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I’ll never forget a story my uncle told me many years ago about how he ventured into a large field on his dairy farm alone. When a good distance from the fence line he looked up the hill, and in near disbelief saw an angry bull staring at him 100 yards away signaling a charge. Seconds later, knowing he couldn’t win a race to the fence, and with the bull hurling towards him, he had the courage and understanding to run at the bull, which in its own disbelief turned around and sprinted over the hill! That decision gave my uncle the opportunity he was looking for and likely saved his life. It’s critical for investors to realize the stock market is primarily a psychologically driven entity, and that its cyclical peaks and valleys are more accurately measured by investor sentiment than other factors. Famed, late investor, Sir John Templeton, wisely perceived that “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria.” It’s notable Templeton defined the stages of the market cycle with exclusively psychological terms. What are some reliable measures of market sentiment, where does sentiment stand in the present bull market, and what disciplines can apply this knowledge to your benefit?

Measures of general market sentiment include, but are not limited to:

• The general attitude towards stocks of the people in your own sphere of influence. When normal conversations universally begin turning to the stock market, a cyclical top or bottom likely approaches.

• Widely read newspapers and magazines routinely make highly uncharacteristic predictions about the stock market right before major cyclical turns. Look for claims like, “Will stocks ever go down again?”, or “The stock market is roadkill.” 

• Market-wide cash flows will reveal where uneducated money is being directed, while the COT (Commitment of Traders) Report shows where educated money flows.

This week Stansberry Research revealed that after two years of soaring stock prices, not only are the investing masses not “all in” on stocks, they are buying bonds at ten times the rate of stocks and building cash Money Market positions towards an all-time high.¹

Helpful disciplines may include:

• Understand the biggest risk today lies in not owning the types of assets that tend to appreciate in a highly inflationary culture, assets like real estate, high quality stocks, and other hard assets. A Money Fund paying 5% may be the best rate in decades, but it still devours wealth at 2% annually when real inflation is 7%!

• Consider positioning your long-term investments at the high end of your personal risk tolerance level when the major stock indexes are above their respective 200 Daily Moving Averages, and at the low end when they reside below it. 

• Maintain ample cash savings so long-term investments can stay invested and serve their important purpose of building wealth, wealth that in a high inflation society you will likely need in the future.

Knowledge of a 2,000-pound angry beast packed with muscle, coupled with the emotional fortitude to act on that knowledge equipped my uncle to make the right decision at just the right time. God bless your investing efforts as you strive to navigate a market as formidable.

Shaun

“Give a portion to seven and to eight, for you know not what disaster may happen on earth” ~Ecclesiastes 11:2

1 Stansberry Research, Review of Market Extremes by Brett Eversole, June 12, 2024

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any opinions or forecasts contained herein reflect the subjective judgments and assumptions of the author.

https://www.fivestarprofessional.com/spotlights/90982

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Following established trails up a forested mountain does not resemble devising one’s own advance of the contours of a snow or ice-covered alp. One requires a modern map; the other requires deep study and an intimate knowledge of the topography to be traversed. I recall using three software programs to carefully plan our first climb of Mt. Whitney’s Mountaineer’s Route in 2010, which in a white-out would have led us to an impasse right under a massive unstable cornice! Good visibility exposed the error from a mile away, but seldom does ineptitude prove inconsequential in such a hostile environment. The achievement of your personal and financial goals in today’s world is equally complex, which reveals the impetus of a formidable challenge laden with deadly pitfalls. Consider the framework of a successful plan, customizable to particular family dynamics:

• Identify and prioritize primary financial goals, such as a comfortable retirement, funding a child’s education, buying a second home, or creating a succession plan for your business. Be as specific as possible in defining each objective.

• Map each goal separately with a conservative time frame in mind. It’s far easier, and far less disruptive to other priorities, to push an outlay back than to pull it forward.

• Fund each objective with a separate investment account, as varying time frames will result in distinct risk levels, return objectives, and funding requirements.

• Use every tax advantage available to you in the pursuit of each goal, realizing the best tax plan results in the lowest lifetime tax, not necessarily the lowest present year tax.

