Broker Check

The RFG Weekly Wealth Report

May 06, 2019

Stocks were up and down last week, and the three major benchmarks ended up little changed after five trading days. The S&P 500 rose 0.20% for the week; the Nasdaq Composite, 0.22%. The Dow Jones Industrial Average declined 0.14%.  


A well-landscaped community has major impacts for residents and businesses in the area with increased home values, reduced crime rates, and improved air quality which is why cities plan and budget to spend millions annually on landscaping projects. 

93% of real estate agents consider landscaping as one of the top 5 most important projects a homeowner can do to increase their home value. Depending on the size and quality level of the project, landscaping improvements can increase the value from 5 to 20 percent and offers one of the highest ROI for homeowners, ranging from 200 to 400 percent.  


The MSCI EAFE index, a benchmark for international stocks, declined 0.21%. 

The Fed Emphasizes Patience 

The Federal Reserve held interest rates steady at its May meeting. Its May 1 policy statement noted "solid" job growth and economic activity, but only tame inflation pressure.

While the Fed was not expected to make a move, some investors wondered if its latest policy statement might hint at the possibility of a rate cut later this year. No such hint appeared. Fed chair Jerome Powell told the media Wednesday that "we don't see a strong reason for moving in one direction or the other."

Indications of a Thriving Economy

Employers added 263,000 net new jobs in April. Economists polled by Bloomberg forecast a gain of 190,000. The jobless rate fell to 3.6% last month, the lowest in half a century.

This better-than-expected employment snapshot comes on the heels of a first-quarter gross domestic product reading that surprised to the upside. In another bit of good news, personal spending rose an impressive 0.9% in March. 

Final Thought

On Wednesday and Thursday, stocks fell in the wake of the Fed policy statement. Friday, they more or less recouped their losses after the impressive April jobs report. Ups and downs like these come with the territory when you invest; the key is to stay patient and think long term instead of short term.   



Many retirees pay a higher marginal tax rate on their income in retirement than they do before retirement - even if their tax bracket falls in retirement years. 

This increased rate is due to the fact that at certain income levels, up to 85% of Social Security benefits become taxable. At this point, the ability to control your income in retirement becomes an extremely valuable tool. This is a key, but often overlooked, factor in helping taxpayers understand what they can do now to make their financial portfolio last longer. 

Investors have a few tools available that may help them control income in retirement. They might contribute before retirement to a Roth 401(k) or Roth IRA instead of contributing to a 401(k) or traditional IRA. With the Roth's, taxes are paid at pre-retirement marginal tax rates that will be the same as their current tax bracket, instead of at post-retirement rates that may be 185% of their tax bracket. They may also consider large Roth conversions at the beginning of retirement to help reduce taxable income in future retirement years. 

It may also be worth delaying Social Security benefits until age 70. Delaying taking Social Security from age 66 to age 70 adds 8% to your benefit annually, which adds up to significant dollars. In addition, only 50% of the Social Security benefit is included in provisional income used to calculate Social Security taxes, so when you do turn on Social Security benefits, offsetting this with a reduction in 401(k) withdrawals can help provide tax savings. This strategy has the potential to sharply reduce the taxable amount of benefits, which could lower annual tax bills each year beginning at age 70.

As always, please contact my office with any questions or financial concerns you may have.

Have a great week!