I don’t know about you, but I’m ready for this 5-week stock market losing streak to come to an end. Will this be the week, or is there more down-side? If you’ve been reading our weekly retirement report, you’re aware I don’t make predictions.
Stocks often rocket too high, increasing investor enthusiasm. When the trend reverses, stocks often crater too low, dampening investor enthusiasm. Many investor decisions are negatively impacted by stretched enthusiasm, in either direction, forcing some investors to make poor short-term decisions.
The most recent high for the S&P was 4818.62 on January 4, 2022. As of last Friday, the index sits at 4204.31. The S&P 500 is off 12.75% from the all-time high.
The Nasdaq composite most recent high was 16,212.23 on November 22, 2021. As of last Friday, the index is at 12,843.81. The Nasdaq is off 20.77%.
Have we hit a stock market bottom? I’ve been thinking we’re in the process of putting in the bottom. Investors are concerned, of course, about escalating war events and this week, the Fed is front and center.
It is widely anticipated that Powell and Company will raise rates by .25%. What’s most important is the press conference that follows Wednesday’s rate decision. What he says about future influences on rate decisions will matter to the markets.
Fed Chairman Powell has the challenging job of easing back on the throttle, fighting the current level of inflation with the added concern that the Russia/Ukraine conflict will slow our economy.
Markets tend to bottom when the known bad news is out on the table. What’s known is we have a Fed determined to raise rates. We have a war that has many concerned about a worsening impact on our economy. We’ve seen oil spike to as high as 130, then back down to 104.75 (as I’m typing). A lot of bad news is in fact on the table already. Hopefully All!
Beneficiary IRA Rule Clarification
The Secure Act became effective January 1, 2020. Major changes were made to people inheriting IRA accounts.
If you inherited an IRA prior to 2020, you are under the “old” rules. If you inherited an IRA beginning January 1, 2020 and going forward, you are under the new Secure Act rules.
We now have Secure Act clarification on the 10-Year Rule for Non-Eligible Beneficiaries.
An eligible beneficiary includes the following:
- Owner’s surviving spouse
- Owner’s minor child
- A disabled individual
- Chronically ill individual
- Any other individual who is not more than 10 years younger than the IRA owner
*Everyone else is considered a Non-Eligible Beneficiary*
All non-eligible beneficiaries need to know:
- Did you inherit the IRA AFTER or BEFORE the owner began taking Required Minimum Distributions?
If the owner was either taking Required Minimum Distributions or required by age, you MUST:
- Begin taking an annual Required Minimum distribution each year beginning with the year after death.
- Clear out the entire account by the end of the 10th year, following the year of death.
If the owner was NOT taking Required Minimum Distributions or required to do so, you:
- Are not required to take any annual distributions
- However, you still must clear out the entire account by the end of the 10th year, following the year of death.
Are you under the old rules, meaning you’re a non-eligible beneficiary of an inherited IRA? If so, you are currently taking annual Required Minimum Distributions. Some good news for you! The life expectancy tables were changed even for Inherited IRA’s. You should see a slight reduction in your RMD requirement going forward!
If you or anyone else you know has questions on how these rules will impact your current situation or future heirs, please do not hesitate to reach out to schedule a complimentary consultation.