Financial Insights- July 15, 2021

Written by Shane O'Hara, CFP®

On July 15, 2021

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Back in the good old days (actually just a few years ago), an IRA owner could do a rollover from one IRA to another as frequently as they wanted. A rollover occurs when the IRA owner first withdraws money from IRA – and, within 60 days, places the funds back into an IRA. This movement was not taxable as long as the time deadline was met. Some clever folks figured out that if they had multiple IRAs they could continue to take out and put back the money whenever they wanted and have some use of the money on a full-time basis, without tax consequences. To prevent this abuse, the IRS issued a ruling that only one IRA rollover could occur within the same 12-month period. This is not a calendar year, but a rolling 12-month period. This applies to all IRAs owned by the same person regardless of how many IRAs they have. If more than one occurs within the same 12-month period, then it is considered a taxable withdrawal. The costs are steep. First, income taxes are owed on the amount withdrawn. If under 59½, then the 10% penalty for an early withdrawal applies. Finally, if the owner has rolled over the funds, they will be hit with a 6% penalty for contributing too much to the IRA. The best way to avoid this unfortunate situation is to simply do a trustee-to-trustee transfer as this is not considered a rollover because the IRA owner never has control of the money. We believe, in most cases, it is best to consolidate retirement funds especially as you draw close to retirement. If you have a few “loose” IRAs hanging around, let us know and we can help with the consolidation/simplification and make sure that it qualifies as a trustee-to-trustee transfer.


Homeownership continues to be one of the best ways to accumulate long-term wealth and the past few years have not hurt home sellers until, of course, they must buy something new. What was once the dream of many to become a millionaire has transformed into a dream of buying a million-dollar home. Ever wonder where the most $1 million+ homes exist? Well, LendingTree has determined that 4.27% of U.S. homes fall into this category and they provided a list of the top ten along with the percentage of homes in the area:

   10) Denver, CO – 3.52%

     9) Miami, FL – 4.48%

     8) Washington, DC – 6.69%

     7) Boston, MA – 7.43%

     6) Seattle, WA – 8.53%

     5) New York City, NY – 9.92%

     4) San Diego, CA – 12.19%

     3) Los Angeles, CA – 17.02%

     2) San Francisco – 36.25%

     1) San Jose, CA – 47.29%

Imagine that almost half the homes where you live are worth $1 million. It feels good to see the price of our home increase but unless you are selling, it is just a number on paper.



Back during the height of the pandemic over 22 million people lost their jobs. The June jobs report, which was expected to show that 700,000 new jobs were created, came in at 850,000. That means that 70% of those laid off are now back at work. That also means about 7 million are still not back to work. But that is likely to change quickly.  22 states eliminated the extra $300 per week unemployment benefit from the Federal government at the end of June and the extra payments end nationwide in early September. With some 9 million-plus jobs available and more likely coming available as the economy continues to recover, it isn’t hard to assume that even those that have resisted going back to work now will start working again. The unemployment number increased to 5.9% as more people started looking for a job. With more money to spend and lots of pent-up demand, we can anticipate the economy continuing to grow at a fast pace through the rest of the year and likely into the beginning of next year.



Secretary of the Treasury, Janet Yellen, went to the 130-member meeting of the Organization of Economic Cooperation and Development and the Group of 20 with one goal in mind. She wanted worldwide approval of the 15% minimum tax rate being advanced by President Biden. While all nations have not signed on, Ireland is holding out as an example, most complied. The group says they have a detailed plan worked out which will be voted on in October. Those details will make a difference and you can expect there will be further negotiations. With the U.S. already at a 21% corporate tax rate and Biden pushing to make it 28%, we are already in compliance. Even if the idea sticks, it will take a great deal of time for all the countries to pass the necessary laws.



