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12.23.2022 by David Robinson

A Big Thank You and News on Potential Retirement Savings Legislation

Before launching into my last newsletter for the firm, I need to thank you - our clients, friends of the firm, and professional associates. My work and association with all of you, as well as my RSWA teammates, over the past 27 years has truly been a joy and a privilege. It has always felt more like a calling than a job. I leave the firm full of gratitude, wishing all of you the best, knowing that our clients are in excellent hands, and taking away many powerful and positive memories. Lastly, I hope that many of these prized relationships will endure as friendships. Now onto the business at hand.

New Retirement Savings Legislation? Washington observers are saying that new legislation, benefiting retirement savers and retirees (being referred to as “Secure Act 2.0”), is expected to pass Congress before year-end. This legislation will be part of the massive federal spending package that is being finalized, as we write this. New York Times Wall Street Journal Future newsletters will doubtless discuss various aspects and details of this legislation, but here are just a few highlights out of a large number of changes:

  • Starting in 2023, required minimum distributions (“RMDs”) from retirement plans will start at age 73, compared to the current age 72 rule. Starting in 2033, the age for starting RMDs will rise to age 75.
  • Catch-up contributions to retirement plans will be increased in various ways, although high earners will be required to make catch-up contributions to employer retirement plans to post-tax accounts beginning in 2024.
  • Employers will be required to automatically enroll eligible employees with a minimum 3% contribution, but no more than 10%, from their paychecks.
  • Various provisions will facilitate emergency savings and withdrawals from employer plans.
  • Starting in 2024, student loan payments will count as retirement plan contributions for purposes of employer match contributions.

Fear of a Recession vs Positive Inflation Data: In my view, the financial markets are working through an inherent tension between the recent positive inflation news and the growing perception that the U.S. will experience a recession in 2023. I doubt that this tension gets resolved quickly, unless emerging economic data starts to tilt decisively in one direction or the other. Larry Summers, who for my money, is one of the best when it comes to understanding the current monetary and fiscal challenges facing the U.S., recently opined that the Fed’s job is getting tougher. Inflation has not been defeated yet, but the risks of higher unemployment and slower or even negative growth are going up. This means that the likelihood that future rate increases inflict economic pain are accelerating. Washington Post

Ukraine and Russia-A Few Last Thoughts: Ukraine’s President Volodymyr Zelensky, who arrived in Washington, DC this week, gets my vote as man of the year. CNN The U.S., Europe, and many other countries, have by and large, united in support of his courageous leadership of Ukraine. I encourage anyone with access to the Washington Post to read the inestimable David Ignatius’ recent articles about the war. Washington Post Ignatius makes a compelling case that Ukraine is winning the war because it has access to superior technology. It’s all about state-of-the-art drones, satellite imagery, and algorithms on the battlefield.

Lifestyle Notes:

  • A Modern Spy Story in Merrimack, NH: Fans, myself included, of the television show, The Americans, must have done a double take when reading this story about the seemingly ordinary couple running a Russian spy operation out of their home. When not engaging in the typical family activities, the couple was engaged in smuggling sensitive technology out the U.S. with Russia as the ultimate destination. Boston Globe
  • “Because the Bell Rings”: The cryptic heading is the title of a recent essay by Oliver Burkeman, a favorite of mine. He talks about the need we have to be in control and plan everything out-this describes me. But life often comes at us at unexpected times and in unexpected ways that do not always fit with “our schedules”. How to let go of our narrowly scripted plans and engage fully in what life has brought to our attention? The Imperfectionist
  • Boothbay Botanical Garden Light Show Among the Best: If you have not experienced the light show at the Boothbay Botanical Gardens, you are in for a treat. USA Today ranks it the 3rd best holiday light show in the U.S. For Sarasotans (not sure that is a word), the Selby Gardens light show ranked 6th. WMTV
  • Doing Any “VILPA”? Encouraging research shows that very short periods of intense movement occurring naturally during a typical day for many can make a significant difference in all-cause mortality. One example might be walking briskly through a grocery store. Researchers call these activities “Vigorous Intermittent Lifestyle Physical Activities” (i.e., “VILPA”). Boston Globe
  • Exercise to Reduce Cancer Risk: It is known that exercise reduces the chance of incurring some types of cancer. Now we have research indicating that it reduces the risk of metastatic cancer (when cancer spreads to other parts of the body) by up to 72%. SciTechDaily
  • Intermittent Fasting and Type 2 Diabetes: New research shows that fasting may be another promising way to treat Type 2 Diabetes. Please do not attempt this unless under the care and advisement of a medical professional. But it is a promising development. My question would be whether intermittent might be helpful to those diagnosed as being pre-diabetic.
  • The 1987 Album That Changed Christmas Music: Back in 1987, music producer Jimmy Iovine was grieving over the recent death of his father. As therapy, he decided to make a different type of album. It started with a call to Bruce Springsteen. Madonna, Sting, Stevie Nicks, the Pretenders, Whitney Houston, U2, Bob Seger, the Pointer Sisters and Run-DMC joined in. Thus, the infusion of the traditional Christmas sound with pop music in the form of the classic “A Very Special Christmas” album. Washington Post
  • Leo Messi and the World Cup: This was the first year that I followed the World Cup at all. My understanding of the rules is sparse. My passionate son-in-law fan did not seem to fully appreciate my suggestion that the game would benefit from a shot clock. But I began to sense the global level of excitement and watched some of the non-U.S. games for the first time. I liked this story about Lionel Messi, the diminutive star for the winning team, Argentina, for the description of his “growth mindset”. CNBC

A Quote to Consider:Life is long if you know how to use it.” Seneca 

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As always, thank you for reading. Stay safe and be well. We look forward to hearing from you and connecting.


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