5 Things to Consider With Lump-Sum Pension ffers

The US Federal Reserve Bank came into existence in December of 1913 after Congress passed the Federal Reserve Act. The Federal Reserve had three primary objectives at the time – maximize employment, stabilize prices, and moderate long-term interest rates. While these objectives have changed over time, one of the primary roles of today’s Fed Bank remains to regulate interest rates. This activity by the Fed Bank is often watched closely by financial institutions and foreign governments, but the average person likely paid little attention to these changes in recent decades. Since 2008, following the Great Recession, market interest rates have remained historically low. The target level for the Federal Funds Rate was 3.5% at the start of 2008, and was lowered throughout the year to a target range of 0% to 0.25%. It remained at this unusually low level for seven years, increasing slightly to 0.25%-0.5% at the end of 2015. Rates continued to gradually increase until the COVID outbreak of 2020, when the Fed decided to lower rates to near zero again. Today, we find ourselves in an economic environment not seen since 1994, where the Federal Reserve is increasing rates regularly and rapidly. With this much change in such a short period of time, financial institutions and foreign governments aren’t the only ones paying close attention.

The federal funds rate affects various market rates in the US. This includes US treasuries, certificates of deposit at your local bank, credit card rates, mortgage rates, and even premiums your insurance carrier may charge. If you have a pension through your employer, you may also know that interest rates can influence that. While many people don’t directly see the effects of interest rates on their pensions, for those with lump-sum rollover offers, the impact can be significant. When interest rates are historically low, the actuaries that calculate the value of pension benefits normally assume it will take more money to provide lifetime pension payments for a given person. Imagine if you had to purchase bonds to provide enough monthly income for your retirement needs. Generating a $1,000 monthly income from a bond rate of 1% requires $1,200,000, but generating that same $1,000 monthly payment at a bond rate of 4% requires only $300,000. While actuarial science and pension plan investment practices are more sophisticated than that example, it’s easy to see an inverse relationship between the assumed cash value of a pension and the market rate of interest.

If your employer has offered you a lump-sum pension payout, it may be enticing to consider that option before their actuarial assumptions are updated with higher market rates. Hypothetically, a lump-sum payout would become smaller over time as market rates increase. However, taking the payout may or may not be your best choice. If a lump-sum does turn out to be a wise choice for your situation, doing so before interest rate assumptions change could mean a significant difference in your payout amount.

Below are five things to consider if you’ve been given a lump-sum pension payout offer:

1. Funding – The ability for a pension to make payments to retirees for the rest of their lives (and possibly the rest of their spouses’ lives) is often only as good as the financial health of the pension’s assets. Pension plans regularly publish their funding levels to participants, which shows how well funded the pension is relative to what’s owed to participants. A pension with a funding level of 90% generally means it has 90% of the assets needed to meet its liabilities to participants. Pension plans often invest their assets in bonds, equities, real estate, hedge strategies, private equity, and other investments to keep up with inflation and grow over time. The performance of these investments over time, plus the amount of money put into the pension from the sponsor (employer), will generally determine the financial health of the pension. Some pensions are well-funded while others are behind the curve. If you feel confident in your pension being around for the next 20-40 years or more, leaving it alone and foregoing the lump-sum offer may make sense. However, if you’re concerned about your pension’s funding long-term, a lump-sum rollover may give you control of the dollars instead. Keep in mind, the Pension Benefit Guarantee Corporation (PBGC) is a government agency that may step in to help when a pension is failing. PBGC benefits may or may not be the same amount as promised from the original pension.

 

2. Control – When it comes to investing your lump-sum dollars, you’re accepting the risk of how the investments perform. For some, that sounds terrible. For others, that sounds wonderful. If you have years of experience working with a fiduciary advisor or managing a portfolio of your own, you may welcome the opportunity to gain control of your pension dollars to manage as you see fit. Also, if you want your children to inherit these dollars one day, you may prefer the lump-sum. With traditional pensions, you and possibly a spouse may receive monthly income from the pensions for the rest of your lives. However, if you pass away prematurely before enjoying much of these pension dollars, the pension plan generally keeps what is left of your benefit. With a lump-sum rollover to an IRA, you can pick both primary and contingent beneficiaries to inherit these dollars after you pass away. This offers more control for those who wish to leave an inheritance for family members or charities. Lastly, the lump-sum rollover may give you the option of liquidity in retirement. If you need a new car or a new roof, you can’t request “extra income” from a traditional pension plan. However, if those dollars are in an IRA, they can be withdrawn how and when you need them, including a monthly amount or smaller lump-sums as needed.

