On Wednesday, January 11th from 4:00-5:30 pm ProVise will host a Zoom event for our clients and friends. Eric Ebbert, CFP®, our CEO, and Daniel Mannix, CFA®, Chair of the Investment Committee, will review 2022 (one to forget) and look ahead to what to expect in 2023 (one that will be better…we hope). Ray Ferrara, CFP®, our Founder and Executive Chair, will host the meeting and discuss the new SECURE 2.0 Act which makes 92 changes to retirement plans. Because there is limited seating you need to enroll by sending your name, email address, and mobile number to info@provise.com. We will then send you the link.

If you have a question you would like to ask, you can submit it with the request, or on the day of the seminar, you can use the chat feature. Any questions we are unable to answer live will be answered later and sent by email. If you have a friend you would like to invite, please pass this announcement on to them.  For those that are unable to attend, we will record the webinar and send you a link about a week later to your email. Should you have any questions about the webinar itself, please reach out to Ray at ferrara@provise.com. We look forward to having you join Eric, Daniel, and Ray for this informative webinar.


As the holiday season approached, all Congress could do was sing, “All I want for Christmas is everything I couldn’t pass before” as they passed a $1.65 billion omnibus bill with 4,155 pages that continued the government through September 2023. Included in the bill were many of the potential changes we discussed earlier this year, also known as SECURE Act 2.0. These changes covered 350 pages on retirement planning and threw in lots of pork with a vote of 225-201 mostly along party lines in the House and by a more bipartisan vote of 68-29 in the Senate.

Setting Every Community Up for Retirement Enhancement (SECURE) Act 2.0 has made significant shifts to both those accumulating for retirement and those in retirement. In fact, there are 92 changes. Here are highlights and several planning opportunities.

Before the original SECURE Act, Required Minimum Distributions (RMDs) had to begin the year one turned age 70 ½ or no later than April 1st of the following year. However, the SECURE Act increased the RMD age to 72. SECURE 2.0 once again raised the RMD age to 73 beginning in 2023 and then to age 75 in 2033. This will allow more time for the money to grow on a tax-deferred basis and provide greater flexibility in withdrawals which may help reduce the income tax burden. Why wait 10 years before raising it again? To make this bill more appealing, by not increasing the debt any more than necessary, this delay provides more income to the government over the next 10 years.

Under prior law, those age 50 and older had a catch-up provision allowing them to put more money into retirement plans. In 2022, a 401(k) or 403(b) participant could put in an extra $6,500 over and above the regular contribution limit of $20,500 for a total of $27,000. The new law states that starting in 2023, both the base amount and the catch-up amount are indexed for inflation and the catch-up jumps to $7,500 and $22,500 for the base amount for a total of $30,000.

Beginning in 2025, those ages 60, 61, 62, and 63 may put in the greater of $10,000 or 150% of the current catch-up contribution amount. Congress created a “catch” to the “catch-up”. If the participant makes over $145,000, then the catch-up must go into the Roth 401(k) and loses the tax deduction. While it might be seen as a negative in the short-term, the catch-up provisions to the Roth 401(k) provide some tax diversification in retirement.

Unfortunately, the $1,000 catch-up contribution for an Individual Retirement Account (IRA) has not changed since 2006. However, beginning in 2024, it will finally be indexed for inflation.

For those that have reached age 70 ½, they have had the option to make up to $100,000 in Qualified Charitable Distributions (QCDs). By giving directly from the IRA to a qualified charity, the IRA owner does not have to declare this distribution as income, and it qualifies for the RMD. Correspondingly, the IRA owner cannot deduct the charitable contributions.

The QCD increases to $200,000 in 2023 and is adjusted for inflation annually beginning in 2024. Further, a one-time gift of $50,000 can be made to a charitable vehicle that will benefit the IRA owner and/or spouse – think Charitable Gift Annuity or Charitable Remainder Trust. This $50,000 will be part of the annual limit. By using the IRA for charitable purposes rather than using cash, it reduces your Adjusted Gross Income (AGI) income and may prevent the taxpayer from paying a higher premium for Medicare.

Previously, matching employer contributions had to go to a tax-deferred account rather than a Roth account. Going forward a participant can choose tax-deferred or tax-free.  This provides the participant with tax planning that was restricted in the past. Further, Roth 401(k) withdrawals will be treated like a Roth IRA, meaning that there will be no annual RMDs required. That is to say, the Roth 401(k) distribution never has to be taken until the owner’s death. In the old world, the Roth 401(k) distributions from a 401(k) had to be taken at the same time as regular 401(k) distributions.

