In just four short days (January 19th), the first of two potential partial shutdowns could occur unless Congress comes to an agreement and the President signs a bill. As you may recall, former Speaker McCarthy along with Democrats passed a continuing resolution to avoid a shutdown in late summer. That led to his removal from the Speakership by a group of conservative Republicans. Without a new deal, the Departments of Agriculture, Energy, Transportation, and Veteran Affairs will run out of money on January 19th.  Then, the United States Department of Defense and every other agency including big domestic programs would run out of money on February 2nd.

Over the January 5th weekend, Speaker Johnson and Senate Majority Leader Schumer struck a deal to limit spending to $1.66 trillion with about $880 billion going to defense and the rest to everything else. What are the issues surrounding this “deal”? First, it is pretty much the same deal that McCarthy proposed although Johnson did get it reduced by another $30 billion, so why would the conversative caucus support it? If it passes with bipartisan support, but without the conservative Republican caucus, look for another removal of the House Speaker. Never happened before McCarthy in American history but could happen twice within months of each other now.

Next, other than the amount for defense, the rest of the line-item dollars need to be apportioned amongst all the rest of the Federal government. We are willing to bet those conversations will not be easy. There will be a lot of pulling and tugging as the members of the House start trading and bargaining. It could lead to more disarray.

Finally, this “deal” doesn’t solve any of the issues about aid to Ukraine, Israel, or border protection. We assume that keeping the government working will be enough to keep Congress busy and that these other important issues will be moved to the back burner.

At best, we give this compromise only a 50/50 chance of avoiding a government shutdown.  All this dysfunction is not good for the economy or the markets. The markets already have a lot of pressure coming off a great 2023, including higher for longer interest rates, earnings, and geopolitical events. Take deep breaths as volatility reigns over the markets.


Social Security recipients started the month off with a 3.2% higher payment, but many may not see very much in their checks due to the increased Medicare costs. Just how bad is it? That depends on your income.

First, Part A which covers hospital bills is free. Medicare participants pay additional costs for Part B which covers doctors, testing, imaging, etc. and a Part D (for most people) which covers drugs. The basic monthly cost for Part B is $174.70 which is about $10 more than in 2023, but no increase in Part D for those filing jointly with Modified AGI (AGI plus tax-exempt interest) less than $206,000 and $103,000 for singles. Taxpayers with a higher Modified AGI pay higher premiums based on increasing income with a maximum occurring for joint filers who make over $750,000. At this level, joint filers will pay $594 monthly for Part B and $81 for Part D. Single taxpayers who make over $500,000 will pay the same premiums.

Add in a Medicare supplement policy and a couple in the top bracket can spend over more than $20,000 a year in retirement for health care premiums. Medicare Advantage Plans, Part C, have become popular because participants still pay the premiums but there isn’t a need for a Medicare supplement. These plans also provide additional benefits that are not covered by Medicare.

So why isn’t everyone going to Part C? In exchange for this lower cost, the doctors you can choose may be limited and this is a managed care program where permission is generally needed to get certain tests and surgeries. If you need help trying to decide which program(s) will be best for you, reach out to us, and for a modest fee we can work with you through a software program that we have which will help you make the decision. Reminder – we do this at a fiduciary standard of care, and we do not sell health insurance.


What is the “Sandwich Generation?” The Merriam-Webster Dictionary defines it as “a generation of people who are caring for their aging parents while supporting their own children.” Increasingly, the definition of “Sandwichers” has expanded as they find themselves caring and financially supporting not only children still at home but also their adult children and grandchildren.

Historically, these caregiving responsibilities have fallen upon women. The New York Life Wealth Study found that the average adult caregiver spends over 50 hours a week providing various services to kids and senior family members. The Sandwich Generation provides support in numerous ways, including financial support, running errands, and providing meals.

The New York Life Wealth Study found that women reported a higher emotional and mental strain as caregivers. Life as a caregiver can be stressful, overwhelming, and challenging, especially with only so many hours in the day. Various articles highlight the journey of these caregivers with words and phrases like “torn between parent and child,” “squeezed and stretched,” “guilt,” “juggling,” and “frazzled.”

The New York Life Wealth Watch study reports that “95% of Sandwich Generation adults say that caregiving has impacted an area of their life with personal finances.” This finding indicates how vital it is for caregivers—or those who are considering becoming caregivers—to start working with a financial planner concerning the various impacts on their financial future. This becomes especially imperative for women because women live longer in retirement and yet typically go into retirement years with much less saved than men. It seems apparent that financially caring for the generation ahead and behind us could put us even farther behind.


Beginning this year, anyone can make a gift of $18,000 to as many people as they wish and not incur any gift tax or eat into their lifetime exemption. For a couple, they can give away $36,000. When most people make these gifts, they will generally use cash as it is most convenient. This convenience doesn’t always translate into tax efficiency.

Instead of giving cash gifts this year, you might consider gifting some highly appreciated stocks that you own that could cost you as much as 24.8% (including Obama care) in capital gains taxes at the time you sell. If the recipient of your gift has taxable income less than $47,025 single or $94,050 joint in 2024 and you have held the stock for more than a year, they will pay zero capital gains tax when they sell the appreciated asset. For those states with an income tax, it may cause a slight increase.  Even if the recipient is in a 15 or 20% capital gains rate, this still works with some tax leverage just not as much.


As we enter 2024, New Year’s resolutions are top of mind. From eating healthier and exercising more, to visiting family and curbing frivolous spending, these goals often dominate our thoughts. While all of those can be challenging, the last one seems to be particularly stubborn. Despite the impact of inflation leading to higher costs, many individuals consistently spend close to their financial limits. To help you navigate this challenge, here are a few tips to better manage your spending this year.

