A Market Selloff Triggered By A Fed Policy Error
The Fed made a significant policy error last week by deciding not to cut the Fed Funds rate and the stock market is now responding to that error via the selloff we have seen over the past week. Unfortunately, this policy error is nothing new. Throughout history, the Fed typically waits too long to begin reducing interest rates after inflation has already abated and they seem to be on that path again.
2024 Market Outlook: Investors Are In For A Few Surprises
Investors have to be ready for many surprises in 2024. While the US economy was able to escape a recession in 2023, if anything, it has increased the chances of either a recession or a market pullback in the first half of 2024.
Federal Disaster Area Penalty-Free IRA & 401(k) Distribution and Loan Options
Individuals who experience a hurricane, flood, wildfire, earthquake, or other type of natural disaster may be eligible to request a Qualified Disaster Recovery Distribution or loan from their 401(k) or IRA to assist financially with the recovery process. The passing of the Secure Act 2.0 opened up new distribution and loan options for individuals whose primary residence is in an area that has been officially declared a “Federal Disaster” area.
Biden's New SAVE Plan: Lower Student Loan Payments with Forgiveness
With student loan payments set to restart in October 2023, the Biden Administration recently announced a new student loan income-based repayment plan called the SAVE Plan. Not only is the SAVE plan going to significantly lower the required monthly payment for both undergraduate and graduate student loans but there is also a 10-year to 25-year forgiveness period built into the new program. While the new SAVE program is superior in many ways when compared to the current student loan repayment options, it will not be the right fit for everyone.
Starting in 2024, 401(k) Plan Will Be Required to Cover Part-time Employees
In the past, companies have been allowed to limit access to their 401(k) plan to just full-time employees but that is about to change starting in 2024. With the passing of the Secure Act, beginning in 2024, companies that sponsor 401(K) plans will be required to allow part-time employees to participate in their qualified retirement plans.
2023 RMDs Waived for Non-spouse Beneficiaries Subject To The 10-Year Rule
There has been a lot of confusion surrounding the required minimum distribution (RMD) rules for non-spouse, beneficiaries that inherited IRAs and 401(k) accounts subject to the new 10 Year Rule. This has left many non-spouse beneficiaries questioning whether or not they are required to take an RMD from their inherited retirement account prior to December 31, 2023. Here is the timeline of events leading up to that answer
Requesting FICA Tax Refunds For W2 Employees With Multiple Employers
If you are a W2 employee who makes over $160,200 per year and you have multiple employers or you switched jobs during the year, or you have both a W2 job and a self-employment gig, your employer(s) may be withholding too much FICA tax from your wages and you may be due a refund of those FICA tax overpayments. Requesting a FICA tax refund requires action on your part and an understanding of how the FICA tax is calculated.
Fewer 401(k) Plans Will Require A 5500 Audit Starting in 2023
401(K) plans with over 100 eligible plan participants are considered “large plans” in the eyes of DOL and require an audit to be completed each year with the filing of their 5500. These audits can be costly, often ranging from $8,000 - $30,000 per year.
Starting in 2023, there is very good news for an estimated 20,000 401(k) plans that were previously subject to the 5500 audit requirement. Due to a recent change in the way that the DOL counts the number of plan participants for purposes of assessing a large plan filer status, many plans that were previously subject to a 401(k) audit, will no longer require a 5500 audit for plan year 2023 and beyond.
