{"id":568,"date":"2021-05-17T00:00:00","date_gmt":"2021-05-17T00:00:00","guid":{"rendered":"https:\/\/www.retirementrefined.com\/index.php\/2021\/05\/17\/inflation-taxes-markets-concerned\/"},"modified":"2021-05-17T00:00:00","modified_gmt":"2021-05-17T00:00:00","slug":"inflation-taxes-markets-concerned","status":"publish","type":"post","link":"https:\/\/www.retirementrefined.com\/inflation-taxes-markets-concerned","title":{"rendered":"Inflation & Taxes \/\/ Markets Concerned??"},"content":{"rendered":"

Inflation<\/strong><\/p>\n

For weeks and months, we\u2019ve been discussing Inflation (interest rates<\/strong>) and Tax Increases.\u00a0<\/strong><\/p>\n

\"\"Now that most people are out and about (just look at traffic and restaurant reservations<\/strong>), pent up demand, and cash to burn, it\u2019s no surprise last week\u2019s reported inflation data<\/strong> was \u201chot.\u201d<\/em><\/strong><\/p>\n

Our Consumer Price Index<\/strong> was higher by .9%<\/strong> month over month, the largest increase<\/strong> since 1981.<\/strong>\u00a0 Much of the increase in pricing reported, was in hotel lodging, airfares, recreation and used car prices.<\/p>\n

On the \u201cProducer\u201d side, the Produce Price Index<\/strong> was up 6.2%<\/strong> year over year.<\/p>\n

As these increases were mostly expected, the debate remains for now: is inflation just temporary (transient as the Fed suggests) or are there longer-term implications?\u00a0 Depending on the articles you\u2019ve read, the opinions are all over the place.<\/p>\n

This debate won\u2019t be settled any time soon, so expect the markets to swing as various data is reported, much like a see-saw….<\/p>\n

Taxes<\/strong><\/p>\n

In the not too distant background, is the on-going debate of how President Biden\u2019s American<\/strong> Jobs Plan<\/strong> and American Families plan<\/strong> will be paid for, if passed into law.<\/p>\n

Combining the above 2<\/strong> proposed plans along with the last Stimulus,<\/strong> called the American Rescue Plan, the total is $7 Trillion of spending<\/strong> for Covid relief, economic stimulus and infrastructure funding to address the administrations vision of income\/wealth inequality, and overhaul the US economy.<\/p>\n

I\u2019ve been through a few webinars and several articles from various tax experts and the overall<\/strong> opinion is taxes WILL be going higher!<\/strong>\u00a0 We just don\u2019t know exactly who, and how much<\/strong>.\u00a0 For example, the desire to change the top income tax bracket<\/strong> to 39.6%<\/strong> for taxable incomes over $400,000<\/strong>; it has not been explained if that income is for a single-taxpayers, or a married couple filing a joint return. \"\"<\/strong><\/em><\/p>\n

For 2021<\/strong>, the top tax bracket is 37<\/strong>% for single<\/strong> taxpayers with taxable income<\/strong> over $523,000<\/strong> and Joint filers<\/strong> over $628,300.<\/strong><\/p>\n

Capital Gain taxes, stepped up bases at death, corporate income tax rates, 401K deductions and many other areas of the tax code are under consideration.<\/em><\/strong><\/p>\n

We will certainly need to go to work on your tax planning, once we have more clarity!!!!<\/p>\n

Markets Concerned?<\/strong><\/p>\n

Markets fell across the board last week, with the Dow retreated by (1.08%), the S&P 500 (1.35%), the Nasdaq Composite (2.32%) and Small Caps (2.04%).<\/p>\n

International stocks also fell as Foreign stocks were down (1.28%) and Emerging Markets (2.99%).<\/p>\n

Bond yields ended the week with a 10 Year yield of 1.63%, after reaching a high of 1.70% earlier.\u00a0 I certainly would have expected the 10 year higher with the \u201chot\u201d inflation data; however, many people believe that \u201cpost\u201d stimulus, inflation won\u2019t be a real issue.<\/p>\n

So, are investors concerned about the markets?<\/strong><\/p>\n

\"\"The markets have come an awful long way since the last economic-driven recession back in 2008 and 2009 and are still near all-time highs.\u00a0 The retreat from Covid, proved to be temporary.\u00a0 Many firms are still suggesting to be overweight stocks in most models!\u00a0 Compared to US government bond prices, I can understand that rationale, however so much MUST go right for the markets to simply continue the long term upward bias.<\/p>\n

The message, diversify your investments<\/strong>, ensuring funds for your income needs for the next couple of years are in position now.\u00a0 I suggest not being overweight any asset class at this point<\/strong>.<\/p>\n

This is a great time to review your portfolio from a risk standpoint, as well as to begin discussing possible tax issues that could impact you going forward.<\/strong><\/p>\n

\u00a0<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Inflation For weeks and months, we\u2019ve been discussing Inflation (interest rates) and Tax Increases.\u00a0 Now that most people are out and about (just look at traffic and restaurant reservations), pent up demand, and cash to burn, it\u2019s no surprise last week\u2019s reported inflation data was \u201chot.\u201d Our Consumer Price Index was higher by .9% month […]<\/p>\n","protected":false},"author":3,"featured_media":570,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"post_statement":"","post_description":"","post_cta":"","post_button":"Read More","post_button_url":"","compliance_id":"","post_disclaimer":"","footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.retirementrefined.com\/wp-json\/wp\/v2\/posts\/568"}],"collection":[{"href":"https:\/\/www.retirementrefined.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.retirementrefined.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.retirementrefined.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.retirementrefined.com\/wp-json\/wp\/v2\/comments?post=568"}],"version-history":[{"count":0,"href":"https:\/\/www.retirementrefined.com\/wp-json\/wp\/v2\/posts\/568\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.retirementrefined.com\/wp-json\/wp\/v2\/media\/570"}],"wp:attachment":[{"href":"https:\/\/www.retirementrefined.com\/wp-json\/wp\/v2\/media?parent=568"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.retirementrefined.com\/wp-json\/wp\/v2\/categories?post=568"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.retirementrefined.com\/wp-json\/wp\/v2\/tags?post=568"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}