Our Perspective on Industry News and Trends

The Tax Cuts and Jobs Act of 2017 more than doubled the amount that a person can pass at death without incurring any estate tax and is currently $13.61 million. However, in 2026, it’s set to drop to around $7 million. Many are taking advantage of the current higher limits by adjusting their estate plans now. With future changes uncertain, it’s a good time to consult your attorney or portfolio manager to explore your options before the exclusion decreases.

Election season can be overwhelming. With non-stop news and specialists shouting about the “most important election in history,” it’s easy to feel stressed. But what’s really at risk when it comes to your family’s wealth and long-term financial goals? In our newest blog, we cut through the noise and offer practical steps you can take to protect your finances no matter who wins.

Election years can bring added stress and uncertainty to many aspects of life, and this election cycle is certainly no exception. Elections are important, and their outcomes can affect the lives of millions, if not billions, around the globe. But how important are they for investors? Every cycle is different, and investors’ focus is always changing, but history suggests that the party in the White House is just one of many factors.

With the increasing availability of Roth 401(k) options in many employer plans, the decision on tax deferred vs. after tax contributions has added another layer of complexity to the retirement savings calculus. In short, investors and savers are now faced with the question of if they should elect a Roth option and how much of their hard-earned retirement savings dollars should be put into a traditional tax deferred savings plan (i.e. tax deferred 401(k), 403(b), etc.) versus a Roth (after-tax) plan? 

The Mega Backdoor Roth is more than an excess savings strategy; it is a potential pathway to greater financial flexibility in retirement. By harnessing the power of after-tax contributions and strategic conversions, you can greatly accelerate your retirement timeline and reduce your tax burden in retirement.

Social Security is a bedrock of retirement planning, and a key planning assumption in almost every wealth planning scenario. The important 270-page was released on May 6th with headlines indicating the projected year for “insolvency” for the Social Security Trust Fund is now 2035 as the downward trend in the ratio of workers to beneficiaries continues unabated.

To help smooth out the friction associated with this transition from working to retirement, one technique can be very helpful for a multitude of reasons:  designing a “paycheck” for retirement. 

As the 2023 holiday season fades into memory, February ushers in tax preparation season. For retirees, managing federal and state income taxes becomes crucial as it often becomes a major yearly expense. Managing taxes effectively can give retirees more confidence in the sustainability and consistency of their retirement cash flow over what is usually a multi-decade retirement timeframe. 

As we wave goodbye to 2023 and say hello to 2024, it's time to reflect on resilient markets amidst economic uncertainty. The year started with negative economic indicators and aggressive Fed rate hikes to combat inflation, sparking recession predictions. Surprisingly, by mid-December, we seem to have sidestepped a predicted economic downturn. Looking ahead, with storm clouds on the economic horizon, we acknowledge that some factors are beyond our control. However, taking charge of our financial destiny, we present a checklist for tangible positive impacts on cash flow, balance sheets, and peace of mind.

Looking back to very recent history with more vivid recall can be helpful as a case study in economic & market resiliency. Was it “different” even then?  Is it “different” now?  Or will it be “this too shall pass” be vindicated yet again?

For prudent investors and most of our clients, margin borrowing is not a tactic we employ when constructing an investment portfolio and wealth plan on which a family is expected to depend for decades and beyond. However, borrowing on margin can, in select cases, be a smart move financially when used correctly, cautiously, and in very limited circumstances.

It’s challenging to change the lifelong savings habit imprinted on the psyche. But if proper wealth planning and an in-depth cash flow plan yield a very high probability of the capacity to spend more, we are strong advocates. Spending on experiences and time-saving services is often overlooked; however, it can significantly enhance a retirement lifestyle without filling up the basement and garage with more stuff. 

Generally, retirement accounts should remain fully invested, monitored, and left to grow over time. However, as interest rates have increased over the past year, Substantially Equal Periodic Payments (SEPP) have become a viable strategy for individuals to consider in unlocking the flexibility of retirement funds sooner while avoiding the burden of penalties.

Concentrated positions are a great problem to have because it usually means extremely strong growth, but there are many factors to consider when managing this situation prudently. Handling these situations is a case study of how the integration of investment management, tax planning, estate planning, and cash flow is critical

With so many recent headlines surrounding the debt ceiling, inflation, and interest rates, chatter around a global weakening of the US dollar has ramped up along with concerns by some investors. We think, while concern around this topic is troubling, it should not be the primary focus of a family’s wealth plan. Instead of focusing on US currency relative to other countries, we think families should focus on tax efficient investment and wealth plans that help maintain purchasing power of assets relative to domestic goods and services, which provides a more real-world impact on day-to-day life.  

