{"id":626,"date":"2021-09-20T00:00:00","date_gmt":"2021-09-20T00:00:00","guid":{"rendered":"https:\/\/www.retirementrefined.com\/index.php\/2021\/09\/20\/markets-smelling-uncertainty\/"},"modified":"2021-09-20T00:00:00","modified_gmt":"2021-09-20T00:00:00","slug":"markets-smelling-uncertainty","status":"publish","type":"post","link":"https:\/\/www.retirementrefined.com\/markets-smelling-uncertainty","title":{"rendered":"Markets Smelling Uncertainty&#8230;."},"content":{"rendered":"<p>Most stock <strong>market indexes<\/strong> were <strong>down slightly last week<\/strong>.\u00a0 This morning, when I first tuned into CNBC @ 4:45am, the <strong>futures were down over 500 points<\/strong> on the Dow, with similar pressure on the other indexes.<\/p>\n<p><strong>Last week\u2019s blog <a href=\"https:\/\/retirementrefined.com\/markets-pullback-or-higher\/\">(read it here!)<\/a><\/strong>\u00a0listed the reasons that <strong>many believe a market pull-back is<\/strong> <strong>coming.<\/strong><\/p>\n<p>This week, <strong>additional factors<\/strong> are added to the list:<\/p>\n<ul>\n<li>Barron\u2019s reported over 1 week ago the second <strong>largest Chinese property<\/strong> <strong>development firm<\/strong>, <strong>Evergrande, <\/strong>is <strong>close to defaulting on $300 billion<\/strong> of <strong>debt<\/strong>. This is worth watching as many other assets\/investments are linked to Evergrande. <img fetchpriority=\"high\" decoding=\"async\" class=\"alignright wp-image-4949\" src=\"https:\/\/www.retirementrefined.com\/wp-content\/uploads\/2022\/01\/shutterstock_1155330706-300x200.jpg\" alt=\"\" width=\"369\" height=\"246\" \/><\/li>\n<li><strong>US Debt Ceiling<\/strong> will be debated now as we need to authorize additional debt over our current limit, to pay our current bills.<\/li>\n<li>West Virginia<strong> Senator Joe Manchin<\/strong> is suggesting the US should \u201cpause\u201d on voting on the 3.5 trillion spending package until 2022. Is this a bad thing??\u00a0 If you\u2019ve reviewed the September 13<sup>th<\/sup> release by Democrats on the <strong>House and Ways Committee<\/strong>, seeing a true reality of the potential new tax increases and new rules, you may think not!<\/li>\n<\/ul>\n<p>Looks like a bit of a pullback.\u00a0 How much?\u00a0 Will it happen?\u00a0 As always, time will tell, however could be soon!\u00a0 Keep in mind, markets do surprise to the up and downside, and never go up and down as most predict.<\/p>\n<p><strong>For the week<\/strong>, the <strong>Dow<\/strong> nudged down (.05%), the <strong>S&amp;P 500<\/strong> lost (.54%), and the <strong>Nasdaq<\/strong> (.46%).\u00a0 <strong>Small caps<\/strong> bucked the trend, at least for the week, rising .45%.<\/p>\n<p><strong>Foreign<\/strong> and <strong>Emerging Market<\/strong> stocks were down (1.38%) and (2.19%) respectively.<\/p>\n<p><strong>US Treasury yields<\/strong>\u00a0moved higher, closing the week with a yield of 1.37%.<\/p>\n<p style=\"text-align: center;\"><strong>House Ways and Means Tax Proposal<\/strong><\/p>\n<p>This<strong> proposal <\/strong>definitely focuses on<strong> individuals with taxable income over $400K and joint filers <\/strong>with <strong>taxable income over $450K<\/strong>.\u00a0 If you are in one of these categories, your taxes will go much higher if the bill passes in the current form.<\/p>\n<p><em><img decoding=\"async\" class=\"alignleft wp-image-4948\" src=\"https:\/\/www.retirementrefined.com\/wp-content\/uploads\/2022\/01\/shutterstock_1381873562-300x200.jpg\" alt=\"\" width=\"341\" height=\"227\" \/>My question: if you earn those figures or slightly more, are you considered a millionaire or a billionaire that this tax package is supposed to go after?