Planned Solutions

In this episode of the Planned Solutions Incorporated Podcast, The International Monetary Fund (IMF) has lowered its economic growth forecast in recent weeks but continues to predict positive growth rates for the majority of the globe. However, the expected pace of economic growth around the globe, as well as in the US, is fairly low compared to historical rates. This appears to be a middle ground between predicting a recession and predicting a return to more normal economic growth rates.

Also, US inflation has declined for nine consecutive months from a high of 9.1% in June 2022 to just 5.0% in March 2023. Large contributors to the decline in the rate of inflation include food and

energy prices, with energy prices turning negative. However, services price inflation remains high supported by shelter prices which now account for nearly half the headline inflation rate.

And, Zero percent credit card offers, which allows the cardholder to

borrow for a specific term, may be attractive for those looking to

make a large purchase or to transfer an existing credit card

balance. However, it is important to read the terms of service

carefully and have a plan to pay off the balance within the stated

period or the strategy could backfire resulting in high interest charges.

Plus a look at the Planned Solutions Incorporated Office Bulletin Board- These are exciting times in Sacramento as our premier professional sports franchise, the Sacramento Kings, has made the playoffs for the first time in sixteen years. The reward is that they get to face the defending NBA champions, the Golden State Warriors. However, after two games the Kings now lead the series two games to zero with the series now going back to San Francisco for the next two games. As long-time Kings supporters, all of us at Planned Solutions are excited to have our team in the NBA playoff mix and are thrilled with the positive impact that it is having on our city.

Chase Armer's book- Financial Planning Insights is now available at:

https://www.amazon.com/Financial-Planning-Insights-Decades-Planner/dp/1098306279?ref_=ast_author_mpb

To subscribe to the Personal Finance Review (the written form of all the content we discuss on the podcast) please e-mail [email protected]

The Personal Finance Review is published and distributed biweekly by Planned Solutions, Inc. for informational purposes only. Please seek the advice of a qualified financial planner before taking any action.

Planned Solutions, Inc.

In this episode of the Planned Solutions Incorporated Podcast, Picking the right credit card often depends on how a cardholder plans to use the card. For most people who pay off their credit card balances each month the interest rate charged by the credit card should be the last consideration. Instead, it is advisable to weigh the

rewards that the credit card offers against the annual cost of the card, such as any annual fees that the card may charge.

Also, The number of existing homes sold in February increased 14.5% from the prior months as the Spring buying season appears to be heating up early. Home prices remain resilient, down just 0.2% from the prior year. It appears that declining interest rates have unlocked some demand from potential homebuyers as the level of interest rates, and not prices, have driven home demand in recent months.

And, It is common for retirement account owners to list their minor children as beneficiaries of their retirement accounts. However, there can be some drawbacks to this which should be explored before doing so as minors must be assigned a guardian who will oversee the funds until the minor comes of age. Therefore, it is important to think through how the funds will be transferred, managed, and distributed as well as explore other options that may be more in line with the account owner’s financial goals.

Plus a look at the Planned Solutions Incorporated Office Bulletin Board- This probably goes without saying in this day and age, but don’t believe everything that you read, or even watch, online. One of the most common tax mistakes is a result of taxpayers not understanding how the tax withholding system works. To be fair, the tax withholding system in the US in so antiquated that it is extremely confusing as it reflects the US workforce from fifty years ago when one-income households were the norm. During the period of one-income households, the system was straightforward. If an employee was not married, they selected single and if they were married, they

selected married. If they selected married the assumption was that their spouse did not work so their income would be spread across the more favorable married tax bracket resulting in less tax, and therefore less tax withholding. However, today where two-income households are more common this can create problems. If both spouses select married, they will have less income tax withheld based on the assumption that their spouse does not work, which is incorrect in this case. Therefore, married taxpayers in two-income households should select single, or married but withhold at the higher single tax rate if that option is available. This is counterintuitive as it requires that a married taxpayer select single on their tax withholding election, but unfortunately, that is how the system is set up.