It’s that time of year again when we get further insight into the health of public corporations. Banks led the charge this week, and results have been impressive. Expectations are extremely high for second-quarter earnings growth, as has been the case every quarter since bottoming out in the depths of the pandemic. Analysts expect earnings to grow 64% compared to last year, which is up from 52% earnings growth in March. Some of the highest growth is expected to come from energy, banks, industrials, and materials while consumer staples, healthcare, and real estate are relative laggards. Utilities are the only sector expected to post negative earnings growth.

Expect extra scrutiny of earnings results over the next couple of quarters as there becomes more concern over whether we have reached peak economic and corporate earnings growth, rich valuations, margin pressures from higher input costs (inflation), the impact of higher interest rates, and the extent of potential business interruption caused by coronavirus variants such as delta. Ultimately, we believe earnings growth will be robust over the back half of 2021 and into 2022 as consumption demand grows, business expenditures and corporate buybacks accelerate, and operating leverage remains resilient against the backdrop of supportive monetary and fiscal policy.



Our last ProVise Perspective$ discussed some “financial to-do’s” via the generations. To continue our theme, here are some recommendations for women as they enter their 50s and 60s heading towards retirement.

In your 50s, zero in on funding your retirement accounts and evaluate your savings rate.  Once you turn 50, you may take advantage of “catch-up” contributions. Before age 50, you may contribute $19,500 to your 401(k) in 2021. However, once you turn 50, the catch-up provision allows you to contribute an additional $6,500 annually. This additional savings and tax deferred growth may be significant to your retirement planning. Remember that women statistically live longer than men, so we need to continue focusing on our funding and investing our retirement savings. 

Start researching long-term care insurance in your 50s before premiums rise sharply or worsening health rules out coverage. AARP’s article “5 Things You Should Know About Long-Term Care Insurance” reports that by the time you reach 65, chances are 50/50 that you will require paid long-term care at some point in your life. Long-term care coverages may include costs of nursing home, assisted living, or in-home care that may not be covered by Medicare.   

In your 60s, many women look forward to reaching the finish line known as retirement.  How will you spend your days in retirement? Remember that planning vacations and spending time with grandchildren will only fill up some weeks of the year. Will you fill your days with hobbies – new and old – or volunteer? Try spending a few months living off the income you plan to pay yourself in retirement.

One of the most important questions you will face in your 60s is “When to claim Social Security benefits?” For most retirees, Social Security is the only source of guaranteed income they will receive for the rest of their lives. Therefore, you must be strategic and thoughtful about when to claim.

Each decade brings unique challenges for your financial planning so let ProVise give you individualized advice to work with you through these decades.


The following suggestions were provided by BayCare to help keep you safe while traveling:

Air Travel

  • Wear a mask at all times as required by the CDC.
  • Touch as few surfaces as possible. Don’t lean on the check-in counter and be sure to wash your hands after the security checkpoint.
  • Use sanitizing wipes to wipe surfaces of any furniture you sit in while waiting to board your plane.
  • Upon entry in the plane, wipe down every surface you could possibly touch with a sanitizing wipe and let it dry.
  • Don’t eat food with your hands, where possible. Sanitize your hands after eating and drinking.
  • Upon arriving at the destination terminal, wash your hands well before continuing on your way.
  • If traveling with a pet, call the airline to get their latest requirements for pet travel.

Car Trips and Hotel Stays

  • Wear a mask where it’s required.
  • Pack hand sanitizer and sanitizing wipes and keep them in hand.
  • Anytime you stop, be sure to wash or sanitize hands before returning to your car.
  • Bring food with you or pick up food at drive-throughs, curbside restaurant service or stores.
  • Call ahead to hotels and ask about their sanitation measures, including room turnover times.
  • Wipe down hard surfaces when you get to your hotel room with sanitizing wipes or cleaner.
  • Try to avoid hotel common areas unless you take precautions to wipe down furniture.

Visiting Family or Friends

  • When visiting your unvaccinated family or friends, try to spend time outdoors or in open areas.
  • Avoid eating indoors, if around unvaccinated individuals.