We’ve Moved! 6121 Excelsior Blvd. St. Louis Park, MN 55416

Joe Lucey

Don’t Let Penalties Cost You

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So, did you catch the high school boys’ hockey state championship this weekend? What a showdown on the ice! I heard a record number of attendees (20,346!!) were at the Xcel for Saturday night’s final match up – crazy! A huge congratulations to Edina and St. Cloud Cathedral for clinching their respective Class AA and Class A victories.

Few things make me prouder to be a Minnesotan than watching those young guns fly down that ice, masterfully handling the puck even at their age. And the hair! You can’t forget the hair! Thems were the days. It’s peak nostalgia season for many of us in the State of Hockey.

We follow the tournament closely here in the office and it always amazes me how fast these games can turn – part of what makes them so exciting. It all boils down to a few critical plays, a few critical errors. Penalties are one of the most frequent blunders in a game. I’ve seen the frustrating toll they can take on team morale myself watching my son play.

Tripping, for example, is an often-called penalty and especially frustrating because it’s just so easy to do. Penalties can happen fast with emotional or sloppy playing, and the more there are the more frustrating it becomes – to watch and play. It hurts to see your best guy have to sit in the box. If you’re going to take a penalty, make it worthwhile.

When it comes to your retirement, you cannot let penalties, even a 2-minute minor mistake, cost you your retirement game. Ill-timed market corrections or legislative changes can affect your retirement earnings, but with the right retirement lineup, they shouldn’t.

Just as a well-rounded hockey team relies on each player to contribute their strengths to achieve victory, the best retirement planning is a team effort. Having the right people in your lineup can make all the difference. At Secured Retirement, our tight team has perfected key plays to ensure every client has a tried and true winning strategy.

In sports, we love a wild game that comes right down to the wire – not here. Here, methodical planning with a few key plays is what wins gold. Remember that!

Cup of Joe

CUP OF JOE

From Joe Lucey, Founder of Secured Retirement

There’s something about sitting down with a steaming cup of coffee that always kicks my day into high gear. And it’s not just because of the caffeine it sends coursing through my veins.

Throughout my career, some of my biggest revelations have come to me in conversation with my mentor over a cup of joe. Good conversation and personal connection can pick you up in a special way. It’s that feeling that I’m hoping to bring to you with my new series, your Cup of Joe.

5 Considerations To Help You Land the Right Financial Advisor

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With more and more financial products hitting the market and a growing number of so-called gurus shilling financial advice from every nook and cranny of the internet, it’s more important than ever to have a trusted financial advisor in your corner. But with so many opinions floating around, how can you determine who to actually trust? Navigating through the maze of investment options, retirement plans, and financial strategies demands tried-and-true expertise and insight. We’ve put together a list of five things to consider as you sift through the noise and find a professional who’s worthy of your trust.

  1. Communication Style: Clear and effective communication is crucial to the advisor-client relationship. In this industry, things can get complex and confusing quickly. You want an advisor who can spell it all out for you in a way you understand. Beyond that, you’ll want to work with someone who responds promptly and is willing to provide you with regular updates. Transparent and open communication fosters trust and ensures that you remain in the know and empowered throughout your financial journey.
  2. Credentials and Beyond: Formal credentials can be a valuable indicator of expertise, but they don’t provide a complete picture of competency. In the world of financial consulting and retirement planning, there is a whole spectrum of designations ranging from rigorous to just plain formalities. Take into account a prospective financial advisor’s track record, integrity, and compatibility with your financial goals, rather than simply relying on the acronyms trailing their name.
  3. Specialization: Just like you’d consult a cardiologist for heart-related concerns rather than your family doctor, you should seek out a financial advisor whose expertise aligns with your specific financial needs. At Secured Retirement, our specialization revolves around income and tax planning for retirement. Having a specialty indicates the presence of proven strategies. Whether you’re interested in retirement planning, estate management, or investment strategies, and depending on where you are in your financial journey, working with a specialist ensures guidance and comprehensive insights tailored to your goals.
  4. Life-Long Learning: Even the most decorated financial professionals should seek out ongoing education and training. This is a field that is constantly changing. You want to work with advisors who keep up with this change. What’s more, you want to know that the training they’re doing isn’t on sales techniques, but in areas of financial substance. Ensure your financial partner values honing their knowledge and skills in their area of expertise so that they consistently stay on top of their game.
  5. A Range of Approaches: Every family’s financial situation has its strengths and weaknesses. Within their specialty, your financial advisor should be able to tailor their approach to your unique situation in order to achieve your personal financial goals. You need a partner who takes the time to listen to your vision and can craft a strategy around it. There is no one-size-fits-all approach in this industry, and if anyone claims there is. . . Beware!