• Use every financial principle at your disposal in the appropriation of your hard-earned, God-given capital. Become well acquainted with timeless financial principles, like diversification, dollar-cost-averaging, dividend compounding, position sizing, maintaining an exit plan, and rebalancing risk.

• Keep investment expenses at a minimum, which directly reduce investment returns and the probability of achieving your goals.     

• Annually monitor progress towards each endeavor and adjust risk/allocation, return objective and funding commensurately.

Like mountaineering, financial planning consists essentially of identifying specific priorities, appropriating resources towards those ends while applying every principal advantage, and then adjusting the approach as progress is consistently monitored. God bless your planning efforts!

Shaun

“A wise man thinks ahead” ~Proverbs 13:16

“The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to poverty” ~Proverbs 21:5

“For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it?” ~Luke 14:28

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any opinions or forecasts contained herein reflect the subjective judgments and assumptions of the author.

Dividend payments are not guaranteed and may be reduced or eliminated at any time by the company.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

Dollar cost averaging involves continuous investment in securities regardless of fluctuation in price levels of such securities. Investors should consider their ability to continue purchasing through fluctuating price levels. Such a plan does not insure a profit and does not protect against loss in declining markets. 

https://www.fivestarprofessional.com/spotlights/90982

Award based on 10 objective criteria associated with providing quality services to clients such as credentials, experience, and assets under management among other factors. Wealth managers do not pay a fee to be considered or placed on the final list of 2012/2022 Five Star Wealth Managers.

Cultivating a vegetable garden is one of the most enjoyable and rewarding experiences I’ve had. Organically enriching the soil, rotating crops, companion planting cohabitant species, timing climatic growth and fruit-bearing cycles, and, of course, harvesting and enjoying the bounty is a truly enriching endeavor. Let’s consider the foundation, forms, and fruit of wealth-building, which can be equally rewarding. 

A sturdy foundation is critical for the stability and resiliency of your estate, and it consists of:

• Income, which is essential and requires work. Maximize income by using your God-given talents, with specialization in your field, and working hard. Think favorably about work, and never stop learning.

• Positive cash flow, which requires income to exceed spending. Maintain a strict budget and live below your means.

• Emergency savings equal nine months of total household spending.

• Strict debt management. Avoid consumer debt, and do not attempt to retire while in debt.

• The right amount of the right type of life insurance, so your estate can survive an untimely death.

While wealth-building comes in many forms, certain consistencies necessarily apply. Once the foundation is fully formed, invested capital must earn an average after-tax return greater than the rate of real inflation; otherwise, any perceived wealth-building is a mirage. Secondly, catastrophic risks must be identified and insured; otherwise, the estate is one calamity away from extinction. The following formulas may then be pursued:

• Dollar-cost-averaging through systematic purchases into high-quality stock funds tends to lower the average cost per share and helps avoid a large purchase at peak prices.

• Concentration of invested capital into assets which tend to appreciate during periods of high inflation, like real estate, capital-efficient stocks, and other real assets. That being said, understand and honor your personal risk tolerance at all times.

• “Give to Caesar what is Caesar’s,” but have an intelligent tax plan and do not pay a penny more in taxes than is required.

• Minimize investment expenses, which directly reduce returns, and then compound the reduction indefinitely.

• Plan the funding of retirement income strategically, so no more capital is required to fund that need than is necessary, so that invested capital can resume wealth-building.

• Think of the wealth-building process as a multi-generational effort, plan your estate wisely, and teach your children the same.

Finally, the fruits of wealth-building are mentionable:

• Through your diligence and stewardship, it will prove to be God’s faithful provision for you and your family for generations.

• It will incite a spirit of thanksgiving, which is proven to have profoundly positive effects on a person’s general health and happiness.

• It will enable you to give generously to others in need, especially those who can’t repay you, which is a most fulfilling privilege.

•  It will provide opportunities for you to enjoy the fruits of your labor.

While these are great blessings, it’s also mentionable that wealth is a tool, not an identity, and is, therefore, not to be hugged and horded but held loosely and shared. Furthermore, it won’t shield you from the trials and hardships of life on earth, which are apportioned to us all. I hope your consideration of this perspective of wealth-building is a blessing to you, and happy Memorial Day.

