Q1 2019 Investment Outlook Video

2019 Annual Limits for Tax and Wealth Planning

The Internal Revenue Service recently announced the annual inflation adjustments for a number of tax provisions for 2019. These went into effect January 1, 2019 and are not intended to be used for 2018 tax returns. We fully recognize that most of our clients are currently preparing their 2018 taxes and we encourage you to revisit some of the major changes associated with the 2017 Tax Cuts and Jobs Act that will impact 2018 tax planning.  

Enclosed you will find the 2019 Annual Limits Guide from the College for Financial Planning®, which is a reference for a variety of tax and wealth planning figures. We manage assets for a broad range of clients who are at different stages of their lives, so we recognize that some of the information may not be pertinent to you.

The changes for 2019 are not nearly as comprehensive as last year. Here are a couple highlights that may impact your planning this year:

  • There are still seven tax rates, but the brackets have changed slightly to adjust for inflation and wage growth

  • Traditional, Roth and SEP IRA contribution limits have increased in 2019 as have 401(k) plan employee contribution limits plus catch-up provisions (see retirement plans section of the 2019 Annual Limits Guide). The income limits for funding IRAs and Roth IRAs have also increased

  • Annual gift tax exclusion remained $15,000 for individuals and $30,000 for couples

  • The federal transfer (gift, estate and generation-skipping) tax basic exclusion increased to $11.4 million from $11.18 million

  • The standard deduction increased to $24,400 for married filing jointly and $12,200 for individuals. Taxpayers age 65 and older or taxpayers with vision loss may be eligible for an additional $1,300 deduction

  • Medicare Part A, B and D monthly premiums have increased

  • The Social Security wage base increased to $132,900 and the Social Security cost-of-living adjustment for 2019 is 2.8 percent, up from $128,400 and 2 percent respectively

  • The Qualified Charitable Distribution remains in place, allowing IRA owners who are 70 ½ or older to donate up to $100,000 annually directly from their IRA to qualifying public charities

As in past years, we take this opportunity to encourage you to review and update your estate plans, particularly if you haven’t done so in the last five years. Marriage, divorce, birth, a child reaching adult-age, changes in health, an acquisition or a sale of assets can affect the accuracy of your documents and therefore your intentions.

It is important to have a valid will or trust that provides clear and appropriate instructions to your personal representative and heirs; one that ensures your assets will be distributed in keeping with your wishes. A good estate plan may reduce your estate tax liability and can prevent, if desired, your assets from being subject to probate. Please contact your portfolio manager if you would like assistance updating the titles on your accounts or beneficiary designations and we will help you with the process.

This is also an excellent time to revisit your financial goals and objectives. Ferguson Wellman and West Bearing have planning resources and forecasting tools to help you address your short- and long-term goals as well as important questions regarding retirement, gifting and lifestyle. We are pleased to provide this complimentary planning service to all our clients. Your portfolio manager can initiate this process for you and coordinate with your accountant and estate planning attorney when appropriate.

Please contact your portfolio manager if you would like assistance updating the titles on your accounts or beneficiary designations and we will help you with the process. 

Any tax or estate planning information in this communication is not intended or written by Ferguson Wellman Capital Management or West Bearing Investments to be used, and cannot be used, by a client or any other person or entity for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing or recommending to another party any matters addressed herein. And advice in this communication is limited to the conclusions specifically set forth herein and is based on the completeness and accuracy of the stated facts, assumptions and/or representations included.  In rendering our advice, we may consider tax authorities that are subject to change, retroactively and/or prospectively, and any such changes could affect the validity of our advice.  We will not update our advice for subsequent changes or modifications to the law and regulations, or to the judicial and administrative interpretations thereof.

Disclosure:
This information in the links to College for Financial Planning were not published by Ferguson Wellman or West Bearing.  We do not take any responsibility for reviewing, updating or insuring accuracy of information included in the information. Ferguson Wellman and West Bearing disclaim responsibility for the legality of materials and copyright compliance on other publications or websites. This is provided for informational purposes only.

Disclosures

 

A Good View of Long-Term Investing

A Good View of Long-Term Investing

This week, USA TODAY’s Adam Shell announced his retirement as money reporter following Wall Street. On Monday, he shared some parting words for his readers that are good reminders about taking a long-term approach to investing.

