than stocks and will start to earn their keep in your portfolio as a result of the higher interest rates. Principal Jean Keener shares our perspective on Cash Vs. Bonds in 2023 in this recent blog. As Vanguard illustrates in their article here, looking at bonds from a price return perspective leads to inaccurate conclusions if that is your only metric. With a little patience, we should start seeing the impact of higher interest rates in time in our bond funds' total return figures.

*Source for investment returns in the opening paragraph is Morningstar as of July 20, 2023. S&P 500 TR USD for S&P 500. MSCI EAFE NR USD for developed international markets. Bloomberg US Agg Bond TR USD for the US aggregate bond index.

**Source for investment returns is Morningstar as of June 30, 2023. S&P 500 TR USD for S&P 500. Russell 2000 TR USD for small cap stock. Russell 1000 Value TR USD for large value stocks. MSCI EAFE NR USD for developed international markets. MSCI EM NR USD for emerging markets stock. Bloomberg US Agg Bond TR USD for the US aggregate bond index. Bloomberg US Government 1-3 Yr TR USD for short-term bonds.

1692 Keller Parkway
Keller, TX 76248
Ph: 817-993-0401
Fax: 817-993-0002
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