In the complex world of financial planning, working with competent financial professionals you can trust makes all the difference. At Secured Retirement, we’ve built our business with these very considerations in mind. We’re a partner you can rely on and thrive with. 

Connect with us today: 952-460-3290

Tax Prep Vs Planning – Two Strategies For Tax Savings

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As the new year unfolds, it brings not just resolutions and fresh beginnings but also the commencement of a new tax season. The tax season is upon us and tax professionals across the country are spending their wee hours crunching numbers to save you money where they can. While the best tax preparers can sometimes find savings for you, tax planning offers a more comprehensive way to secure longer-term savings, rather than just once-every-couple-years savings. And that’s the difference between tax preparation and tax planning. Blog over. Case closed. Just kidding! Let’s dive into the distinction between these practices and why there’s a place for both of them in your financial routine.

Tax Prep Vs. Tax Planning

Tax prep and tax planning have two central differences: Their purpose and their timing. Tax prep is primarily focused on completing and filing the correct tax forms in order to be federally compliant. This process happens between January 1 and the April due date – the 15th this year. If you’re lucky, a skilled tax preparer will find some ways to minimize the amount you owe Uncle Sam yearly. This reactive strategy does work out some years!

On the other hand, tax planning is an ongoing effort that happens year-round. These tax-saving strategies take into account your long-term financial goals and make more substantial money-moving adjustments to minimize your tax liability to the tune of a small fortune. Its purpose is to create a proactive strategy for savings accomplished in advance of your retirement. 

Tax Planning’s Growing Importance

In today’s financial world, taxes primarily have a significant effect on retirement earnings. The current generations of retirees are the first to fund their retirements from 401Ks and IRAs, as opposed to the pensions of previous generations. Therefore, it’s more important than ever to prioritize tax planning as part of your retirement savings arsenal. Planning before you retire will help you reap the most rewards.

Additionally, federal taxes are currently at a 40-year low. In order to pay off our record-breaking national debt, it’s likely the federal government will raise taxes. So make your adjustments and maximize your savings while the gettin’s good.

Strategies To Maximize Savings and Minimize Tax-Liability

When it comes to actually implementing tax savings strategies, there are a host of factors that contribute to your tax-optimized equation. Things like managing when and how you withdraw from IRAs, 401Ks, and take your social security benefits all have tax consequences. In retirement, as you transition your income, you’ll be taxed on all of those things. A robust retirement withdrawal strategy often relies on diversifying your money across different types of accounts. This applies to things like reserve funds, taxable accounts (traditional brokerage accounts), tax-deferred accounts (401K or Roth IRA), and tax-free accounts (Roth 401K or Roth IRA). Tax planning may involve

consciously paying taxes now in an effort to save on taxes later, such as converting traditional IRAs into Roth IRAs.

Another often-implemented strategy involves reducing your taxes when the time comes to actually make withdrawals from your tax-deferred accounts, like your 401K. Sometimes taking too large of a withdrawal from your account can push you into a higher tax bracket. By planning carefully, you can limit your 401K withdrawals to prevent that push, and then take the remainder of your cash needs from after-tax investments, cash savings, or Roth savings. When you fund big-ticket purchases from a mix of accounts, you can best minimize your tax expenses.

Bottom Line

Both tax preparation and tax planning can save you money at the end of the day. At Secured Retirement, we believe one of the most effective ways to plan for retirement is to implement tax planning. Most folks don’t want to pay the government one dime more in taxes than they have to. They want to enjoy their retirement and their earnings. If that sounds like you, the single, most important key is to take advantage of every tax-saving opportunity available to you.

Let’s find the best strategies for you — and see how much money you could save!

Email us to schedule your free tax analysis today.

Secured Retirement Insights 8/9 – 8/13

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Navigating the Open Seas

As any sailor will tell you when setting sail across the open seas, your experience in arriving at your destination is dependent upon the water conditions, the weather, and perhaps of most importance, the skill of the captain and crew.  Investing and financial planning can be comparable to sailing – ultimately arriving at your destination is contingent upon market conditions and the expertise of those helping navigate your journey.

Like a sailboat, stock markets benefit from a strong tailwind which they did not necessarily receive this past week as second-quarter earnings reports continued in earnest.  Earnings growth is on track for the best performance since the fourth quarter of 2009, when the economy was amidst the recovery from the Great Recession, however, reactions to strong results were somewhat muted as the market seems to expect big earnings beats stemming from outsized estimate cuts during the pandemic.