Shaun

“What do you have that you did not receive?”~1 Corinthians 4:7

“Precious treasure and oil are in a wise man’s dwelling, but a foolish man devours it.” ~Proverbs 21:20

“God loves a cheerful giver.”~2Corinthians 9:7

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any opinions or forecasts contained herein reflect the subjective judgments and assumptions of the authors only and do not reflect the views of LPL Financial.

Dollar cost averaging involves continuous investment in securities regardless of fluctuation in price levels of such securities. Investors should consider their ability to continue purchasing through fluctuating price levels. Such a plan does not insure a profit and does not protect against loss in declining markets.



https://www.fivestarprofessional.com/spotlights/90982

Award based on 10 objective criteria associated with providing quality services to clients such as credentials, experience, and assets under management among other factors. Wealth managers do not pay a fee to be considered or placed on the final list of 2012/2022 Five Star Wealth Managers.

I remember feeling deep respect for the head guide of our Mt. Ranier climb in 2009 as he opened our introductory meeting with the words, “The risk you are about to take may result in your injury or death”. The climb the sixteen of us were inspired to attempt came with unavoidable life-threatening risks. Likewise, building and retaining wealth in an inflationary culture requires a degree of risk-taking. Absent inflation, this isn’t the case; in fact, in the 125-year period from 1800-1925 America experienced zero net inflation, when wealth creation involved simply spending less than earnings on subsistence and saving the difference; but we are not living in the 1800’s, and inflation changes everything.

The U.S. government’s 1990-Based formula places today’s inflation rate at 7.5%.¹ If accurate, this means a 5% CD or Money Fund, the highest rate in many decades, is losing 2.5% in value before taxes are levied. Today many hard working, fiscally responsible Americans think they are growing their personal wealth as savings accumulate, even as that wealth shrinks in real terms! For simplicity, let’s understand present real inflation is north of the interest earned on cash savings, and identify the facts and strategies that can help us grow our wealth in spite of the Fed’s penchant to resolve government fiscal irresponsibility with currency devaluation. First, the facts:

• To grow real wealth, the average return on all assets owned must produce a net (of taxes) minimum return equal to the real rate of inflation.

• Investment holdings with a return potential higher than real inflation possess some level of market risk.

• An investor who wishes to grow real wealth in an inflationary environment must assume some risk with their investment holdings.

Understand your personal risk tolerance and never stray far from it. Minimize the emotional swings which accompany risk and volatility by investing only in enterprises you understand well. Minimize investment expenses, which reduce returns and compound the reduction indefinitely. Value investments with present income because inflation devalues the promise of future income. Compound dividends in capital efficient businesses over the rest of your life. Cap individual holdings at 5% to limit risk concentration. Eradicate dead money by finding a 4%+ interest rate on all cash savings. To these basic inflation-friendly investment strategies you may want to add:

• Position overall allocation at the high end of your risk tolerance level when the major indexes are above their 200 Daily Moving Averages. Accept higher volatility.

• Position overall allocation at the low end of your risk tolerance level when the major indexes are below their 200 Daily Moving Averages. Seek stability.

• Maintain Stop-Loss orders on all holdings with market risk except for capital-efficient dividend compounders. To avoid algorithmic price abuse, do not enter your Stop-Loss orders into the trading system.

In closing, remember you fight inflation, not deflation; many savers hide in the very cash instruments most quickly devalued by the inflation they fear! Understand you must manage the risk inflation forces you to take, or it’ll manage you, and the market is equipped to inflict the maximum amount of pain on the largest number of investors possible. Be creative and use every means available to mitigate investment risk as you overcome the destructive forces of the modern American inflation.

Shaun

“Wealth gained hastily will dwindle, but whoever gathers little by little will increase it.” ~Proverbs 13:11

“There was a great famine in the city. The siege lasted so long that a donkey’s head sold for eighty pieces of silver, and a cup of dove’s dung sold for five pieces of silver.” ~2 Kings 6:2

1 Shadow Government Statistics, Inflation, May 10, 2024 https://www.shadowstats.com/alternate_data/inflation-charts

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any opinions or forecasts contained herein reflect the subjective judgments and assumptions of the authors only and do not reflect the views of LPL Financial.