 

3. Longevity – Do your family members tend to live well into their 90s? If so, assuming your pension is well-funded into the future, you may be better off with a monthly income stream than a lump-sum. As you enter your 80s and 90s, you may not wish to have much exposure to the same types of investments you had in your 50s and 60s. A monthly income stream may offer the security you need, especially if you haven’t saved well for retirement. However, if your longevity is questionable for health or family history reasons, having the cash may be the better option. If you like the idea of a lump-sum, but don’t like the idea of managing the dollars yourself, some people elect to use annuities with part or all of their lump-sum assets. Please note, some annuities pay a handsome commission to the advisor or agent selling them, while some annuities are low-cost and fee-based. How can you tell the difference? Ask and get it in writing! When it comes to low-cost annuities that don’t have a front-end load (commission), some offer guaranteed monthly income similar to the guarantees a pension may offer. Many of these annuities allow you to choose how to invest the money and also allow you to designate a beneficiary to inherit the assets after you’ve passed away. The downside is the cost. Annuities are provided by insurance companies. An annuity is essentially insurance protection wrapped around an investment account. The additional cost allows the insurance company to take on the risk of paying you income the rest of your life. Annuities are highly complex, so be sure to read the materials well if you decide to use one.

 

4. Fiduciary recommendation – If you’re working with a financial professional, it’s important to understand that person’s motivations if they make a recommendation regarding your pension. Most financial professionals are compensated one of three ways: percentage-based management fees, flat or hourly fees, or commissions. Some professionals are compensated in multiple ways, such as a fee for one service and a commission for another. Advisors that work for broker dealers, or those with a Series 7 or Series 6 license, can often  accept commissions on the products they recommend. This includes commissions from variable annuities. When an advisor is recommending that you roll your pension lump-sum into an IRA with them and they’ll receive a large commission upfront, it’s natural to wonder if any bias is at play. So, how do you know if an advisor can accept commissions? Look them up on this free regulatory website – https://adviserinfo.sec.gov/. If their profile shows they are an active “broker,” then likely, they can  accept commissions. If you prefer to have recommendations from a fee-only fiduciary (a professional that cannot accept commissions of any kind on the investments they recommend), you’ll want to look for an advisor that is not a broker. If an advisor’s profile on the SEC website says “investment advisor,” they generally accept advisory fees for their services and act as a fiduciary. Keep in mind, some advisors are both brokers and investment advisors. If you want a fee-only fiduciary, pay close attention to this website. A fiduciary must make recommendations that are in their clients’ best interests, which may or may not be to roll a pension into an IRA.

 

5. Tax planning – Pensions generally allow a participant to collect monthly benefits as early as age 55 without incurring an early withdrawal penalty. If you retire between age 55 and 59.5 and don’t have any other source of income to meet your needs, rolling a pension into an IRA would generally require you to wait until age 59.5 before being able to take distributions without a 10% penalty. Some exceptions can apply, such as disability or 72(t) distributions. Keep this age 55 rule in mind if you have limited outside assets and don’t plan to work until age 59.5. However, if you don’t need the money thanks to continued work or other assets, rolling a pension into an IRA would allow you to defer taxes until age 72. If you don’t take any distributions whatsoever until age 72, you may enjoy tax-deferred growth on these dollars. Once you reach age 72, annual required minimum distributions (RMDs) apply. This IRS rule is meant to begin paying Uncle Sam tax revenue on some of these pre-tax assets. However, this also opens an opportunity for a new tax strategy – the Qualified Charitable Distribution (QCD). If you’re charitably inclined, instead of gifting cash to your church or favorite 501(c)(3) charity, you can gift part of your RMD to charity. If done properly, neither you nor the charity would owe taxes on these dollars. If you plan on giving to charity, the QCD may be a great tax-advantaged strategy to help both you and the charity. The maximum QCD amount is $100,000 per year and you can technically use this strategy starting at age 70.5. Rolling your pension into an IRA may give you additional tax flexibility and planning opportunities.