Chase Armer's book- Financial Planning Insights is now available at:

https://www.amazon.com/Financial-Planning-Insights-Decades-Planner/dp/1098306279?ref_=ast_author_mpb

To subscribe to the Personal Finance Review (the written form of all the content we discuss on the podcast) please e-mail [email protected]

The Personal Finance Review is published and distributed biweekly by Planned Solutions, Inc. for informational purposes only. Please seek the advice of a qualified financial planner before taking any action.

Planned Solutions, Inc.

In this episode of the Planned Solutions Incorporated Podcast, The recent bank run that caused three large banks to fail in the US this year is a classic case of a Prisoner’s Dilemma. A Prisoner’s Dilemma is a game theory concept that illustrates how the optimal strategy for participants may lead to a less-than-optimal outcome that leaves all involved worse off. Fortunately, the Federal Reserve in the US was created to be a lender of last resort to stop bank runs from spreading and impacting other institutions

Also, The recent bank run in the US has caused two banks to fail and a third is under tremendous stress. A review of these banks shows that they were outliers in terms of poor risk management on their reserves as well as having a high percentage of deposits that were not FDIC insured. The remainder of large and mid-sized banks appear to have been far more conservative and are likely to be more resilient.

And, With the recent bank failures, the Federal Deposit Insurance Corporation (FDIC) has been in the news. Therefore, this is a good time for depositors to review the FDIC insurance limits and make sure that their deposits at their banks do not exceed the limits. This may include reducing the balance held at each bank, reviewing the title of bank accounts to maximize the FDIC insurance limit, and knowing which account types are covered by the FDIC and which are not.

Plus a look at the Planned Solutions Incorporated Office Bulletin Board- This probably goes without saying in this day and age, but don’t believe everything that you read, or even watch, online. The recent bank turmoil has been exacerbated by false or misleading statements that have been posted online. This includes several cases where only a portion of a video interview is posted causing the statements made to be taken out of context or for the statements to lack the nuance to understand what the person being interviewed is trying to convey. In many cases, this misinformation is being spread by short-sellers (investors betting against a stock or group of stocks) in an attempt to sow panic and cause the prices of the investment that they are shorting to decline.

This is not to say that one should bury their head in the sand during uncertain market times. It is important to remain informed and take well-thought-out action when it is warranted. This requires getting news from many sources, including more reputable sources that still engage in fact-checking, and from many different angles to understand what is really going on.

Chase Armer's book- Financial Planning Insights is now available at:

https://www.amazon.com/Financial-Planning-Insights-Decades-Planner/dp/1098306279?ref_=ast_author_mpb

To subscribe to the Personal Finance Review (the written form of all the content we discuss on the podcast) please e-mail [email protected]

The Personal Finance Review is published and distributed on a biweekly basis by Planned Solutions, Inc. for informational purposes only. Please seek the advice of a qualified financial planner before taking any action.

Planned Solutions, Inc.

In this episode of the Planned Solutions Incorporated Podcast, With interest rates are significantly higher than they were last year, this is a good time for savers to review their cash management strategies to ensure that they are maximizing the interest rates they are earning on their savings. This may involve shifting money to account

types that pay higher yields, comparing the rates that are offered by different institutions, and ensuring that accounts are earning the highest amount offered by the institution.

Also, Investment tax losses may allow taxpayers to claim a tax deduction on their income taxes. However, the impact of these losses is often somewhat muted. Tax losses are first used to

offset taxable gains. Then up to $3,000 of any remaining net loss may be used to offset the taxation of other income. Finally, any excess unused losses are carried forward to the following tax year.

And, When an individual passes away their non-retirement assets often receive a step up in tax basis. This means their beneficiaries

inherit the property as of the date of death with no built-in tax gain

or loss. However, to take full advantage of this provision in the tax code, it is important to be able to substantiate the value of the property at the date of death. In the case of real estate assets, this

often requires an appraisal by a professional, or else the value may be open to debate.

Plus a look at the Planned Solutions Incorporated Office Bulletin Board- The IRS finally provided guidance that State inflation relief payments, including the California Middle-Class Tax Refund payments, are not subject to federal taxation.

Recently we posted that taxpayers who live or work in the many California counties that were included in the Presidentially declared disaster area will have until May 15th to file their income taxes and pay any amount due. This deadline has since been extended to October 16th by the IRS and the State of California is expected to conform to the change. Of course, this does not mean that taxpayers must wait to file and, in many cases, will be better off filing earlier rather than waiting until the extended deadline.

