As we turn the page from 2022 and enter 2023 (I know I can’t believe it myself), I’d like to offer a heartfelt “thank you” for being part of the Ftacek Financial Services and my team’s journey.
I am so deeply grateful for your trust and presence in my life and I’m sending you my warmest wishes for an amazing and a great start to 2023.
In spite of the uncertainty and obstacles of 2022, the human spirit shone through.
There’s a lot we can’t predict or control about 2023, but as we usher in a new year, can we commit to a few things together?
Committing to Our Dreams
Many dreams (including mine) have been put on hold over the last few years. But let’s recommit to the dreams that inspire us. Together, let’s grow and protect your wealth so you can reach your dreams, retire in comfort, make a difference in the world, and leave a lasting legacy. The desire to help you achieve your dreams motivates my team to work tirelessly on your behalf.
Owning Our Power
With so much out of our control (the markets, the economy, inflation, etc.), it’s essential to focus on ourselves — our hopes, our goals, and our dreams. Identifying and owning the choices we CAN control isn’t just a good financial lesson; it’s a powerful life lesson.
Embracing Kindness and Patience
Let’s demonstrate kindness, patience, love, and respect to one another in these times of increasing polarization. When talking to people I disagree with, I try to remember: “Be kind, for everyone you meet is fighting a hard battle.”
Now let’s get into financial stuff…
While the risk of a recession this year is real, it’s not a given — it’s a prediction. The Wall Street Journal survey of economists puts the risk of a recession within 12 months at 63%.1 On the other hand, Goldman Sachs puts the probability of a 2023 recession at just 35%.2 No one knows what will happen for certain, but it doesn’t look like a recession is just around the corner, not yet.
Recent layoffs are getting big headlines, but they aren’t widespread.3 In order to have the recession most people are imagining (a nasty one), we will need to see a spike in unemployment, falling wages, and yes of course the negative GDP for 2 consecutive quarters. This has not happened yet.
In fact, there’s still a chance that we could avoid a recession or experience only a mild downturn.
Especially if inflation has truly peaked. (Fingers crossed!) There are likely to be stormy waters ahead, especially for employees affected by layoffs. But as we enter the new year, I want to highlight some signs of hope:
Hopeful sign #1: The latest data shows that the U.S. economy grew nearly 2.9% in the third quarter, 2022.4
Hopeful sign #2: Economists think the economy will grow again in the fourth quarter, 2022 as well.
Hopeful sign #3: The Fed might slow down the pace of interest rate hikes soon.5 Stay tuned for the late January Fed meeting.
It’s true, we’re still in challenging conditions as we enter 2023. More volatility is very likely in store for us. But let’s make room for optimism and positivity.
New Rules on Contribution Limits
- Under the age of 50, 401k plan limits are increasing from $20,500 to $22,50010
- 50 years of age and over, the 401k catch-up contribution increases to $7,50010
- IRA contributions are increasing to $6,50010
- 50 years of age and over, IRA catch up contributions remain $1,00010
RMDs and QCDs from Secure Act 2.0
- New Rules on Required Minimum Distribution (RMD)11
- Effective on January 1, 2023, the RMD age has been raised for some individuals based on the following criteria:
- Born in 1950 or earlier: RMD begins at age 72
- Born between 1951-1959: RMD begins at age 73
- Born in 1960 or later: RMD begins at age 75
- Roth 401(k) RMD11
- Beginning in 2024, RMDs are no longer required from Roth 401(k) accounts. RMDs are still required from Roth 401(k) accounts in 2023.
- Qualified Charitable Distribution (QCD) Indexed for Inflation11
- Beginning in 2024, the maximum annual QCD of $100,000 will be adjusted for inflation.
Good things are in store as well
Before I go, I wanted to highlight a few more bits of good news from what was 2022:
- We learned that U.S. child poverty plummeted 80% between 1993 and 2021.6
- Scientists discovered a way to help identify babies at risk for sudden infant death syndrome.7
- Voters elected the first Gen Z member of Congress.8
- A record number of sea turtles laid nests on the Georgia coast.9
As we start a new year, please accept my heartfelt gratitude for your time and trust and warmest wishes for the year ahead. May you and your loved ones be blessed with health, prosperity, and kindness all year long.
With many Blessings in 2023,
Jeremy Ftacek, AIF®
Ftacek Financial Services, LLC.
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