As a bonus topic, if you decide to roll your pension into an IRA, remember that stocks and bonds aren’t the only types of investments you may have at your discretion. While not for everyone, you may also be able to use private investments that aren’t traded on a stock exchange. This means these investments may not be as liquid, but they also may not have the daily volatility inherent of the stock market. This may include private real estate, private debt, private equity, and more. A diversified portfolio may encompass an “all of the above” approach to asset allocation that includes both public investments and private investments.

If you would like advice from a fee-only fiduciary, complete the “contact us” section below. A member of our team will reach out to learn more about your goals and what may be best for your unique situation. Moneta is an independent, 100% partner-owned, fee-only RIA serving clients nationwide.

 

© 2022 Advisory services offered by Moneta Group Investment Advisors, LLC, (“MGIA”) an investment adviser registered with the Securities and Exchange Commission (“SEC”). MGIA is a wholly owned subsidiary of Moneta Group, LLC. Registration as an investment advisor does not imply a certain level of skill or training. The information contained herein is for informational purposes only, is not intended to be comprehensive or exclusive, and is based on materials deemed reliable, but the accuracy of which has not been verified. Trademarks and copyrights of materials referenced herein are the property of their respective owners. Index returns reflect total return, assuming reinvestment of dividends and interest. The returns do not reflect the effect of taxes and/or fees that an investor would incur. Examples contained herein are for illustrative purposes only based on generic assumptions. Given the dynamic nature of the subject matter and the environment in which this communication was written, the information contained herein is subject to change. This is not an offer to sell or buy securities, nor does it represent any specific recommendation. You should consult with an appropriately credentialed professional before making any financial, investment, tax or legal decision. An index is an unmanaged portfolio of specified securities and does not reflect any initial or ongoing expenses nor can it be invested in directly. Past performance is not indicative of future returns. All investments are subject to a risk of loss. Diversification and strategic asset allocation do not assure profit or protect against loss in declining markets. These materials do not take into consideration your personal circumstances, financial or otherwise.

The post 5 Things to Consider With Lump-Sum Pension ffers appeared first on Moneta Group.

source https://monetagroup.com/blog/5-things-to-consider-with-lump-sum-pension-offers/

5 Things to Consider with Lump-Sum Pension Offers

The US Federal Reserve Bank came into existence in December of 1913 after Congress passed the Federal Reserve Act. The Federal Reserve had three primary objectives at the time – maximize employment, stabilize prices, and moderate long-term interest rates. While these objectives have changed over time, one of the primary roles of today’s Fed Bank remains to regulate interest rates. This activity by the Fed Bank is often watched closely by financial institutions and foreign governments, but the average person likely paid little attention to these changes in recent decades. Since 2008, following the Great Recession, market interest rates have remained historically low. The target level for the Federal Funds Rate was 3.5% at the start of 2008, and was lowered throughout the year to a target range of 0% to 0.25%. It remained at this unusually low level for seven years, increasing slightly to 0.25%-0.5% at the end of 2015. Rates continued to gradually increase until the COVID outbreak of 2020, when the Fed decided to lower rates to near zero again. Today, we find ourselves in an economic environment not seen since 1994, where the Federal Reserve is increasing rates regularly and rapidly. With this much change in such a short period of time, financial institutions and foreign governments aren’t the only ones paying close attention.

The federal funds rate affects various market rates in the US. This includes US treasuries, certificates of deposit at your local bank, credit card rates, mortgage rates, and even premiums your insurance carrier may charge. If you have a pension through your employer, you may also know that interest rates can influence that. While many people don’t directly see the effects of interest rates on their pensions, for those with lump-sum rollover offers, the impact can be significant. When interest rates are historically low, the actuaries that calculate the value of pension benefits normally assume it will take more money to provide lifetime pension payments for a given person. Imagine if you had to purchase bonds to provide enough monthly income for your retirement needs. Generating a $1,000 monthly income from a bond rate of 1% requires $1,200,000, but generating that same $1,000 monthly payment at a bond rate of 4% requires only $300,000. While actuarial science and pension plan investment practices are more sophisticated than that example, it’s easy to see an inverse relationship between the assumed cash value of a pension and the market rate of interest.

If your employer has offered you a lump-sum pension payout, it may be enticing to consider that option before their actuarial assumptions are updated with higher market rates. Hypothetically, a lump-sum payout would become smaller over time as market rates increase. However, taking the payout may or may not be your best choice. If a lump-sum does turn out to be a wise choice for your situation, doing so before interest rate assumptions change could mean a significant difference in your payout amount.