Chase Armer's book- Financial Planning Insights is now available at:

https://www.amazon.com/Financial-Planning-Insights-Decades-Planner/dp/1098306279?ref_=ast_author_mpb

To subscribe to the Personal Finance Review (the written form of all the content we discuss on the podcast) please e-mail [email protected]

The Personal Finance Review is published and distributed on a biweekly basis by Planned Solutions, Inc. for informational purposes only. Please seek the advice of a qualified financial planner before taking any action.

Planned Solutions, Inc.

In this episode of the Planned Solutions Incorporated Podcast, The US inflation rate declined slightly in January as goods prices continued to decline but services prices climbed. This will likely cause the inflation focus to shift from goods to services going forward as service prices will need to decline for inflation to return to its longer-term average. Within the services category, the cost of shelter is significant given the large percentage of household spending that goes to paying for shelter.

Also, The Secure Act 2.0 made several changes to retirement plan catch-up contributions, including increasing the amount of the catch-up contribution for some savers. The amount of the catch-up allowed for IRAs will increase with inflation after 2024. In addition, in 2025 the catch-up will be increased by $10,000, or 1.5 times the normal

catch-up amount, for those aged 60-63 saving in an employer-sponsored retirement account.

And, Reverse mortgages have become more and more popular over the years as many homeowners seek to access their home equity to

cover living expenses while continuing to live in the home and not having to make a monthly payment. However, the tax treatment of the interest that accrues on a reverse mortgage can be tricky as the interest is generally not paid until the home is sold and the tax deductibility depends on how the funds received were used.

Plus a look at the Planned Solutions Incorporated Office Bulletin Board- The IRS finally provided guidance that State inflation relief payments, including the California Middle-Class Tax Refund payments, are not subject to federal taxation.

In response to the storms that hit many parts of California in late 2022 and early 2023, the Federal Emergency Management Agency (FEMA) has provided an extension of time to file tax returns, make payments of tax due, and make retirement plan contributions from April 17th to May 15th for taxpayers who live or work in the impacted counties.

Chase Armer's book- Financial Planning Insights is now available at:

https://www.amazon.com/Financial-Planning-Insights-Decades-Planner/dp/1098306279?ref_=ast_author_mpb

To subscribe to the Personal Finance Review (the written form of all the content we discuss on the podcast) please e-mail [email protected]

The Personal Finance Review is published and distributed on a biweekly basis by Planned Solutions, Inc. for informational purposes only. Please seek the advice of a qualified financial planner before taking any action.

Planned Solutions, Inc.

In this episode of the Planned Solutions Incorporated Podcast, The Weekly Economic Index (WEI) is a high-frequency (updated weekly rather than monthly or quarterly) economic indicator that has a strong track record of predicting the pace of US economic growth. Currently, the WEI is forecasting slow economic growth but is not yet predicting a recession in 2023. However, the path of this index should be watched closely given the mixed economic signals from other data.

Also, One of the new changes under the Secure Act 2.0 will require that high-income earners (those who earned $145,000 or more from their employer in the previous year) have their catch-up contributions allocated to the Roth option. This will make the additional contribution taxable to the employee even though the money will be allocated to their retirement plan rather than their paycheck.

And, The electric vehicle tax credit has been expanded to include more makes and models. However, the new rules also come with some significant restrictions that may make many taxpayers ineligible. First, there is now an income limit that will cause some taxpayers to be ineligible for the tax credit due to their income level. Second, there are some new convoluted rules about where the vehicle was manufactured and the composition and sourcing of minerals in the vehicle’s battery. These new rules may make it difficult to determine if the credit will apply to a given vehicle.

Plus a look at the Planned Solutions Incorporated Office Bulletin Board- Chase was the presenter at the most recent Financial Planning Association of Northern California meeting where he gave a presentation on economic data and trends.

Many investment companies have issued tax forms for retirement account distributions but have not yet posted the tax forms for non-retirement accounts.

