MONTH-2-MONTH
OCTOBER 2023
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MONTH-2-MONTH is intended to provide you with updates on AFP and timely financial planning and investment information on a variety of topics.
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Leaves are falling and the days are rapidly getting shorter. It seems the cool fall weather arrives later each year. Now Beggar’s Night is nearly upon us and soon little ghouls and goblins will be hunting for treats. We hope you have a safe and happy Halloween! | | |
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Top 100 – Alexander Financial Planning has been named one of the top 100 financial advisor firms in Ohio for 2023 by Investor.com.
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Tax Withholding for IRA Distributions (including RMDs) – If you had money movement instructions filed with TD Ameritrade, you may need to complete a Tax Withholding Election form. The money movement instructions transferred over to Schwab, however they have applied the default rate of 10% federal withholding to all accounts without periodic distributions in place. For many, 10% withholding may not be sufficient to keep you from owing additional taxes. If you haven’t completed your RMD for 2023 and have money movement instructions on your account, please expect to receive a Tax Withholding Election form very soon.
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Schwab Alliance Access & DocuSign Verification – We recommend establishing online access to your Charles Schwab accounts, if you have not done so already. Schwab offers an option for some form authorizations to be delivered through the Alliance website. You can log in and authorize these forms with your username and password, eliminating the need for those DocuSign security questions. This process applies to some, but not all, Schwab forms.
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AFP October Webinar – “Year End Tax Planning for 2023” with Teri Alexander CFP®, MSFP, CeFT®, AIF® and Nathan Swab CFP®, AWMA®. on Friday, October 27th at noon. Teri & Nathan will discuss some important tax planning steps to take before the end of the year.
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How do you attend? Let Erik know at edanielson@afp-advisors.com. A webinar link will be sent via email the morning of the webinar to those who have expressed an interest in attending. If you know anyone who would like to attend, please pass along the webinar email to them.
- AFP 4th Quarter Webinars:
Unlike our normal process, these webinars will not be hosted live. We will provide information about when/how to view these in the near future.
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November: "Charitable Giving"
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December: "Untangling Social Security"
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It’s hard to believe that I am still mowing my yard on a weekly basis in October. I am sure this is all going to change soon. This is always such a fun month to get outside and do anything. My son and I went on a long hike south of Lancaster a few weekends ago. There were a lot of acorns which made it challenging! Last weekend I ran the ½ Columbus Marathon and finished feeling pretty good. At this point, it is just a matter of finishing and being able to walk the next day. Since the pandemic, I have not attended any conferences and this week I am in Louisville, KY at the National NAPFA. It’s so enriching to learn new things to incorporate into our process and gain new insights that will be beneficial to all of our clients. | | |
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This month wrapped up "birthday season" in our house. August through October brings birthdays for Lisa, Ellie, and Ainsley. It's always fun to plan birthday parties and birthday cakes (Ainsley always goes for the ice cream cake). I'm also reminded about how creative and talented our girls are. Ellie baked a genuinely delicious chocolate cake for Lisa from scratch. She has enjoyed baking since the pandemic, but this was her first ever cake made from scratch, and she did an outstanding job. Ainsley always asks for creative toys for her gifts. She loves crafts, drawing, and painting, and it's exciting to see how far she's progressed over the past few years. | | |
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The trip to Barcelona was amazing! Everything went as scheduled aside from the trip home. The best part was the opportunity to spend time with our son and daughter-in-law. They rented an apartment in the city for a month and extended an invitation. They were wonderful hosts! We were surprised by Carlin’s abilities to communicate with the locals. He ordered all of our meals and we enjoyed the food.
The destination was on my “bucket list” because I wanted to see Antoni Gaudi’s Modernist architecture. We toured several buildings and each was unique. I was not disappointed! As luck would have it, the Spanish National Day holiday occurred during our visit and presented a unique experience. A parade of dancing groups celebrating Armed Forces Day and Christopher Columbus’s discovery of the new world.