Dividend payments are not guaranteed and may be reduced or eliminated at any time by the company.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

https://www.fivestarprofessional.com/spotlights/90982

Award based on 10 objective criteria associated with providing quality services to clients such as credentials, experience, and assets under management among other factors. Wealth managers do not pay a fee to be considered or placed on the final list of 2012/2022 Five Star Wealth Managers.

Thirty-five years of planning folk’s retirements has taught me the vast majority of people do their planning last minute solely to gauge the adequacy of long-term funding; rarely is due consideration given to the many strategic income options available, or the need for a tax smart income plan, one that doesn’t disrupt established investment or estate plans. This makes me think of the mountaineer who trains exclusively in the gym, who has the strength and endurance required for the climb but lacks the technical mountaineering experience to pull it off. It’s not ‘if’ something will go wrong in the mountains, it’s whether one will know what to do ‘when’ something goes wrong. In light of that commonality, let’s consider the guiding principles requisite to effectively mapping a retirement income:

• Maintain a comprehensive budget which differentiates fixed and voluntary expenses. Map both expense assumptions in your plan and observe the impact voluntary expenses will have on your retirement.

• Use fixed income sources, like Social Security, defined benefit pensions, and lifetime income annuities, to fund fixed expenses. Peace of mind may accompany the knowledge one will cover the other.

• Use fluctuating income sources to fight inflation with compounding dividends and growth, and to fund voluntary expenses. We reside in an inflationary culture; to avoid being eaten alive by inflation we must appropriate a portion of our capital to holdings that generally appreciate in an inflationary environment, like real estate, stocks, and other real assets. That said, it is essential to manage risk with these holdings.¹

• Diversify income sources based on need. Applying specific income sources to specific expense types has several benefits. Income which matches the nature, duration, and amount of certain expenses increases continuity in the overall plan. It also applies the financial principle of diversification to one’s retirement income sources, always a prudent maneuver. Finally, it helps avoid disrupting established investment and estate plans, since income streams are not few and inflexible. It takes many technical tools to safely ascend a glaciated mountain!

• Project growth rates on risk-holdings conservatively in your planning, and embrace the withdrawal strategy for those assets that is most complimentary to, and consistent with your customized retirement plan (see Guiding Withdrawal Strategies to Avoid Capital Depletion).  

• Map your retirement income from these various sources with a combination that will keep you in the lowest average tax bracket throughout the duration of your retirement. Understand this requires planning; the lowest bracket today might result in tax abuse later. 

The safest way to survive a big mountain expedition is to be on an accomplished team led by experienced guides. Ask your financial advisor to work with your CPA and Esquire to create a smart income plan, and then studiously apply it.      

Think about it, Shaun.

“In abundance of counselors there is victory” ~Proverbs 24:6

1 Smart Asset, “How to Create Your Own Retirement Income Plan”, Written by Eric Reed, December 3, 2023

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any opinions or forecasts contained herein reflect the subjective judgments and assumptions of the authors only and do not reflect the views of LPL Financial.

Dividend payments are not guaranteed and may be reduced or eliminated at any time by the company.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

https://www.fivestarprofessional.com/spotlights/90982

Award based on 10 objective criteria associated with providing quality services to clients such as credentials, experience, and assets under management among other factors. Wealth managers do not pay a fee to be considered or placed on the final list of 2012/2022 Five Star Wealth Managers.

Frequently and without warning mountain climbers venturing above treeline in winter are presented with the threatening combination of heavy snow and high winds, and the natural response is a panicked retreat. Panic while navigating such elements is dangerous, however, and sometimes safety resides above, not below. At the very moment clear thinking is required, terror can prevail, and when it does the result is often catastrophic. Yesterday the Fed’s favored inflation gauge (PCE) rose 3.7% in Q1, well above the expected 3.4%, even as Q1 economic growth slowed to 1.6%, well below the estimated 2.3%.¹  This was a double whammy of bad news for investors, or so it seemed, and the immediate response on Wall Street was panic selling. Let’s consider the potential implications of this unexpected development:

• Higher inflation may inspire the Fed to slow or even reverse planned interest rate cuts, a restrictive reaction that would threaten stock prices and further slow the economy.