First, set clear and attainable goals. Depending on your situation, this might be establishing an emergency fund, paying off outstanding debts like a car loan, or increasing your contributions to retirement savings such as a 401(k). Setting realistic goals allows you to strive for something within reach. Many people set their goals too high, later realizing they won’t reach them, and subsequently abandoning them altogether.

Know your numbers. Begin by identifying essential expenses like housing, insurance, groceries, and taxes to form the basis of your budget. Giving yourself additional wiggle room for unexpected expenses is also prudent. With this groundwork, you can establish savings and investment objectives. Diversifying your investments across various vehicles like savings accounts, 401(k)s, IRAs, and brokerage accounts offer flexibility in the long run. Additionally, even discretionary spending can be planned. Setting a monthly budget for dining out and a yearly budget for travel is a good place to start. Remember to account for sneaky subscription fees that often slip our minds.

Don’t fall victim to lifestyle creep. Congratulations! You just got a raise or year-end bonus. Time to celebrate or upgrade your old car, right? Not exactly. Many of us have fallen victim to this when our incomes have increased. What was once an occasional dining-out experience may now occur multiple times a week. You may think you can afford it, but your savings account says differently. A useful strategy to counteract this is to match any additional discretionary spending with an equivalent contribution to your savings or investment accounts.

Overspending happens, and it’s important not to be too hard on yourself. Instead, focus on taking small but meaningful steps in the right financial direction throughout 2024. These steps, no matter how small, can significantly impact your financial well-being.


4 Ways to Trick Your Brain Into Making Better Money Decisions in 2024 – WSJ

Where Did All the Money Go? The Villain in Your Transaction History – WSJ


Bet you didn’t know that revocable and irrevocable trusts carry different limits of FDIC insurance…at least for now. So, what is the difference? If one has a revocable trust with three beneficiaries, then each beneficiary is entitled to $250,000 for a total of $750,000. The maximum number of beneficiaries is capped at five, thus the maximum amount is $1,250,000. Certain conditions must be met, but they are straightforward.

An irrevocable trust, however, is treated differently. Regardless of the number of beneficiaries, the entire trust only receives $250,000 of FDIC insurance. Seems a bit unfair and illogical, so the rules are going to change effective April 1, 2024. Both types of trust will be treated the same with each beneficiary getting $250,000 of coverage up to a maximum of five.


For those with student loan debt, there are some things to keep in mind as you prepare your 2023 taxes. Even if you don’t itemize, you can deduct up to $2,500 of interest paid if your Modified Adjusted Gross Income is less than $75,000 for a single and $155,000 for joint taxpayers. Above these levels, the deductibility begins phasing out until the Modified Adjusted Gross Income exceeds $90,000 for singles and $185,000 for joint filers.

If you are the parent of a student with interest on a student loan and you are liable for the loan, then you can write it off if you are declaring the student as a dependent. But what if you make the loan payments on behalf of the child rather than the child doing it? As long as they are under the limits above, the child can deduct it as if they paid it directly. For those student loans where the debt was forgiven beginning in 2021 (and it’s true for tax years 2024 and 2025 as well) forgiveness is not considered taxable income at the federal level. This may not be true at the state level. If you have money left over in your 529 plan you can withdraw up to $10,000 to repay loans without having to declare it is taxable income.


When the calendar rolls over to the next tax year, investors think about making an IRA rollover. We are not talking about moving directly from one IRA to another on a custodian-to-custodian basis. This is when you withdraw money/assets from your IRA and then want to replace it or roll it over to another IRA. The money/assets must be redeposited into an IRA within 60 days. After that time, unless there is an exemption available, the money becomes taxable and if under 59½ then you pay a 10% penalty.

Next, you must roll over the same asset that you withdrew in the first place. This generally isn’t an issue as most people take cash, but if it is something else, (think, any stock), then those shares are what need to be replaced. To keep people from withdrawing money, putting it back within 60 days and then turning around and withdrawing again immediately, an investor can only do a rollover once every 12 months which is not the same as once a calendar year. As an example, if you withdraw money from your IRA account on January 15, 2024, you cannot do another withdrawal until January 15th next year. If you do more than one in a 12-month period, the distribution becomes taxable.


Those readers who are over the age of 70 will likely remember the CBS TV show “The Millionaire” that ran from 1955-60. Each week, John Beresford Tipton, a VERY wealthy person gave his associate Michael Anthony a check for $1 million to give to an unsuspecting person tax-free. The story then unfolded about how each of these folks handled this sudden wealth. That was when a million was really a million. Today, it would take a check for about $11 million in 2024 dollars to be the equivalent.

Nonetheless, having a net worth of $1 million is still a yardstick for measuring wealth by many standards. In gathering data from Wikipedia, the U.S. Census Bureau, and the IRS, Think Advisor put together a list by state regarding the number of millionaire households. Does it surprise you that it encompasses 18% of U.S. households? We were surprised by the results.

Here is a list of the top ten states and the percentage of households:

10) Connecticut – 20%

9) Georgia – 20.1%

8) Montana – 21%

7) Massachusetts – 21.5%

6) Wyoming – 21.7%

5) Hawaii – 22%

4) Florida – 22.2%

3) Washington – 22.4%

2) New York – 22.6%

1) California – 27.3%


We hope you continue to stay safe and well.

Proudly and successfully serving our clients for over 38 years. As always, we encourage you to call or email us if you would like to discuss anything.


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