A Webinar Recap: Navigating 2024 

A summary from our recent webinar including a review of 2023, 2024 Market Outlook, and planning tips for the new year.

New Year, New Opportunities

Don’t let the New Year be just another calendar change. Use it as a powerful springboard to assess your finances and unlock opportunities for greater stability and growth. In our recent webinar, Navigating 2024: Key Updates, Market Insights & Assessing Your Financial Wellness, we looked back at the market in 2023 and discussed updates shaping 2024. The Hunt Valley Wealth team walked us through different ways to save for retirement and how to assess our financial wellness. Let’s highlight some of the insights our panelists shared to help you identify areas of your plan that may need reviewing.

Secure Act Revisited

A 2018 study by Northwestern Mutual found that one in five Americans have no retirement savings at all, while one in three of those closest to requirement have less than $25,000 saved.[1]

To address this, Dani Ryan, CFP®, CDFA®, CRPC®, Senior Wealth Advisor here at Hunt Valley Wealth, introduces the topic of The Setting Every Community Up for Retirement Enhancement (SECURE) Act and its aim to help more Americans save for retirement. In 2022, the SECURE Act 2.0 was passed, which expanded on the original act with the same goal, according to the United States Congress.

Matthew Cheney, CFP®, CPWA®, CIMA®, Senior Wealth Advisor here at Hunt Valley Wealth, outlines the critical considerations between SECURE Act 1.0 and 2.0:

• 1.0 – Became law on 1/1/2020.
  • Fundamental changes to consider in 2024:
    • Required Minimum Distribution (RMD) age moved to 72
    • End of stretch IRA for beneficiaries
• 2.0 – It became law on 1/1/2023 and will be a series of changes over the next few years.
  • Fundamental changes to consider in 2024:
    • RMD age moved to 73, and as far as age 75
    • Reduced RMD penalties
    • Beginning of “Rothification”

2024 Planning Updates

As discussed in our webinar below are some critical updates to look out for in 2024:

•  Social Security & Medicine
  • 3.2% COLA for Social Security Benefits
  • 5.9% increase in Medicare Part B premiums
• Tax & Charitable Planning
  • Qualified Charitable Distributions are now indexed for inflation, allowing you to send money straight from your retirement account to a qualified charity. 
  • Annual Gifting Limit changed to $18k in 2024 up from $17k in 2023.
  • Tax Cuts and Job Act expires 1/1/2026
• Education Planning – Funding a child’s education looms large during financial planning, highlighting its significance for you and your family. As discussed in our webinar, a 529 plan also known as Qualified Tuition Program, is an investment account designed specifically for education expenses, with tax benefits to incentivize saving for future learning. While this is a great planning method, questions frequently arise around unused funds. Through the Secure Act 2.0 moving into 2024, unused 529 plan funds can now be rolled into a Roth IRA with certain requirements and limitations.
• Retirement Planning – A poll conducted during our recent webinar showed that people were most interested in planning for retirement.
  • “Rothification” is here to stay, which is the idea to incentivize or mandate the use of Roth accounts, alongside or instead of pre-tax ones, for saving for retirement.
  • IRA catch-up limit indexed for inflation
  • Workplace emergency savings allows the retirement plan to set up a separate account for emergencies such as car repairs, home repairs, etc.
  • Matching student loan repayments
  • No more RMD for Roth 401(k) balances

Now that we have reviewed vital updates to consider while planning let’s examine the market.

2023 Market Review and 2024 Outlook

The folly of market forecasts was proven once again, so let’s examine what happened last year and what’s on tap for the new year.

2023 Market Review: Lots of uncertainty going into 2023, and many headline risks like the regional banking crisis. Many called for a recession. As Matt Holman, CFA, said, “2023 will be better remembered as the year of the most widely predicted recession that never came…Those who maintained a longer-term outlook and did not overreact to any of those headline risks were rewarded.“

2024 Outlook:  As we enter 2024, there have been many predictions and topics on people’s minds, from changing interest rates to the risk of recession. In our recent webinar, we conducted a poll to see which topic (2024 Elections, Change in interest rates, Persistently high inflation, Risk of a recession, Fundamentals of individual companies) was top of mind for our audience in 2024. The results were clear: the upcoming election is the subject on everyone’s mind, so let’s start there. 

• 2024 Election: There have been notable trends throughout history regarding election years and who holds office. Predicting how election results will impact investment returns is complicated. It is not always black and white but rather much more nuanced, as a multitude of factors drive the market’s response.  Don’t let election headlines send your investment strategy into a tailspin. Matt Holman offers a crucial reminder: while short-term volatility is possible, these fluctuations rarely dictate the market’s long-term trajectory.
• Inflation and Interest Rates could follow one of three paths:
  • Continue raising rates
  • Hold Steady
  • Rate cuts to help stimulate growth
• The Risk of Recession has been talked about for quite a while and is often a topic that comes up with your financial advisor. Remember that market pullbacks are normal and are not always a bad thing. Focusing on the long term when planning for your future is vital.

Accessing Your Financial Wellness

In the final segment of the webinar, Matt Cheney reminded us of the different ways you can save for retirement and shared a new planning worksheet that can assess your financial well-being. 

• Retirement Savings: understand the different ways and how each can help you plan for the future.
  • After-Tax: Bank Account, Trust Account, Brokerage account
  • Pre-Tax: Traditional 401(k), 403(b), traditional IRAs
  • Tax-Free: Roth 401(k)/403(b), Roth IRAs
• Do the Work: Stay on track with your New Year’s resolution by understanding your Financial Wellness. 

Download our Financial Wellness worksheet here.

Conclusion 

It’s a new year and an opportunity to focus on your financial wellness. Work with your financial advisor to understand and review your planning goals. 

Remember to:

1. Keep your plan adaptable
2. Focus on the fundamentals
3. Prepare not predict  

Watch our webinar on-demand to hear more from our panel of experts on the impact of 2023 and the key updates shaping 2024.

The “Navigating 2024” is the third installment in the Hunt Valley Wealth webinar series. 

*Citations
1. Northwestern Mutual: 1 In 3 Americans Have Less Than $5,000 In Retirement Savings