The Week on Wall Street
Shrugging off COVID-19 infections and the disruption at the Capitol on January 6, stocks powered higher to kick off a new year of trading.
The Dow Jones Industrial Average gained 1.61%, while the S&P 500 increased by 1.83%. The Nasdaq Composite index, which led throughout 2020, picked up 2.43%. The MSCI EAFE index, which tracks developed overseas stock markets, rose 1.45%.
FACT OF THE WEEK
Among Yale University’s collection of cuneiform tablets are three clay tablets, each containing a recipe collection - for a total of around 35 recipes. Dating back to 1700 B.C., these Mesopotamian tablets are the world's oldest cookbooks.
According to experts, the dishes were meant to be served for royalty. The recipes include many varieties of stews and broths, mostly meat-based with a few vegetable options, as well as some pastries.
Fireworks to Start the New Year
Stocks got off to an inauspicious start amid the stuttering pace of vaccine distribution and concern that the economic recovery might take longer than anticipated. Uncertainty over the looming Senate runoff election in Georgia added to the broad retreat that marked the first day of 2021 trading.
From there markets turned higher, aided by firming oil prices with subsequent support provided by the Georgia Senate election results, which lifted hopes of additional fiscal stimulus. Stocks managed through political unrest mid-week, with banks, economically sensitive stocks, and technology shares leading the way.
The yield on the 10-year Treasury rose above 1% for the first time since March as investors fled bonds in anticipation of new federal borrowing.
Stocks touched all-time highs on the final trading day, capping a strong week of performance.
FINANCIAL STRATEGY OF THE WEEK
Tax Benefit and Credits: FAQs for Retirees
It is wise to consider the potential impact on your income taxes after you retire, and understandably, lots of questions can arise. Listed below are some answers to just a few common questions from retired taxpayers.
What types of income are taxable?
Some common types of taxable income include military retirement pay, all or part of pensions and annuities, all or part of individual retirement accounts (IRA), unemployment compensation, gambling income, bonuses and awards for outstanding work, and alimony or prizes.
What types of income are non-taxable?
A few examples of non-taxable income are veteran’s benefits, disability pay for certain military or government-related incidents, worker’s compensation, and cash rebates from a dealer or manufacturer of an item you purchased.
Why is my pension taxed?
It depends on how the money was put into the pension plan. For example, if all the money were contributed by the employer or the money was not taxed before going into the plan, it would be taxable. When your contribution is from already-taxed dollars, that portion of the pension is not taxed, but must be recovered over your life expectancy.
It's best to discuss your specific tax issues with a qualified tax professional.
As always, please let us know if there is anything we can help with along the way or any financial concerns you may have.