Chase Armer's book- Financial Planning Insights is now available at:

www.amazon.com/Financial-Planning…1586894022&sr=8-1

To subscribe to the Personal Finance Review (the written form of all the content we discuss on the podcast) please e-mail [email protected]

The Personal Finance Review is published and distributed on a biweekly basis by Planned Solutions, Inc. for informational purposes only. Please seek the advice of a qualified financial planner before taking any action.

Planned Solutions, Inc.

In this episode of the Planned Solutions Incorporated Podcast, Consumer prices have been in focus for the past several years as the Consumer Price Index (CPI) reported above-average increases in prices. However, what has been lost in this data is the even larger increase in the Producer Price Index (PPI) which measures prices paid by businesses for raw materials. This has caused profit margins to be squeezed as input prices increased faster than end prices. However, this pressure appears to be dissipating as producer prices have declined.

Also, With home electricity prices having increased and Congress extending the 30% tax credit for solar panels, many people are once again considering investing in solar. In deciding whether or not to install solar it may be beneficial to determine the cost/benefit in terms of the time period it will take to break even and the time period that the solar panels are expected to last.

And, The Secure Act 2.0 has expanded access to Roth accounts for many retirement savers. First, the option to elect Roth status is expanded to SIMPLE IRAs and SEP IRAs which were previously not allowed to make Roth contributions. Second, the matching contributions made by employers may be directed to a Roth account as long as the taxpayer pays the taxes on the contributions when made and there is no vesting schedule associated with the account.

Plus a look at the Planned Solutions Incorporated Office Bulletin Board- The Internal Revenue Service announced that Monday, January 23, 2023, will be the beginning of the 2023 tax season (the tax when tax returns may be submitted and processed for the 2022 tax year.) In addition, taxpayers will have three extra days to file this year, with the deadline on April 18, 2023, due to the normal deadline falling on a holiday

Chase Armer's book- Financial Planning Insights is now available at:

www.amazon.com/Financial-Planning…1586894022&sr=8-1

To subscribe to the Personal Finance Review (the written form of all the content we discuss on the podcast) please e-mail [email protected]

The Personal Finance Review is published and distributed on a biweekly basis by Planned Solutions, Inc. for informational purposes only. Please seek the advice of a qualified financial planner before taking any action.

Planned Solutions, Inc.

In this episode of the Planned Solutions Incorporated Podcast, the passing of the Secure Act 2.0 has made several changes to the rules governing retirement accounts. Among these changes is the change in the Required Minimum Distribution (RMD) rules which extend the age at which retirement account owners will need to take distributions to age 73 in 2023. The Secure Act 2.0 also solidifies and expands the rules related to Qualified Charitable Distributions (QCDs) which allows for direct contributions from taxable retirement accounts to a qualified charity.

Also, There have been a lot of changes to student loan rules over the past few years which may not have been front of mind for borrowers subject to the payment forbearance. Therefore, 2023 may be a good year for student loan borrowers to review their student loan options, recertify their income for Income-Driven Repayment plans, apply for student loan forgiveness, and explore new tax-free student loan payment options.

And, The Secure Act 2.0 has created a new opportunity for money accumulated in 529 educational savings plans to be transferred to a Roth IRA for the 529 plan beneficiary. The maximum amount that can be transferred over the beneficiaries lifetime is $35,000 and the transfers must conform to the Roth IRA contribution rules which will require financial planning to meet the requirement of the new rules. However, it does offer a potentially valuable new option for money still in 529 plans after the beneficiaries' education has been paid for.

Plus a look at the Planned Solutions Incorporated Office Bulletin Board- Before preparing your 2022 income tax return(s) it is important to make sure that you have all of the tax forms and other tax information that you need. In some cases, this may mean being patient until all of your investment forms have been issued. In other cases, it may mean being careful to thoroughly go through your mail looking for tax forms. For example, mortgage companies often send out Form 1098, which reports the interest paid during the year with the monthly mortgage statement. So, it is important to sort through all of the pages in the mailing to see if your tax forms were included with the most recent statement. Also, more and more companies are posting tax forms online rather than mailing them. Our tax organizer, or your tax return from the previous year, may be used to compare the information that was reported in the prior year with the tax forms that have been received to see if anything is missing.