• Slower economic growth may inspire the Fed to cut rates sooner than expected to ward off recession. This Fed reaction could cause inflation to re-surge in coming quarters, which would be a major threat to both stock prices and the economy in the years ahead.

• The combination of higher inflation and slower economic growth may cause the Fed to lengthen its interest rate pause and allow the markets to work this rare imbalance out itself.²

What is an investor to do amidst such a dichotomy of threats to precious capital? Let’s consider a few additional factors:

• The Fed is a politically motivated institution, and we are in a Presidential election year. It is highly likely the Fed will lean towards rate cuts, even at risk of higher inflation later. Also, keep in mind the economy disappointed more than inflation in yesterday’s report.

• Following a fearful crowd in a counterintuitive market is generally a costly mistake. I remember a friend describing a freak storm which hit the heavily populated summit of Mt. Washington one summer day years ago, and the chaos that ensued as dozens injured themselves rushing down the mountain in 90 mph winds, canines included! Pause was the prudent response as the wind, not temperatures, menaced hikers. 

• All three of the major indexes are in a bull market and solidly above their respective 200 Daily Moving Averages. Not a single bear market indicator has triggered, to my knowledge.

• We are amidst an earnings recovery, and the economy has in the past two years proven to be remarkably resilient while enduring serious threats.   

In conclusion, the recent sell-off seems more likely “a dip to buy” than “a forming bear market to sell”. Should the market surprise, remember stop-loss orders exist for an important reason; have them, follow them, and don’t interrupt the process.

Think about it, Shaun.

“I will both lie down in peace and sleep; for You alone, O LORD, make me dwell in safety” ~Psalm 4:8

1 Investor’s Business Daily, “The Fed’s Key Inflation Rate Sizzles As GDP Slows; S&P 500 Cuts Losses”, April 25, 2025 https://www.investors.com/news/economy/federal-reserve-inflation-rate-core-pce-gdp-q1-sp-500/

2 Stansberry Research, The Stansberry Digest, April 25, 2024

The opinions voiced in this material are general, are not intended to provide specific recommendations, and do not necessarily reflect the views of LPL Financial.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

https://www.fivestarprofessional.com/spotlights/90982

Award based on 10 objective criteria associated with providing quality services to clients such as credentials, experience, and assets under management among other factors. Wealth managers do not pay a fee to be considered or placed on the final list of 2012/2022 Five Star Wealth Managers.

Prior to the shot clock, basketball teams facing superior opponents would sometimes stall the game by maintaining possession and refusing to shoot. While these were incredibly boring games to watch, the strategy produced much closer contests by frustrating the superior team and reducing its time of possession and shot attempts. If the goal was to win, as opposed to entertain, this was a prudent strategy for outmatched basketball teams to utilize! It’s critical for modern American retirees to have a withdrawal strategy as thoughtful, for ‘the early retirement bear market’, inflation, and numerous other perils threaten widely dreaded capital depletion. Consider the following approaches as you design your own retirement income plan:

• The 4% Rule seeks to sustain capital for 30 years by withdrawing 4% in year one and adjusting for inflation each subsequent year. This system was built on assumed equity exposure of 50% and has proven less effective with less equity exposure. Other risks include the probability portfolio returns don’t measure up during periods of high inflation and non-allowance for the natural spending patterns of retirees.   

• The Guardrails Approach involves setting a withdrawal rate based on personal risk tolerance and then adjusting annually within set boundaries based on performance. While this is a more dynamic strategy than the 4% rule, the possibility remains that market returns fall below the low range set for withdrawals, resulting in capital depletion.

• The TIPS Ladder consists of a portfolio of Treasury Inflation-Protected Securities with varying maturities. This approach offers a steady flow of income, liquidity, and a level of capital protection during periods of high inflation. Drawbacks include less income than other types of bonds, interest rate risk, and little potential of stock-like returns.