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View of the Sagrada Familia from Park Guell | |
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The past month has been rather unpleasant for me, unfortunately. Shortly after the last newsletter went out, I was diagnosed with shingles. It only took a day or two from the symptoms presenting for it to become extremely painful. I ended up missing a few days of work, but even then I still had quite a bit to get done as this was when I was housesitting. It took about 2 ½ - 3 weeks for it to stop being painful and at that point it started itching like crazy. I’m more or less past it now, although the affected area looks like it’ll take a while to completely heal. | | |
Current Economic and Investment Information
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HAPPY ANNIVERSARY – October 12th was the one-year anniversary of the 2022 bear market’s closing low. From close on 10/12/22 through close on 10/11/23, the S&P 500 was up 22.4%. Technology and communication services are the only two sectors that have outperformed the index, while defensive sectors like utilities and consumer staples have lagged. (source: Bespoke)
4TH LONGEST TREASURY BEAR MARKET – Since its closing low of 0.51% on 8/4/20, the 10-year US Treasury yield has increased by over 4.25 percentage points without a 1 ppt decline in between. Since 1962, that marks the fourth longest period that the 10-year yield has gone without its yield falling 1 ppt from a high. (source: Bespoke)
STUBBORN INFLATION – The September releases of the Producer Price Index and the Consumer Price Index both came in higher than expected. On a year over year basis, PPI (2.2%) is below its 10-year average of 2.6%, but CPI (3.7%) is a full percentage point above its 10 year average of 2.7%. (source: BLS)
LONELY OFFICES – US office vacancy rates rose to a 20+ year high of 13.3% in Q3 compared to a post-financial crisis peak of 12.8%. Vacancy rates in San Francisco and Chicago are the highest at 20.1% and 16.3%, respectively. One bright spot is Miami where vacancy rates dropped to 8.8%, the lowest level since Q2 2020. (source: Financial Times)
STINGY CREDIT – In September, the perceived availability of credit for US consumers fell to its lowest level in over a decade. 60.8% of consumers reported that credit was either somewhat (41.8%) or much (19%) harder to get compared to just 7.8% who reported that credit was somewhat (6.5%) or much (1.3%) easier to get. (source: New York Federal Reserve)
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There's no 'free lunch' with high-interest cash options, advisor says. How to plan for taxes
By Kate Dore, CFP®
Source: CNBC
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Savers are now getting higher cash yields after several interest rate hikes from the Federal Reserve. But taxes on those earnings could be a surprise, experts say.
As of Aug. 24, the top 1% of savings accounts were paying average rates north of 4.5%, and the most competitive one-year certificates of deposit offered more than 5.5%, according to DepositAccounts.
Meanwhile, Treasury bills, which have terms ranging from one month to one year, had yields well above 5% as of Aug. 24, and the biggest money market funds were also paying more than 5%, Crane Data reported.
“Everyone thinks it’s kind of a free lunch,” said Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida. “But you’ve got to consider the tax man.”
Click here to continue reading this article.
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The Big Mistakes People Make in Medicare
— and How to Avoid Them
Seniors choosing Medicare plans can be left with higher costs or
fewer doctors than they expected; 'I was so stupid'
By Anna Wilde Mathews
Source: The Wall Street Journal
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Seniors choosing Medicare coverage often fall into hidden, costly traps that can leave them stranded—and unable to get the healthcare they want. But there are ways to avoid the pitfalls, if you know how.
Lothaire Bluteau, 66 years old, an actor who lives in West Hollywood, Calif., last year enrolled in one of the private plans known as Medicare Advantage. After he was diagnosed with prostate cancer last May, he discovered the specialists he wanted to see weren’t in his UnitedHealthcare HMO’s limited network. He faced delays getting tests and treatment.
He got a bigger shock when he tried to get access to more doctors by switching to traditional Medicare, run by the federal government. Bluteau worried about the steep out-of-pocket costs, so he tried to get a fill-in policy known as a Medigap plan that would cover many of those expenses. Yet health insurers said no because of his cancer diagnosis.
Click here to continue reading this article.
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“October proved a riot to the senses and climaxed those giddy last weeks before Halloween.”
- Keith Donohue
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Alexander Financial Planning
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3600 Olentangy River Rd, Ste. C2
Columbus, OH 43214
614-538-1600
Office Hours: Monday - Friday
9:00 AM - 5:00 PM
Registered Investment Advisor
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This material is distributed by Alexander Financial Planning, Inc., (AFPI) and is for information purposes only. Although information has been obtained from sources we believe to be reliable, we do not guarantee its accuracy. It is provided with the understanding that no fiduciary relationship exists because of this report. Opinions expressed in this report are not necessarily the opinions of AFPI and are subject to change without notice. AFPI assumes no liability for the interpretation or use of this report. Financial planning, investment conclusions, and strategies suggested in this report may not be suitable for all investors and consultation with a qualified advisor is recommended prior to executing any investment strategy. No portion of this writing should be construed as legal or accounting advice. All rights reserved.
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© Alexander Financial Planning, Inc.
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