Chase Armer's book- Financial Planning Insights is now available at:

www.amazon.com/Financial-Planning…1586894022&sr=8-1

To subscribe to the Personal Finance Review (the written form of all the content we discuss on the podcast) please e-mail [email protected]

The Personal Finance Review is published and distributed on a biweekly basis by Planned Solutions, Inc. for informational purposes only. Please seek the advice of a qualified financial planner before taking any action.

Planned Solutions, Inc.

In this episode of the Planned Solutions Incorporated Podcast, Foreign stocks have outperformed US stocks by 12% over the past two months. This represents a major shift from what has been a long and fairly consistent period of higher returns from US stocks. This recent shift in returns is partially explained by a weakening US dollar compared to other major currencies. However, foreign stocks also appear to offer more attractive valuations than US stocks at this time.

Also, The pace of existing home sales has plummeted in the US as higher interest rates have made homes less affordable for many buyers. However, prices have remained resilient, increasing 3.5% year-over-year. This shows a disconnect in the housing market as demand wanes but sellers are choosing to stay put rather than reduce the price, they will accept for their home leading to fewer and fewer completed sales.

And, With interest rates continuing to rise it is important for households to make some changes to their spending patterns. The buy now, pay later strategy may no longer be attractive as a higher mortgage, auto loan, and credit card interest rates may substantially increase the total costs. In other cases, it may be preferable to buy now before interest rates fall and prices potentially rise with a strategy to aggressively pay down balances.

Plus a look at the Planned Solutions Incorporated Office Bulletin Board- We will soon be sending out our tax engagement letters and tax organizers as we begin to prepare for the upcoming tax season. If you have any questions about the packet or the process of gathering your tax documentation for the 2021 tax filing season, please do not hesitate to send us an e-mail or give us a call.

Chase Armer's book- Financial Planning Insights is now available at:

www.amazon.com/Financial-Planning…1586894022&sr=8-1

To subscribe to the Personal Finance Review (the written form of all the content we discuss on the podcast) please e-mail [email protected]

The Personal Finance Review is published and distributed on a biweekly basis by Planned Solutions, Inc. for informational purposes only. Please seek the advice of a qualified financial planner before taking any action.

Planned Solutions, Inc.

In this episode of the Planned Solutions Incorporated Podcast, The US inflation rate declined to 7.1% in November, the fifth consecutive month of decline. While food and energy inflation remain high year-over-year, both show shorter-term improvement with the pace of the increase in food prices declining and energy prices dropping in four of the last five months. Meanwhile, services prices have increased, but not by enough to offset the weakness in goods prices, which is a positive sign that inflation may continue to decline.

Also, 2022 may be a good year for tax loss harvesting. With the difficult year in the financial markets, many investment holdings may have unrealized tax losses. These losses can be converted into

realized tax losses, which can be deducted on an income tax return, by selling the investment and reinvesting the money into a different investment.

And, The amount that an individual can give to another individual in

a year without having to file a gift tax return will increase from

$16,000 in 2022 to $17,000 in 2023. Married couples may also

engage in gift-splitting in which each gives an individual the

amount of the gift tax exclusion so that the total that can be gifted in a year will increase from $32,000 in 2022 to $34,000 in 2023.

Plus a look at the Planned Solutions Incorporated Office Bulletin Board- With the holidays quickly approaching, we want to make sure you are aware of our holiday schedule for this year.

December 26th Closed

December 30th Closed

Given the above holiday schedule, as well as the holiday schedule of many of the companies that we work with, we ask that any forms or other requests that must be completed before year-end be submitted as soon as possible. If any paperwork or requests come in close to the end of the year, we will make our best efforts to process the forms or fulfill the requests but cannot guarantee that it will be completed in time due to factors beyond our control.

Chase Armer's book- Financial Planning Insights is now available at:

www.amazon.com/Financial-Planning…1586894022&sr=8-1

To subscribe to the Personal Finance Review (the written form of all the content we discuss on the podcast) please e-mail [email protected]

The Personal Finance Review is published and distributed on a biweekly basis by Planned Solutions, Inc. for informational purposes only. Please seek the advice of a qualified financial planner before taking any action.

Planned Solutions, Inc.