Leave the Past Behind

Leave the Past Behind

Stocks put in a bottom on Christmas Eve of 2018 and have since rallied close to 10 percent. While December of last year was the worst since 1931, we believe that the worst is behind us.

Growing But Slowing

Growing But Slowing

2019 is off to a turbulent start. The first couple trading days of the year were the worst in 18 years, only to be eclipsed by a huge rally today that left equity investors a bit richer for the week, albeit whipsawed in the process.

Hosfield Quoted in Portland Tribune

Hosfield Quoted in Portland Tribune

2018 is in the history books and, if anything, we were surprised at how little changed from the previous year. Unemployment was still at record low levels. Wages failed to increase significantly. Housing prices continued to skyrocket. And while some pundits were talking about the economy starting to slow down, economist John Mitchell assured us that the economy will continue to grow in 2019.

Outlook 2019

Outlook 2019

 After six years of exceptionally low “turbulence,” volatility returned with a vengeance last year. We expect this bumpy  flight path to persist as investors digest slowing economic expansion, materially lower earnings growth and broadening trade and political tensions.

Turning the Page

Turning the Page

As we look back on 2018, we can summarize the year as one where volatility emerged at the same time equity markets and the economy diverged enormously. In fact, 2018 is estimated to produce the strongest economic growth since the Global Financial Crisis at 3.0 percent.

The Present We Didn’t Ask For

The Present We Didn’t Ask For

While expectations were for the Fed to raise the federal funds rate by 0.25 percent, there was a small glimmer of hope that they may hold pat.

Walking Slowly in a Dark Room

Walking Slowly in a Dark Room

When the Federal Reserve meets next week, everyone will be waiting to hear what they have to say about future interest rate hikes.

Market Seesaw

Market Seesaw

With a week subdued by a day of mourning, traders hoped market volatility would follow suit: it did not. In less than three trading sessions the S&P 500 traded down five percent, the Dow Jones Industrial Average lost more than 1,400 points and small cap stocks lost 6 percent.

Trade Policy Tango

Trade Policy Tango

This weekend, many world leaders will travel to Buenos Aires, Argentina, for a meeting of the Group of Twenty, also known as, “G20.” Although the G20 does not have the power to enforce policies, the outcomes of G20 summits have been highly influential to global policy.  

A Time for Thanksgiving

A Time for Thanksgiving

For a holiday-shortened week, this one is experiencing more than its fair share of action.

Slowing, Not Shrinking

Slowing, Not Shrinking

As the U.S. expansion draws closer to becoming the longest on record, a number of economic and political risks have emerged or intensified in recent months, leading to global equity market weakness.

The Way It Is

The Way It Is

It was a busy week in Washington with a highly anticipated midterm election followed by the Federal Reserve meeting. The results of both came in as expected although it seems the markets were not synced to that result.

More Attractive Valuations

More Attractive Valuations

As we expected at the beginning of the year, S&P 500 valuations have contracted year-to-date. Typically during an economic expansion, we see stocks move higher with earnings. Investors are willing to pay more for those earnings with the assumption that growth will continue.

Glass-Half-Empty Earnings Season

Glass-Half-Empty Earnings Season

On Wednesday this week the S&P 500 plunged by 3 percent on cumulative fears of slowing economic and earnings growth as well as concerns of a slowdown in China and the Federal Reserve being too aggressive in increasing short-term interest rates.

Short Pullback in a Long Bull Market

Short Pullback in a Long Bull Market

In recent weeks, the 10-year U.S. Treasury rose to three-and-a-quarter percent—a level not seen since 2011. In addition, the stock market sold off five percent from all-time highs, volatility has risen and the Chinese and European markets dipped. All this amid a backdrop of good corporate earnings and moderate-to-good economic news.

Growth Gain, Stock Pain

Growth Gain, Stock Pain

Global markets sold off sharply on Wednesday and Thursday as investors continued to wrestle with a diverse set of risks.

A Bump in Social Security Income in 2019

A Bump in Social Security Income in 2019

Next year, individuals will see an increase in their Social Security benefits.