Bonus Season | Market Averages - Compass Ion Advisors

BONUS SEASON: For many, the end of winter/early spring brings a large financial bonus. Without planning, it is often treated like a regular paycheck. The issue is that it’s not guaranteed income. Here’s what happens:

Your company withholds 22% federal (not enough)
Your 401(k) maxed out very early in 2026
Social Security taxes stopped

The result? You have extra cash flow with no plan. It disappears into lifestyle creep. What you should consider:

Fund backdoor Roth and mega backdoor strategies
Account for RSUs vesting at the same time
Plan for estimated tax payments if you have other income
Remember: next year’s bonus could be half this or $0

Your March-December cash flow is completely different than January-March. Adjust accordingly and treat your bonus strategically.

ENTITLEMENT TO MARKET AVERAGES: Remember- historic market averages are not guarantees going forward. You’ll frequently hear the Financial Entertainment Complex talk about 6%, 8%, or even 12% average annual returns. This can be unhelpful and easily compromise an investors experience.

As indicated in the chart below, of the 97 years recorded since 1928, 33 years saw negative returns. Your financial plan needs to be able to stay reasonably on track when these happen. Expecting “market averages” is a good way to be caught very unprepared for volatility.

Be an informed investor. Consider:

DID YOU NOTICE?: AI & Tech may be grabbing all the headlines, but International and Emerging Market stocks are outperforming year to date. Stay diversified!

WHO IS GETTING A DEGREE?: The college landscape looks vastly different from what it did 40 years ago. Will the trends continue?

CALCULATING SOCIAL SECURITY: Social Security survivor benefits aren’t as simple as “just wait.” The chart below shows how survivor benefits are calculated. It generally comes down to two decisions:

Did the deceased file for benefits, and when?
When does the surviving spouse file?

A few things that might be a surprise:

Survivor benefits can be reduced based on both spouses’ filing ages
If the deceased filed early, benefits may be capped at 82.5% of their FRA benefit
In some cases, waiting until full retirement age does not increase the survivor benefit

CONSIDERING OTHERS: What happens when we open our eyes to the people & needs around us: watch this.

*The views expressed represent the opinions of Compass Ion Advisors, LLC, as of the date noted and are subject to change. These views are not intended as a forecast, a guarantee of future results, an investment recommendation, or an offer to buy or sell any securities. The information provided is of a general nature and should not be construed as investment advice or to provide any investment, tax, financial, or legal advice or service to any person. The information contained has been compiled from sources deemed reliable, yet accuracy is not guaranteed.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2 available upon request or at the SEC’s Investment Adviser Public Disclosure website here. Past performance is not a guarantee of future results.