Setbacks in certain individual stocks were again a reminder of the importance of diversification as there were enough positive reactions to earnings and economic releases that the major indices were able to provide small gains for the week.  While larger gains would be preferred, investors should be content with steady gains in the market that move them closer to their goals. This is reminiscent of a captain’s command to the ship’s helmsman to keep the current course, “Steady as she goes…”

Jobs, Jobs, Jobs

The key economic releases last week were primarily employment-related, providing clues on the strength of the post-pandemic recovery since economies are predicated upon the strength of the workforce.  Nonfarm payrolls came in stronger than expected and the unemployment rate dropped, indicating the recovery remains intact and may be continuing to accelerate.  Also of note was the labor force participation rate slightly increased, reflecting more people being active participants in the workforce.  Bloomberg reported a record high 49% of small businesses had job openings in July, providing further evidence that those who want to work should be able to.    

Labor shortages and supply chain constraints leading to input price pressures are holding back the potential of the recovery and a return to normalization.  These conditions should continue to improve in the coming months, helping provide a further boost to growth.  We continue to monitor the strength of the recovery and sustained economic expansion, incorporating findings into our investment management process. 

Looking Ahead

The pace of earnings reports will be slowing since over 90% of the companies in the S&P 500 have reported earnings and greater attention will be given to economic releases over the next couple of months.  There is still the potential for surprises to impact individual stock prices for those companies yet to report earnings.  On the economic front, the focus this week will be on inflation with Consumer Price Index (CPI) and Producer Price Index (PPI) numbers being released which will provide further clues regarding the inflation situation and whether it is transitory or more sustained. 

Escalating concern about the spread of the Delta variant and the implications it might have in the coming months is beginning to weigh on the markets.  Given reopening momentum from high vaccination rates in the most vulnerable segments, higher natural immunity, and the reluctance of state and local governments to impose new restrictions, at this point the potential impact does seem limited.  However, anxiety regarding further spread of the virus and the fear of restrictions could be a drag on consumer sentiment and spending, especially in the short term. 

We continue our work of keeping abreast of market and economic conditions and positioning portfolios accordingly.  It is said the wind and waves are always on the side of the ablest navigator; let us be the skilled navigator who helps you arrive at your financial destination. 

Have a wonderful week!

Nathan Zeller, CFA, CFP®

Chief Investment Strategist

Secured Retirement nzeller@securedretirements.com

Please contact us if you would like to review your individual financial plan or learn how the TaxSmart™ Retirement Program can help you.   

info@securedretirements.com
Office phone # (952) 460-3260

Secured Retirement Insights 8/2 – 8/6

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Duck, Duck, Grey Duck

When a duck is floating across a pond or lake it appears to be relaxed and at ease, but what we don’t see is the amount of work being done underwater as they frantically paddle their feet to move.  The stock market last week was very similar – from a high level, it did not appear to do much despite there being many events happening below the surface.  This was arguably one of the busiest weeks of the quarter with several high-profile companies reporting earnings, a relatively large volume of important economic releases, and a Federal Reserve meeting.  Throw in renewed coronavirus worries due to the spread of the Delta variant and we would have expected some July fireworks, which did not come to fruition.  Maybe the market hit the summer doldrums a little early or maybe the market simply has fatigue from the volatility over the past 18 months and simply decided to take it easy.  Regardless, July is now in the books and provided the sixth straight month of positive stock market returns. 

While a lack of volatility for the overall market may be easily apparent, that was not the case for some of the individual names.  Many large companies, including tech bellwethers, reported decent earnings, but their stock prices reacted differently with some moving sharply higher while others sold off.  If these companies all reported solid earnings that beat analyst’s expectations why did some of the stock prices drop?  In most cases, forward guidance was not as strong as expected. The stock market is a leading indicator based upon future expectations with individual stock prices reflecting anticipated earnings or growth prospects. If those expectations are lowered, the price of a stock will drop.  Conversely, we generally see the opposite when forward guidance is raised – stock prices rise.  The past week was a good reminder of why it is important to have a diversified portfolio since individual stock prices can be unpredictable and often move in different directions. 

GDP Growth, Consumer Confidence, and Inflation

There was a flurry of economic releases over the past week, all of which had the potential to move the market, but none seemed to have had much of an impact. This is understandable given how the releases were overshadowed by the volume of earnings releases and focus on the Fed meeting, which as predicted was anti-climactic.  Of note was Q2 GDP came in below consensus estimates but still indicated some of the strongest quarterly growth in decades and provides evidence to the fact the post-pandemic economic recovery remains intact. Consumer Confidence and the University of Michigan Consumer Sentiment index both beat expectations, indicating consumers continue to feel good about the economy and consumer spending can be expected to remain strong. 

