The Federal Reserve is meeting today and tomorrow, and perhaps even before you are reading this, they will raise interest rates once again. The question is by 50 or 25 basis points. Many are hoping it is the latter since the inflation number for the past four months has been quite favorable. September was up 0.4% along with October, but November was only an increase of 0.1% and December was a negative 0.1. Average and annualize those months, and you produce about a 2.5% rate. Despite this, the Fed is still concerned about a strong labor market. People making money will spend it and that is the opposite of slowing down the economy. The Fed has been signaling a 50-basis point increase but has recently backed off and the markets are betting on 25. If they do raise by only 25 at this meeting, the markets could see it as a good sign. The Fed is not into surprising the markets these days to either the up or downside.


On Wednesday, February 22nd at 4 pm, ProVise will host a special one-hour webinar on Social Security for our clients and friends. Sandra Risgaard, CFP® will provide information for pre-retirees who are wondering when, where, and how to take Social Security. Sandy will also discuss the importance of watching your income closely to not have a negative impact on your premiums for Medicare.

Be looking for more information in the next week with a link on how to directly sign up for our webinar.

Sandy Risgaard, CFP®


Banks are being warned by the Treasury, Office of the Comptroller, and FDIC to seriously consider the risks associated with cryptocurrency including fraud, volatility, lack of regulatory oversight, and legal uncertainty. European regulators are doing the same thing as the dangers may be greater than apparent. FDIC has made it clear that any crypto assets held at a bank will not be insured. In fact, there is virtually no insurance for these assets although some operators are telling buyers that the asset is insured. If you want to invest with a little Las Vegas money just to say you own it or want to make a small wager just in case it explodes in price, okay, we get it. As we said in our webinar, the underlying technology has lots of uses, but the currencies themselves are a speculative bet at best. Buyer beware!


Oh, how wonderful to be young with dreams of the future. The Z Generation (age 18-25) was recently surveyed by Northwestern Mutual about their aspirations around retirement. The study found that the Z’s want to retire at age 59 which is five years younger than the general population who wish to retire by age 64. Interestingly, the Baby Boomers (born between 1946 and 1964) see themselves retiring at age 71. The Z’s believe that their mental health is more important than having a lot of money in retirement and therefore they feel they can save enough for an earlier, better, and simpler retirement.

Let’s take a couple who want to retire on the equivalent of $100,000 today. (We are using this number because if you want $200,000 you will just have to double our example and if you only want $50,000 you can cut it in half). So, let’s see what they need to do using middle age of 23, or 36 years into the future. First, at a 3% inflation rate, the income level will increase to $290,000. Sounds crazy, but for those that are in retirement today, just remember what your number was 36 years ago in 1987. Since they are retiring so young and assuming we still have Social Security which isn’t likely to start for another decade, using the 4% rule, they will need to accumulate $7.25 million. Assuming a hypothetical investment return of 6%, they will need to save about $4,700 a month starting today! A very unlikely scenario for most. Ah, but who wants to throw cold water on a dream?


In case you are not familiar with this movement, it is a coalition of eight states (Hawaii, California, Washington, Illinois, Minnesota, Connecticut, New York, and Maryland) whose goal is to advocate for “tax justice” or to raise taxes on the ultra-wealthy for the “benefit” of all. While each of these states has slightly different ways of accomplishing the goal, the common thread is that people with money should pay even more than they do today. Here are a few examples:

  • California would impose a 1.5% surtax on worldwide wealth over $500 million and the same percentage for income above $1 million.
  • Hawaii would tax capital gains at the same rate as ordinary income, although in fairness they would lower the inheritance tax – pay me now instead of later. Maryland is doing something similar.
  • New York would raise the capital gains tax by 7.5% or 15% above certain income levels. State legislators don’t seem to understand that they could drive people away from their respective states which could reduce the income tax they are collecting today.


U.S. corporations enjoyed some of the best earnings growth on record following the pandemic, as government stimulus and pent-up demand fueled profit margin expansion. That phenomenon has now reversed course as considerably higher interest rates and inflation caused consumer fatigue, squeezing those margins and hampering demand. Much tougher year-over-year comparisons have not helped either. Analysts are currently estimating that earnings declined last quarter. Roughly 20% of the S&P 500 companies have reported fourth-quarter 2022 earnings so far and the blended growth rate was -3%. To be clear, earnings are still projected to have been positive for the year, growing 4% in 2022.

Looking forward, investors are attempting to glean early signs of the impact of rising interest rates and just how well earnings can hold up. In this current environment, we expect stock returns to be more reliant on earnings rather than the price-to-earnings multiple (what investors are willing to pay for those earnings) so an “earnings recession” would be detrimental to market performance. As of now, analysts are predicting we avoid an earnings recession this year with 2023 estimates of mid-single-digit growth.


In November 2022, the Transamerica Center for Retirement Studies released its 22nd annual report titled “Emerging From the COVID-19 Pandemic: Women’s Health, Money, and Retirement Preparations.” Do you have any idea of the greatest retirement fear for both men and women? If you guessed, a reduction or elimination of Social Security benefits you are on the right track.

Men and women also share several other fears including outliving their savings and investments and declining health. Thirty percent of men and women fear cognitive decline and 25% fear feeling isolated and alone. Women expressed the following fears more significantly than men like losing their independence, affordable housing, and adequate and affordable health care. Do you have retirement fears?