Private information can be used to open new credit cards, apply for loans or government benefits, and file fraudulent tax returns. There are plenty of software/ services advertised today that offer some protection against this. As good as those services might be, “Deep Freeze” more commonly referred to as a “credit freeze” is a simpler and more cost-effective method for protecting personal credit and can be very impactful.

Anyone who drives down a major highway these days can attest there is no shortage of billboards from banks advertising much more attractive yields on savings accounts and CDs. Obviously, the key driver for this major interest rate shift has been the Federal Reserve’s aggressive rate tightening, which they used to battle the not-so-transitory inflation over the past 18 months. It’s pretty easy to find many banks offering one-year CDs paying between 4.5% and 5.0%+. Read more in this month’s JIC Blog.

It’s only natural that the recent bank failures and accompanying market volatility created some fear among investors.By combining clear-headed analysis of the facts and daily vigilance on the latest developments with time-tested strategies, we’re confident we can successfully navigate this storm and the inevitable storms to come.

Retirement date, social security claiming, spending assumptions, inflation – many factors impact retirement cash flow planning. However, one of the most impactful is longevity. By studying and utilizing more accurate assumptions, retirees can have a better understanding of the risks of running out of money so the factors we CAN control can blunt the risk of the factors we cannot. Read more in this month’s JIC Blog.

The recently passed Secure Act 2.0 does not have the magnitude of changes as the original Secure Act, but it does contain a few impactful changes and many minor changes. Find out what you need to know in this month's blog.

Quite often, recent retirees consider the tradeoff of working part-time versus volunteering for a cause near and dear to their hearts. It can be helpful for clients to have a general understanding of the potential after-tax “hourly rate” one is earning to evaluate this tradeoff. Learn more in this month’s blog.

For most children, their financial literacy will come from life experiences and lessons from their parents, families, and friends. Realizing this, we though it helpful to provide a jump-start to this education process through some commonsense concepts and tactics to share with any young person to help them establish a life-long and healthy relationship with money. 

In recent years, it has become more apparent than ever that politics have a great influence on the market. As the 2022 mid-term elections are upon us, we invite you to consider two historical trends: how congressional leadership has changed during prior mid-term election cycles and what it has meant for market returns in the past. We also look at what numbers show us and our feelings on allowing elections to influence wealth planning and investment goals.

When already grieving the loss of a loved one, being tasked with serving as an executor may feel stressful and overwhelming. In this month's JIC Blog, Alethea Teh Busken, Esq., Johnson Trust Company Counsel, shares some helpful information that may help you in your role as executor.

Instead of worrying about whether a recession is impending, we invite you to consider the relevance of a recession to you. Recessions, a side effect of a normal economic cycle, should already be factored into a good investment and wealth plan. In this month’s blog, we also discuss the relevance of a recession at different life stages, such as pre- and post-retirement.

In times of market volatility, we recognize the importance of helping clients achieve peace of mind. We want to share our thought process and the methodology behind the long-held philosophy that drives our Johnson Equity Income strategy. In this month's JIC blog, we will discuss why quality matters, and what Johnson evaluates as quality, in times of market volatility. 

In times of market volatility, it is natural to feel unsure about how to navigate financial waters. In this month's blog, Tony Kure discusses ways to remain stable--even when the market is not. Read more about Tony's suggestions to achieve peace of mind, including controlling what you can control and learning from history.

Despite being experts in helping clients achieve optimal financial health, we have found that finances often weave into our client's physical and mental health. Optimal wellbeing lies in a healthy balance between the three. Johnson Investment Counsel seeks to guide clients towards that balance, as we believe that optimal wellness is crucial to achieving true peace of mind. Read more about how to incorporate wellness practices in your life.

We can’t control what’s happening in the world and how it will impact portfolios, but we can focus on tactics that make sense in any environment. One such tactic is to find opportunities to save money on taxes. One way to do this is to employ a tax-loss harvesting strategy in taxable investment accounts. Think of it as a good spring cleaning of the portfolio!

We regularly engage with clients to help navigate the complex interactions between investment, tax, charitable, and estate planning matters.  We increasingly see the need to focus on the psychological and emotional issues tied to money, and how to communicate about money; whether it’s to their spouse/partner, children, or even grandchildren. 

The journey of life is full of challenges, blessings, and opportunities. Each of us walks a unique path, and we only get one chance to live an impactful life. For over five decades, clients have entrusted Johnson Investment Counsel to guide them on the journey. Read more about the distinct phases in life's journey and the planning opportunities they provide.