Retirement and Investment Updates

Retirement and Investment Updates

November 02, 2018

Retirement contribution limit updates (2019)

The IRS just announced the 2019 retirement contribution limits. In 2019 you can contribute $6,000 to your IRA, up from $5,500 with the same $1,000 catch up when you are age 50 and above, for a maximum of $7,000. The contribution limit for employer sponsored plans (401(k), 403(b), 457, TSP) has been increased from $18,500 to $19,000 with an additional $6,000 catch up for those 50 and older for a maximum of $25,000 next year.

Be sure to increase your 2019 employer plan contributions to the new limits. Contact us to discuss your increased savings plans options.

Investment News

The US stock market is up for the week and year-to date after a “scary” October, which was the most dire month for the Dow Jones since 2016, for the S&P 500 since 2011, and for the Nasdaq since 2008. But the economy remains strong and we are monitoring our client accounts and adjusting our long-term strategic allocations to weather market volatility.

We are consolidating a few of our fund choices into specific broader index funds offered by Dimensional Fund Advisors. This will ultimately reduce trading costs because factors that we tilt our Vanguard portfolios toward (small-cap and dividend paying stock funds) are already embedded into the DFA funds. In addition, as interest rates continue to increase we are reducing exposure to interest sensitive funds such as intermediate bonds and REITs and using shorter-term money market funds and CDs where appropriate.

Going forward our model portfolios will be a blend of Vanguard index funds, DFA index mutual funds, and occasional State Street ETF's (where we temporarily invest dividends without transaction fees until we are ready to do a rebalance back into the Vanguard and DFA funds).

We'd be delighted to have a conversation with you about our investment strategies and drill down into the features of each of our fund choices and why we include each in your model portfolio. We can also send you information about Dimensional funds and why we went through their training program be approved to offer them to our clients.