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2023 Newsletter



The SECURE 2.0 Act of 2022, signed into law in December, brings dozens of changes intended to enhance Americans' retirement savings outlook.

The main headliner has been the change to the Required Minimum Distribution (RMD) age: SECURE 2.0 pushed the RMD age to 73 for those born in 1951-1959 and 75 for those born in 1960 or later. Additionally, the penalty for missing an RMD will be reduced from 50% to 25% and, if the mistake is corrected in a timely manner, only 10%. One final RMD change worth mentioning is that starting in 2024, RMDs will no longer be required from Roth 401(k) accounts.

For those nearing retirement, catch-up contributions are getting a boost. This year, employees 50 and older can make a $7,500 catch-up contribution to their employer retirement plans (excluding SIMPLE IRAs) beyond the $22,500 contribution limit. Beginning in 2024, the annual catch-up amount will be indexed for inflation. And by 2025, those aged 60 to 63 will be able to make a catch-up contribution the greater of $10,000 or 50% more than the 2024 contribution limit, which will then be indexed for inflation going forward. Another catch-up contribution change to note is that beginning in the 2024 tax year, any catch-up contributions from employees who earned more than $145,000 the prior year will be made as after-tax Roth contributions.

SECURE 2.0 also includes an interesting provision for employees who are making student loan payments: While employer plans have traditionally based matching retirement contributions on a percentage of what the employee saves for retirement, beginning in 2024, employers may choose to make a matching contribution based on their employees' qualified student loan payments.

Speaking of higher education, beginning in 2024, beneficiaries of 529 college savings plans will have the option to roll up to $35,000 (subject to annual contribution limits) during their lifetime from the 529 plan to a Roth IRA. Note that the 529 plan must have been open for more than 15 years, so this is not a short-term strategy.

Finally, the Department of Labor will create a national "lost and found" database to prevent plan sponsors from cashing out accounts with small balances and to help employees keep track of retirement accounts as they move between jobs.

If you have questions about SECURE 2.0, please give us a call. There are many more provisions than we've listed here, but we will make sure to implement any new strategies that are applicable to our clients.


"If I can put a smile on someone's face, it's been a good day!"

Walsh & Associates class clown Alice Roberts found us in 2003 via an ad in the paper and admits she nearly jumped ship during her whirlwind two-week training period. There was an overwhelming amount to learn about finance and running the office, which functioned much differently from the large corporation where she had previously worked. Alice came in one morning surprised to see that the "maintenance people" hadn't taken the trash out. Her predecessor clarified: "Alice. You ARE the maintenance people."

Luckily, she stuck with us as more clients and employees (and, soon, "maintenance people") were brought onboard. She has played an integral role in our success, made many friends and kept us laughing for the past 20 years.

Please join us in congratulating Alice on her upcoming retirement in March 2023. We wish her all the best!


Medicare coverage for skilled nursing facility (SNF) stays is designed for short-term convalescence following a hospital stay, but knowing the rules can help you get the most out of this limited coverage.

Rule #1: Medicare will cover up to 100 days in a nursing home per illness, but only after a three-day hospital stay. Days 1-20 are covered 100%, while days 21-100 have a patient coinsurance of $200 per day (2023).

Rule #2: To trigger coverage, you must have been admitted into the hospital for at least three days. Being in the ER or "under observation" does not count. You must stay through three midnights.

Rule #3: You must need skilled medical therapy on a daily basis, e.g., wound care or rehabilitation. If you only need help with activities of daily living like bathing, toileting or eating ("custodial care") then you will not qualify for Medicare coverage.

Tips: If you are enrolled in a Medicare Advantage Plan, check whether the plan requires a three-day hospital stay.

Make sure you request and fully cooperate with prescribed skilled therapies while in the SNF.

Know that the "medical improvement standard" is not required to maintain Medicare coverage. Whether you are still improving is not a determining factor for coverage; rather, if the therapies in the SNF are helping you "attain" or "maintain" your highest level of function, have your therapist or physician note this in your chart.


