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Looking at Taxes in 2024

Ringing in the new year puts us nearly a year into the Tax Cuts and Jobs Act. It leaves us two years to get things done under the current options. Tax rates will remain low, which is a good time to get money out of IRAs as needed. For some with a large IRA with Roth conversions, it’s a good time to plan what to do with that money. Looking ahead to 2026, some tax changes (barring Congressional action) are worth considering as you make decisions now.

  • Higher income tax rates will be in effect.
  • The tax rates on IRA withdrawals will increase, so it is worth considering Roth conversions now.

There are also some positive changes for 2024 you won’t want to miss. You can catch up here. The bottom line is that it would be good to give some attention to this as it relates to your financial plan in the short term. Contact your advisor today to review your current plan and consider adjustments.

Alignment Gap

As we enter the New Year, we are excited to look ahead and re-craft our vision for the coming year. What benchmarks do we want to reach? What experiences do we want to have? What steps forward do we want to take as a family?

There’s one question we would encourage you to consider as you ponder these questions: are my decisions aligned with my vision?

As much as 2023 That Fits on One Page

We found this infographic interesting. It also provides a good perspective on the year.

Speaking of 2023

A few areas worth looking at related to the economy in 2023 as we enter 2024 are:

Unemployment: 216,000 jobs were created last month, and the unemployment rate stayed at 3.7%. That’s the 23rd straight month in which the unemployment rate has remained below 4%, the longest stretch since the late 1960s – which should tell you that the economy is in a healthy place. All in all, 2023 was another banner year for job creation, with 2.7 million jobs created.

Job Growth: we did see some revisions to job creation in prior months, but that’s why the 3-month average is useful, and that’s at 165,000 now. It’s obviously fallen since the beginning of 2023 when job creation was high.

Income Growth: Over the last three months, aggregate income growth has been running at an annual rate of 4.3%. Additionally, inflation has pulled back significantly over the last few months, primarily thanks to lower gas prices but with broad support from many other areas. If you adjust aggregate income growth for inflation, “real” income growth over the last three months is at an annual rate of 3.7%! That punctuates the overall health of the economy.

Business Briefing
  • Fed minutes: Federal Reserve policymakers determined at their last meeting that inflationary pressures were easing, but they stressed the importance of keeping interest rates high “until inflation was clearly moving down sustainably” toward the central bank’s 2% target, according to minutes from their last meeting released Wednesday. The Fed held rates unchanged for the third time but indicated they expected to make three rate cuts in 2024. Fed Chair Jerome Powell indicated after the meeting that the central bank was probably ending its aggressive campaign to raise borrowing costs to slow the economy and contain inflation, but the minutes indicated that some officials thought more hikes were “possible.” (The Associated Press)
  • Wall Street poised to end 9-week winning streak: Stocks struggled in the new year, with futures edging lower early Friday ahead of the December jobs report. Futures tied to the Dow Jones Industrial Average were down 0.2% at 7 a.m. ET on Friday. S&P 500 and the Nasdaq futures were down 0.3%. The Dow changed little on Thursday, while the S&P 500 and the tech-heavy Nasdaq fell 0.3% and 0.6%, respectively. The three major averages are on track to snap nine-week winning streaks in a rough start to 2024 trading after 2023’s gains. (The Wall Street Journal)
Starting the New Year on a High

For one 13-year-old boy, 2024 is the year for breaking records. He is believed to be the first person in history ever to beat one of the oldest video games in society: Tetris. Nearly 40 years after its development, an Oklahoma teen recorded a score of 999999 points, freezing the game as the low-tech hardware can’t continue to process a higher score. It took him 38 minutes and 157 levels. Watch here for the moment he beats the game. Here’s to reaching goals in 2024!