• The ‘RMD-Only’ Approach is self-explanatory, but while this strategy provides the highest assurance early capital depletion will be avoided, a small percentage of retirees will receive sufficient income to meet retirement expenses from Required Minimum Distributions alone. This approach also doesn’t account for early retirement.

Other income strategies can also work well in specific situations, like The Safe Withdrawal Rate, which is a simple annual computation of withdrawals that will limit portfolio declines, and The Hurdle Rate, which pursues investment options most likely to match withdrawal amounts.¹ Think of all the lousy basketball teams that won games by hogging the ball and then hitting a big shot at the buzzer, and be creative when planning your retirement income strategy. Be sure your planning includes income duration, market risk, inflation, and projected rates of return. Remember the biggest aid to income and capital sustenance is fiscal discipline, and realize your plan needn’t be conventional, but effective.

May the Great Provider bless your income planning efforts!

Shaun.

“And my God will supply every need of yours according to his riches in glory in Christ Jesus” ~Philippians 4:19

1 Smart Asset, “What Are Safe Retirement Withdrawal Rates?”, March 14, 2024,

The opinions voiced in this material are general, are not intended to provide specific recommendations, and do not necessarily reflect the views of LPL Financial.

https://www.fivestarprofessional.com/spotlights/90982

Award based on 10 objective criteria associated with providing quality services to clients such as credentials, experience, and assets under management among other factors. Wealth managers do not pay a fee to be considered or placed on the final list of 2012/2022 Five Star Wealth Managers.

‘Knowledge is power’ in at least one practical sense: it equips a person to make wiser decisions. Ed Viesturs, arguably the greatest mountaineer America ever produced, understood this principle when he read “Freedom of the Hills”, a 567page manual on mountaineering, twice cover to cover before putting a pair of crampons on. Warren Buffet consistently makes more profitable investment decisions than most investors because he knows more about the financial condition of the businesses he purchases. Consider the following ways you can increase your knowledge of the Social Security (SS) program to help maximize future benefits:

• Understand payments are based on earnings from your 35 highest income years, and that benefits are reduced for every year under 35 you didn’t work. Consider working until the 35-year mark is reached, even if it requires a part-time job in early retirement.

• Since benefits are also based on age, know your full retirement age (FRA), between age 65 and 67 for most, and the reduction of benefits for those receiving them before FRA by $1 for every $2 earned over $22,320 (2024).¹ Post full-time employment, working part-time and deferring benefits until FRA, especially if the 35-years aren’t yet attained, or if it is but the part-time earnings replace a lower earnings year, can be a highly beneficial strategy, especially for those who live a long life.

• Time your ‘start date’ (see Implications of the SS Start Date) for maximum benefits, and to complement other income sources. For those working full-time past FRA, future benefits continue to increase until age 70. For those who regret ‘triggering’ benefits too early, benefits can be suspended between FRA and age 70, and the claim itself can be withdrawn by repaying total benefits received.

• Have a spousal-benefit filing strategy. Lower-earning spouses can file earlier while the higher-earner’s benefits increase to age 70, at which time the couple can switch to filing on the higher-earner’s income history. Know which strategy best fits into your personal financial plan.

• Review your ‘Yearly Earnings Record’ reported on the annual SS statement and notify Social Security Administration of underreported income.

• Up to 85% of SS benefits are taxable.² Discover what portion of your SS benefit will be taxable and include it as you work out the logistical intricacies of your future retirement income. Have your investment advisor and tax planner work together to help achieve maximum tax efficiency over your lifetime.

Knowledge of mountain weather told Ed Viesturs to sit in his tent and drink hot tea during the 1996 storm that claimed the lives of a dozen climbers on Mt. Everest, including several of Ed’s dear friends, and then he summited in grief to honor their lives in the following weeks. The knowledge you gain of Social Security, in particular your earnings history, taxability of benefits, and claiming options, and the corresponding wise decisions you make on this issue, could be as financially beneficial to your family as Ed’s great decision was to his that fateful day.

Think about it and may your celebration of Easter be enlivened by an unshakeable hope in a resurrected Savior this week!

Your friend, Shaun.