SECURE 2.0 requires all new employers with a 401(k) or 403(b) to automatically enroll new employees at a 3% contribution rate. However, the employee may opt out. The contribution rate will go up 1% per year to a maximum of 10%. This should increase participation in 401(k) retirement plans. Current plans are exempt from this provision, but we encourage all plan sponsors to consider putting this into effect.

Younger retirement savers get some added benefits as well. SECURE 2.0 will allow employers to a 401(k) or 403(b) plan to make matching contributions which can equal up to the amount a participant is paying on student loan debt. Since many student loan borrowers couldn’t pay down debt and participate in a retirement plan, this should make it easier to do so.

Now here is a real planning opportunity regarding 529 College Savings Plan and retirement planning.  A 529 beneficiary can convert up to $35,000 to a Roth IRA without penalty or taxes so long as the 529 plan has been in existence for at least 15 years. Further, the amount transferred in any one year is limited to the amount that can go into a Roth IRA and is reduced by any other contributions to a Roth IRA. Okay, money left over can be used, but only money that has been in the plan for more than five years. There is more good news: the income limits placed on one’s ability to contribute to a Roth from a 529 plan are waived. This all begins in 2024.

Beginning in 2024, a retirement plan participant may set up an Emergency Savings Account (ESA) held in cash or cash equivalents with a maximum balance of $2,500. The ESA may qualify for a match from the employer and distributions can be made without incurring an early withdrawal penalty. The penalty-free withdrawals are available for the following situations: 1) emergency withdrawals up $1,000 (no more withdrawals are available until it is paid back or three years have passed); 2) state and local corrections officers and private firefighters may now use the catch-up provisions; 3) terminal illness with “terminal” being defined as within seven years; 4) qualified disaster distributions up to $22,000 for all disasters beginning with January 26, 2021; and 5) up to $2,500 per year for premium payments for a qualified long-term care insurance plan.

Have you lost track of a retirement plan? Section 303 requires the Labor Department to set up a database for participants to seek out plan administrators that might have knowledge of a “lost” plan.

It will take time to digest all these changes and the planning opportunities that come with them. Make no mistake, they are significant changes.


Last year was the worst for stocks (represented by the S&P 500) since 2008 and bonds did not fare much better as the war on inflation and the actual war in Europe brought about an abrupt change in global monetary policy and economic growth. As the new year begins, we are glad to say that past performance is not indicative of future results. In fact, stocks have only had back-to-back negative years 9% of the time since 1928 or less than 1 out of 10. The outlook for bonds is also the best it has been in recent memory after coming off historically low interest rates and finally offering some attractive yields. Market performance this year will depend on how sticky inflation proves to be, which will ultimately determine how aggressive global central banks need to be. We are of the opinion that central banks must primarily tame inflation to avoid a stagflationary environment (a period of high inflation, high unemployment, and little to no economic growth) and that the global economy can continue to grow at current interest rates, albeit slower than pandemic highs.

Here, at home, the U.S. economy is resilient. The labor market still appears strong, corporate balance sheets are healthy, and consumers’ excess savings remain high. Our base case scenario does not assume a recession this year unless more of these still strong positive indicators take a turn for the worse. Should they worsen, we would expect a mild recession and not something similar to 2008/2009. Importantly, we currently do not see the structural issues in-place that led to the Great Financial Crisis (housing and credit imbalances) and a deep recession. Europe’s probability of a mild recession is likely higher, though economic and market dynamics should improve materially as we get through the winter. China’s recent reopening after lengthy COVID lockdowns is positive news for global trade and should bring the world’s second largest economy back to trend-line growth. All in, we expect better performance relative to last year and remain cautiously optimistic for markets in 2023.


The conversations have been non-stop since the elections in November about a split Congress for the next two years. The Democrats increased their narrow margin in the Senate by one vote. For a few hours, it was two votes, but then Senator Sinema (AZ) announced that she was changing her affiliation from Democrat to Independent joining Senators Sanders (VT) and King (ME). Sanders and King have traditionally caucused with the Democrats, but Sinema has indicated she will not caucus with either party. This puts the Democrats in “control”, but it puts the independents along with Senator Manchin (D-WV) with significant influence. Over in the House, the Republicans are in control, but just as frayed as the Democrats are in the Senate. Representative McCarthy will likely become Speaker in a few days but leading three factions within the Republican party: the traditionalists, the moderates, and the right wing, which is a small group, yet big enough to disrupt. In both Houses, the leadership will have to dodge and weave their way through the ranks.