\u00a0<\/em><\/p>\n<p>The <strong>new 39.6% Federal tax bracket<\/strong> begins after <strong>individuals <\/strong>reach <strong>$400,000<\/strong> and <strong>joint filers<\/strong> <strong>$450,000<\/strong>. This is a huge increase on many small business owners.\u00a0 In <strong>2021<\/strong> for a <strong>joint filer <\/strong>to reach the <strong>highest bracket of 37%<\/strong>, <strong>taxable income needs to exceed $628,300<\/strong>.\u00a0 Enough said on that.<\/p>\n<p>In addition to the <strong>higher income taxes for income over the $400k and $450k, additional changes will occur<\/strong>:<\/p>\n<ul>\n<li><strong>Roth conversions<\/strong> <strong>will only<\/strong> be allowed until <strong>2032<\/strong>.<\/li>\n<li><strong>Capital gains tax rate<\/strong> will go up to <strong>25% from 20%<\/strong> for these income levels.<\/li>\n<\/ul>\n<p>At any income level, the <strong>ability to convert your \u201cafter-tax\u201d retirement plan dollars to a Roth IRA<\/strong> will be prohibited.\u00a0 Also, the <strong>Backdoor Roth IRA<\/strong> and the <strong>Mega-Backdoor Roth IRA<\/strong> will become a thing of the past.<\/p>\n<p>Not many investors have <strong>over $10 Million in their IRA\u2019s and 401K&#8217;s<\/strong>.\u00a0 If you do, the new law (if passed), will make certain you can\u2019t have much more. <strong>\u00a0At any age<\/strong>, if you earn over 400\/450K depending on filing status, and <strong>have over 10 million, you will have to take an RMD of 50% of the amounts between 10 and 20 million and pay tax&#8230;..\u00a0 Over $20 million, the RMD is 100% that needs to come out and pay tax.\u00a0 <\/strong><\/p>\n<p>The <strong>estate tax exemption<\/strong> will drop from <strong>$11,700,000 today to approximately $6,000,000.<\/strong><\/p>\n<p><strong>The bill contains much more!!!<\/strong><\/p>\n<p>We\u2019ll know within the next couple of months whether any of these proposed tax increases come to fruition.\u00a0 <strong>Y<\/strong><strong>ou should not make any changes now, however strategizing certainly makes sense.<\/strong><\/p>\n<p><strong><em>For example, if you earn near the $400K and $450K respectively, you may want to speak with your CPA to see if you can accelerate part of your 2022 income to 2021, to avoid some of the tax increase.<\/em><\/strong><\/p>\n<p><em><span style=\"font-size: 8pt;\">Commonwealth Financial Network\u00ae does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.<\/span><\/em><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Most stock market indexes were down slightly last week.\u00a0 This morning, when I first tuned into CNBC @ 4:45am, the futures were down over 500 points on the Dow, with similar pressure on the other indexes. Last week\u2019s blog (read it here!)\u00a0listed the reasons that many believe a market pull-back is coming. This week, additional [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":629,"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\/626"}],"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=626"}],"version-history":[{"count":0,"href":"https:\/\/www.retirementrefined.com\/wp-json\/wp\/v2\/posts\/626\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.retirementrefined.com\/wp-json\/wp\/v2\/media\/629"}],"wp:attachment":[{"href":"https:\/\/www.retirementrefined.com\/wp-json\/wp\/v2\/media?parent=626"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.retirementrefined.com\/wp-json\/wp\/v2\/categories?post=626"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.retirementrefined.com\/wp-json\/wp\/v2\/tags?post=626"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}