“If you confess with your mouth that Jesus is Lord and believe in your heart that God raised him from the dead, you will be saved.” ~Romans 10:9

1 Social Security Administration, March 28, 2024 www.ssa.gov

2 Smart Asset, “10 Strategies to Maximize Social Security Benefits”, August 18, 2023, by Rebecca Lake

The opinions voiced in this material are general, are not intended to provide specific recommendations, and do not necessarily reflect the views of LPL Financial.

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

https://www.fivestarprofessional.com/spotlights/90982

Award based on 10 objective criteria associated with providing quality services to clients such as credentials, experience, and assets under management among other factors. Wealth managers do not pay a fee to be considered or placed on the final list of 2012/2022 Five Star Wealth Managers.

The concept of investment diversification involves mitigating the risk of a catastrophic loss by owning numerous, low correlation assets. If capping exposure to a single security or asset class is wise because it effectively tempers investment risk, wouldn’t it also be wise to apply this principle to other hazards, like unknown future tax rates on income and gains? The first time I diversified my strategy to maintain core body temperature in the mountains by throwing a survival blanket in the backpack, it saved a dear friend’s life! Imagine a legislative scenario that exposes your lack of a tax strategy and begin diversifying exposure to one of ‘The Big Three’ risks against your retirement, your estate, and the future inheritance of your loved ones: the future tax hike.

I’d like to begin by identifying the potential pitfalls of the traditional retirement account because I believe most investors have allocated too high a percentage of their retirement savings to this “yet to be taxed” account type. Keep in mind this investment option also possesses significant advantages in many instances:

• Since none of your traditional retirement plan dollars have yet been taxed, the IRS co-owns the account with you and can increase their portion with the stroke of a Congressional pen. The probability of this occurring, given the U.S. government’s indebtedness and the unfunded status of Social Security and Medicare, is higher than most people understand, including CPA’s.

• All future withdrawals from traditional retirement accounts are taxed as income, in many cases resulting in a higher tax than the capital gains rate.

• Fully income taxable Required Minimum Distributions (RMD’s) must be taken annually beginning at age 73 whether the income is needed or not, which pushes many large account holders into a higher bracket.

• The Secure Act of 2020 imposed an account depletion requirement for non-spousal beneficiaries at 10 years from the original owner’s date of death; given the high probability your children will inherit your IRA during their peak earning years, this is a brilliant strategy by the IRS, your retirement account partner. You better have a strategy too!

Consider two attractive alternatives to the traditional retirement account, which are highly complementary when funded appropriately, given your individual tax situation:

• The Roth IRA and/or Roth 401(k) effectively release the IRS from the partnership by virtue of the tax deferred growth and tax-free withdrawal benefits. Advanced planning software can effectively compare the Roth and Traditional options within your personal financial plan. The younger you are, the more likely the Roth option will benefit you more than the traditional option.

• A non-retirement brokerage account differs from retirement accounts in that no legal contract is engaged with a fiscally reckless institution which can and has change(d) the rules in the middle of the game to its own advantage. Both gains and losses can be utilized annually to your tax advantage, even against assets not held in the brokerage account. There is no contribution limit, minimum withdrawal age, or mandatory distributions, and virtually any listed security is available. Penalty-free access to a potentially large amount of capital in a relatively tax-controlled distribution is a distinct benefit to investors.

Conrad Anker, perhaps the best technical climber in the world today, packed 200 pounds of exactly the right equipment to succeed in the First Ascent of Meru, formerly thought to be an unclimbable Himalayan peak. Effectively planning your retirement and ultimate estate distribution is equally complex, and the right mix of these three investment options can help you succeed. I strongly suggest that you introduce your fiduciary advisor, in an advisory relationship, to your CPA and have them work together for your tax benefit.

Think about it, Shaun.

“Give a portion to seven, or even to eight, for you know not what disaster may happen on earth.” ~Ecclesiastes 11:2

“The hardest thing in the world to understand is the income tax.” ~Albert Einstein

The opinions voiced in this material are general, are not intended to provide specific recommendations, and do not necessarily reflect the views of LPL Financial.

All investing involves risk including the possible loss of principle. No strategy ensures success or protects against loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

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

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