Weekly Observations for 1/5/2018 — Tax Savings and Rising Interest Rates

Welcome to 2018! I absolutely love every New Year, and I am excited to review goals and imagine new ways to serve my family, community, and clients.

Here are a few of the things that crossed my desk during this first week of 2018:

–  We published a summary of the new tax bill this week and highlighted a few of the tax reduction strategies we are setting up for clients in 2018. I estimate we’ll be able to further reduce taxes by $5,650 per year for a typical client by using these strategies. And that’s on top of the 50% wealth increase we already achieve through lifetime tax reduction.

–  Short-term interest rates have risen significantly during the past year. This is welcome news for more conservative investors that need yield while reducing the higher-than-usual risks of today’s stock market. 12-month CD and Treasury rates are currently at 1.80% — a nice change from less than 1% last year, and a really nice change from the typical bank account!

–  Last week I mentioned the overlooked risks of target-date retirement funds. For a little reinforcement, here is my colleague, Roger Wohlner, reiterating that these types of funds really shouldn’t be used by those nearing retirement. Although they can work well for young investors.

–  529 plans can now be used to pay for elementary and secondary private school tuition — not just college — as part of the new tax bill. I’m not saying you should, but you can.

–  Here’s an interesting historical and current look at the relative value between commodities and stocks. Thankfully, not every asset has been going up lately, resulting in a number of opportunities for sound investment crossing my desk. I plan to highlight a few in next week’s observations.

Please let me know how I can best serve you and bring increasing value to your wealth management in 2018.