Two big financial buzzwords in 2022 that we quickly grew tired of hearing were "inflation" and "the Fed" (the Federal Reserve). Inflation's rising prices combined with the Fed's tightening monetary policy contributed to a slowing economy, rapidly rising interest rates and significant losses in the stock market. The Fed raised rates 0.5% in December, bringing the total rate increase to 4.25% for the year. The rate hikes have especially impacted interest rate-sensitive areas like homebuilding, business investment and trade. Yet, despite the hikes, gross domestic product (GDP) growth was strong in the third quarter, up 3.2%; fourth quarter GDP was also positive, with the latest reading coming in up 2.7%. This comes on the heels of two quarters of negative growth to start the year when some prognosticators indicated we were already in a "recession."


High and rising inflation caused pain for consumers and markets in 2022, with headline Consumer Price Index (CPI) inflation peaking at a 9.1% year-over-year gain in June. The good news is that there are convincing signs that a sustained inflation downtrend is underway, as the major hot spots of inflation from earlier last year have simmered down. After Russia's brutal invasion of Ukraine sent global commodity prices soaring early in 2022, energy prices declined in the second half of the year. Further, easing supply constraints, combined with lower consumer demand, have allowed inflation to simmer across core goods categories. While shelter inflation remains elevated, we expect it will soon peak and decline to reflect cooling rental markets. The remaining problems for inflation, therefore, are services prices outside of shelter, which are highly correlated with the labor market.


Even after a bounce back in the fourth quarter, stocks had one of their worst years on record. The S&P 500 was down 18.11% for the year, and the tech-heavy Nasdaq index, which has been the apple of many investors' eyes for the last few years, was down 32.38%. Investing internationally did not help returns either, with the MSCI EAFE index down 14.45% and the MSCI EM index down 20.09% for the year. A stronger dollar was a drag on international returns throughout the year but reversed in the fourth quarter as the dollar was much weaker, leading to better returns for international investors. The MSCI EAFE and EM were up 17.34% and 9.7% in the fourth quarter alone. While international investing still has some significant headwinds, it remains an important diversification tool for investors.


The bond market in 2022 was severely impacted by rising interest rates. Bond prices in general move inversely with interest rates, so as rates moved rapidly higher, bond prices plummeted lower. It was the worst year on record for the Bloomberg Agg Bond index since its creation in 1973, with a negative 13.01% return for the year. The Fed has indicated that rate hikes will continue as long as inflation remains above their 2% target. The market is pricing in two or three more rate hikes of 0.25% each before a pause by the Fed to evaluate how effective previous rate hikes have been, since it tends to take around six to nine months to really see their impact on the economy. We expect rates to stay at their higher level but do not see them surging significantly again in 2023. Higher bond yields should help protect investors from future rate hikes as well as provide diversification benefits to stocks that they did not provide in 2022.


The first quarter of 2023 has revealed a growing danger that the U.S. economy could slip into recession. In particular, higher inflation is squeezing consumer wallets, cutting the personal saving rate and ballooning credit card balances. While excess savings from the pandemic supported spending in 2022, this is now drying up. It is unlikely consumers will see further aid from the federal government anytime soon, especially now that we have a divided Congress. That being said, retail sales jumped by 3% in January, meaning that the consumer is handling these conditions well; this is good for the economy, as consumption is nearly 70% of U.S. GDP.

The labor market continues to be a bright spot in an otherwise gloomy environment. The latest employment report for January 2023 showed that 517,000 jobs were added, and the unemployment rate is now at 3.4%, a 50-year low! There appears to be a limit as to how much weakness we may see in employment going forward, as U.S. businesses still face a structurally smaller labor force than in prior decades. Diminished legal immigration—particularly over the course of the pandemic—and baby boomers reaching retirement age have left the economy very short of workers. Wage growth has also moderated and will likely slow further, providing some relief to businesses and inflation.