Also of note is the core personal consumption expenditures (Core PCE) index, which happens to be the Fed’s preferred measure of inflation, experienced the largest increase since June 1991 and further signals rising inflation. This is a key theme we continue to monitor and are positioning portfolios accordingly to not only shield against inflation but also take advantage of it. 

Looking Ahead

With a high volume of earnings reports and economic releases continuing in earnest, we expect the potential for some market volatility during the next week.  We will be paying special attention to the employment reports, culminating with Non-Farm Payrolls on Friday, to gauge the continuing strength of the post-COVID recovery. 

Like a duck swiftly padding underwater but appearing calm above the surface, we continue our tireless work of keeping abreast of the markets and managing portfolios accordingly to navigate risks and capitalize on opportunities.   

Have a wonderful week!

Nathan Zeller, CFA, CFP®

Chief Investment Strategist

Secured Retirement

nzeller@securedretirements.com

Secured Retirements Insights 7/26-7/30

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What a difference a day makes

I grew up in South Dakota, where they have a saying, “If you don’t like the weather, stick around for 24 hours.”  It seems the same can be said about the stock market.  On Monday, the markets suffered the worst single-day losses of the year due to concerns about rising coronavirus cases from the spread of the Delta variant and the potential for restrictions being re-imposed.  Given the strong gains in the market already this year, many analysts (a.k.a. talking heads/fear mongers) have been sounding the alarm about a pull-back. Hence, there was worry Monday’s losses were the beginning of a longer-term downward trend.  Fortunately, these fears were soon quashed as the markets quickly recovered losses and went on to show gains by the end of the week.  Besides shrugging off concerns about coronavirus, the market was driven higher by strong earnings reports, especially from Dow components IBM, Coca-Cola, and Johnson and Johnson. 

Those who did not keep a daily eye on the market last week would have thought the market simply enjoyed a march upward.  Monday’s sell-off saw the S&P 500 experience a 2% single-day loss, but by Friday, the S&P 500 was higher by almost 2% compared to a week ago.  This is a great example of why investors should not be concerned with day-to-day, or even week-to-week, market gyrations but instead should stay focused on the longer term. 

Many people remain on edge regarding another round of coronavirus cases spreading, specifically the potential for restrictions being re-imposed.  My prediction is these concerns abate as time passes, especially as more people are vaccinated.  Also, it seems the majority of people in the U.S. and most developed countries have “COVID fatigue,” so any large-scale restrictions would be met with resistance and, in most cases, would not be politically popular.  Coronavirus will become less, and less of a factor on the market – similar to when you throw a rock in a lake, the first splash is the biggest but the farther away you get, the smaller the ripples. 

Housing

It was a relatively quiet week for economic releases, with the exception being housing data.  The National Association of Homebuilders (NAHB) Housing Market Index, Existing Home Sales, and the number of building permits all came in below expectations while Housing Starts were above expectations.  There is no doubt the housing market may be a little “over-heated” and due for a slow-down but should be more of a leveling-off versus a crash like we experienced in 2007/2008 since conditions are different this time, namely tighter lending standards, lower interest rates and a growing demographic of people looking to purchase a home.  The recent housing craze has been driven by an increase in demand since workers are not as geographically constrained due to the ability to work-from-home and supply-chain issues with raw materials due to COVID-related shutdowns.  The supply chain issues are being worked out with raw materials prices normalizing, but labor costs remain a concern. 

Looking Ahead

The next week will be busy on the earnings front with tech leaders Apple, Microsoft, Alphabet (Google), and Amazon set to report.  Any downside earnings surprise could have an adverse impact on the market, but that seems unlikely since all have historically provided strong, consistent earnings, which does not seem likely to change in the near term.  It is also a heavy week for key economic releases, including Durable Orders, Consumer Confidence, Gross Domestic Product (GDP), and Personal Consumption Expenditures (PCE), any of which have the potential to move the markets if there is a large variance from expectations.  PCE is the Federal Reserve’s primary measure of inflation, so there could be special attention paid to that number, not necessarily by the financial news outlets but more so by economists and analysts.  Speaking of the Fed, the Federal Open Market Committee (FOMC) meets on Tuesday and Wednesday, but we do not expect any surprises since they generally telegraph expectations well in advance.

That will bring us to the end of July. Historically, August has been a relatively quiet month in the markets, gearing up for what have traditionally been the more volatile months of September and October.  We will have to see if this year brings more of the same. 

Have a wonderful week!

Nathan Zeller, CFA, CFP®

Chief Investment Strategist

Secured Retirement

nzeller@securedretirements.com