What does this likely mean? In the Senate, look for liberal judges to be fast tracked. Federal judges serve for life, so these appointments will have a long-term impact. Over in the House, expect the Republicans to return the favor of “investigations” which will keep the partisanship intact. The two sides are too far apart on most major issues, so don’t expect too much to be done over the next two years.  Some would say, “that is a good thing.” Each will be trying to set themselves up for November 2024.

The Senate is seeing seven Senators retire with a combined 166 years of service. Over those years, they forged relationships with both sides of the aisle which behind the scenes still allowed for meaningful dialogue at critical times. Without these relationships, the ability to compromise becomes less promising. In addition, they each reached senior positions amongst various committees, and that institutional knowledge goes out the window.  Although these retiring Senators will lower the age of the average Senator, it is still made up of many senior citizens. 32 Senators will be age 70 or higher, with two being almost 90. (Source: Kiplinger Letter)

So, what about the Presidential race? First, keep in mind that the leading candidate at this point in the election cycle has historically struggled to stay the leader. Go back to 2006, who was thinking that then Senator Obama would become the nominee? In 2014, who saw Trump announcing 6 months later and then crushing the opposition including the leader at the time, former Florida Governor, Jeb Bush. Even in 2018, Biden was not the initial leader among the seven candidates that garnered convention votes two years later.

Biden will soon decide what he will do, and our bet is that the idea of being a “bridge” President will give way to talking about there is still much to do. If he decides to run, it will be hard for someone in the Democratic party to mount a serious challenge. Given the history of early leaders stumbling, Governor DeSantis should step carefully. While Trump has announced already and many think he is the leader, our guess is that enough Republicans who made him a candidate in 2016 and even voted for him twice for President will look for an alternative. That said, if he can continue to dodge his legal troubles, he will likely still take enough votes to the convention to have a say in who will be the candidate.

Here is our only prediction about the New Year – politics will not serve the people; it will serve the politicians.


To help people through the pandemic, the federal government put money into the hands of the people who needed the assistance. While people spent some of this money, they also saved because they were not going out much, traveling, or buying stuff. As the pandemic waned, spending resumed. This huge influx of money, coupled with supply chain issues, helped inflation balloon. Now that much of that money has been spent, many believe that inflation will calm down as well.

While the Fed’s tightening should slow down the economy and hopefully bring down inflation, there is something in the background that could keep inflation going for longer than the Fed would like. The classic definition of inflation is too much money chasing too few goods and services. So where will the new money come from? Over the next five years, up to $2 trillion will be available from the Inflation Reduction Act, the Infrastructure and Jobs Act, and the CHIPS and Science Act. In the famous words from the movie “Jerry Maguire” with a little paraphrasing…FOLLOW the money. This money will go toward redeveloping the chips industry in America, rebuilding our infrastructure, and energy and climate initiatives. It is so big that on top of the $2 trillion of money from the government, business and investment capital are chasing the opportunities. While all of this will help sustain the American free enterprise system, it will also put pressure on upward inflation.


In the last Perspective$, we mentioned that many estate tax returns that owed no tax were being filed and that perhaps the reason was to start the clock on the IRS’s ability to challenge the estate valuation. Our thanks to Bruce Bokor of Johnson Pope for giving us another reason to file an estate tax return when no tax is owed. In order for the unused portion of a decedent’s estate tax credit to be passed to the surviving spouse, an estate tax return must be filed. Thank you, Bruce.


In many ProVise Perspective$, we have explored the reasons why women retire with less including income disparity and fewer years in the workplace. The National Committee to Preserve Social Security and Medicare notes that because of the income gap a woman would need to work nine more years than a man to close this lifetime gap.

What steps should women take as we come to the end of 2022? One powerful retirement tool for both women and men is investing in your 401(k) plan. Though we often advise clients to resist the temptation to check their account and make changes when markets are down, it is beneficial to check your 401(k) at least annually.

Add logging into your 401(k) to your end of the year list and review your savings rate and investment mix. The IRS increased the annual 401(k) contribution to $22,500 and for people over 50 to $30,000. For women, it is imperative to find ways to overcome the income gap and to put themselves in the strongest financial position for retirement so remember to check in periodically with your 401(k).


As most seniors who are collecting Social Security know, there is a big increase for 2023 of 8.7% which follows on the heels of a 5.9% increase for 2022. So, what is inflation affecting most? According to the Senior Citizens League, here are a few with their percentage increases:

Pet food – 15%

Turkey – 16.9%

Health insurance premiums and out of pocket costs – 20.6%

Airfares – 42.9%

Home heating oil – 68%.

They all make the 8.9% increase pale in comparison.