While a 2023 recession is quite possible, it should be a mild one if it occurs. More importantly, with inflation continuing to fade and fiscal policy likely on hold, the Fed is likely to end its tightening cycle early- to mid-2023, and inflation could begin to ease before the end of 2023. A slower growing economy will likely temper wage demands, helping stabilize corporate margins after a difficult 2022. By 2024, the U.S. economy may well be back on a path that looks much like that of the late 2010s: slow growth, low inflation, moderate interest rates and strong corporate margins. While this may not represent an exciting prospect for the average American worker or consumer, it is an environment that could be very positive for financial markets.

For most investors, 2022 was a very disappointing year with sharply rising inflation and interest rates, falling stock prices and the shock of Russia's invasion of Ukraine. These factors drove consumer sentiment down to its lowest level on record back in June 2022. When investors feel gloomy and worried about the outlook, their natural tendency is to sell risk assets. However, history suggests that trying to time markets in this way is a mistake. When planning for 2023 and beyond, investors should focus on fundamentals and long-term planning objectives.


The Inflation Reduction Act, signed into law in August 2022, aimed to raise revenue and reduce the U.S. deficit via prescription drug reform, tax reform, domestic energy spending and climate change spending—the latter including $13 billion in electric vehicle (EV) incentives in a push for clean energy.

Vehicles purchased in 2022 or before fell under different tax credit eligibility requirements, but new EVs placed into service after December 31, 2022, will qualify for an up to $7,500 tax credit, which the Inflation Reduction Act extended through December 2032.

However, not everyone who purchases an EV will qualify for the full amount—or any amount at all. Disqualifiers include:

  • INCOME - Single individuals with modified AGI (either the year you take delivery or the year before) over $150,000 or married couples filing jointly with income over $300,000 will not qualify for the credit
  • VEHICLE PRICE - Vans, pickup trucks and SUVs (which, as of 2023, includes some crossovers) must have an MSRP of $80,000 or less to qualify for a credit; cars must be $55,000 or less
  • WHERE THE EV WAS ASSEMBLED & SOURCED - Final assembly of the qualifying vehicle must occur in North America, and soon the IRS will release rules for sourcing requirements for battery components

Tax credits for used EVs are the lesser of up to $4,000 or 30% of the price of the vehicle and come with their own set of rules: The buyer's modified AGI may not exceed $75,000 if single or $150,000 if married filing jointly; the buyer cannot be a dependent on another person's tax return; the vehicle model year must be at least two years older than the year of purchase; and the used EV must cost $25,000 or less.

For more details, visit and click on "Electric Vehicle Credits."

Securities offered through LPL Financial, member FINRA/SIPC.

Important Disclosures

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

Investing involves risk including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

U.S. Treasuries may be considered "safe haven" investments but do carry some degree of risk including interest rate, credit, and market risk. They are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.

Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.

International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

The Bloomberg US Aggregate Bond Index is a broad-based benchmark that measures the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities, asset-backed securities and collateralized mortgage-backed securities.

The Bloomberg US Corporate High Yield Index measures the USD-denominated, high yield, fixed-rate, corporate bond market. Securities are classified as high yield if the middle rating of Moody's, Fitch, and S&P is Ba1/BB+/BB+ or below, excluding emerging markets debt.

Gross domestic product (GDP) is the monetary value of all the finished goods and services produced within a country's borders in a specific time period, though GDP is usually calculated on an annual basis. It includes all of private and public consumption, government outlays, investments, and exports less imports that occur within a defined territory.

The MSCI EAFE Index is a capitalization-weighted index that tracks the total return of common stocks in 21 developed-market countries within Europe, Australasia, and the Far East.

The MSCI Emerging Markets Index captures large and mid cap representation across 26 Emerging Markets (EM) countries. With 1,404 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country.

The Russell 2000 Index measures the performance of the small cap segment of the U.S. equity universe and is comprised of the smallest 2000 companies in the Russell 3000 Index, representing approximately 8% of the total market capitalization of that Index.

The Russell 1000 Index measures the performance of the 1000 largest companies in the Russell 3000 Index, which represents approximately 92% of the total market capitalization of the Russell 3000 Index.

The S&P 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

Asset allocation does not ensure a profit or protect against a loss.

Midyear 2023 Newsletter
Joe Walsh's Fall 2022 ACE Sarasota Class Schedule

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