Below are five things to consider if you’ve been given a lump-sum pension payout offer:

 

1. Funding – The ability for a pension to make payments to retirees for the rest of their lives (and possibly the rest of their spouses’ lives) is often only as good as the financial health of the pension’s assets. Pension plans regularly publish their funding levels to participants, which shows how well funded the pension is relative to what’s owed to participants. A pension with a funding level of 90% generally means it has 90% of the assets needed to meet its liabilities to participants. Pension plans often invest their assets in bonds, equities, real estate, hedge strategies, private equity, and other investments to keep up with inflation and grow over time. The performance of these investments over time, plus the amount of money put into the pension from the sponsor (employer), will generally determine the financial health of the pension. Some pensions are well-funded while others are behind the curve. If you feel confident in your pension being around for the next 20-40 years or more, leaving it alone and foregoing the lump-sum offer may make sense. However, if you’re concerned about your pension’s funding long-term, a lump-sum rollover may give you control of the dollars instead. Keep in mind, the Pension Benefit Guarantee Corporation (PBGC) is a government agency that may step in to help when a pension is failing. PBGC benefits may or may not be the same amount as promised from the original pension.

 

2. Control – When it comes to investing your lump-sum dollars, you’re accepting the risk of how the investments perform. For some, that sounds terrible. For others, that sounds wonderful. If you have years of experience working with a fiduciary advisor or managing a portfolio of your own, you may welcome the opportunity to gain control of your pension dollars to manage as you see fit. Also, if you want your children to inherit these dollars one day, you may prefer the lump-sum. With traditional pensions, you and possibly a spouse may receive monthly income from the pensions for the rest of your lives. However, if you pass away prematurely before enjoying much of these pension dollars, the pension plan generally keeps what is left of your benefit. With a lump-sum rollover to an IRA, you can pick both primary and contingent beneficiaries to inherit these dollars after you pass away. This offers more control for those who wish to leave an inheritance for family members or charities. Lastly, the lump-sum rollover may give you the option of liquidity in retirement. If you need a new car or a new roof, you can’t request “extra income” from a traditional pension plan. However, if those dollars are in an IRA, they can be withdrawn how and when you need them, including a monthly amount or smaller lump-sums as needed.

 

3. Longevity – Do your family members tend to live well into their 90s? If so, assuming your pension is well-funded into the future, you may be better off with a monthly income stream than a lump-sum. As you enter your 80s and 90s, you may not wish to have much exposure to the same types of investments you had in your 50s and 60s. A monthly income stream may offer the security you need, especially if you haven’t saved well for retirement. However, if your longevity is questionable for health or family history reasons, having the cash may be the better option. If you like the idea of a lump-sum, but don’t like the idea of managing the dollars yourself, some people elect to use annuities with part or all of their lump-sum assets. Please note, some annuities pay a handsome commission to the advisor or agent selling them, while some annuities are low-cost and fee-based. How can you tell the difference? Ask and get it in writing! When it comes to low-cost annuities that don’t have a front-end load (commission), some offer guaranteed monthly income similar to the guarantees a pension may offer. Many of these annuities allow you to choose how to invest the money and also allow you to designate a beneficiary to inherit the assets after you’ve passed away. The downside is the cost. Annuities are provided by insurance companies. An annuity is essentially insurance protection wrapped around an investment account. The additional cost allows the insurance company to take on the risk of paying you income the rest of your life. Annuities are highly complex, so be sure to read the materials well if you decide to use one.

 

4. Fiduciary recommendation – If you’re working with a financial professional, it’s important to understand that person’s motivations if they make a recommendation regarding your pension. Most financial professionals are compensated one of three ways: percentage-based management fees, flat or hourly fees, or commissions. Some professionals are compensated in multiple ways, such as a fee for one service and a commission for another. Advisors that work for broker dealers, or those with a Series 7 or Series 6 license, can often  accept commissions on the products they recommend. This includes commissions from variable annuities. When an advisor is recommending that you roll your pension lump-sum into an IRA with them and they’ll receive a large commission upfront, it’s natural to wonder if any bias is at play. So, how do you know if an advisor can accept commissions? Look them up on this free regulatory website – https://adviserinfo.sec.gov/. If their profile shows they are an active “broker,” then likely, they can  accept commissions. If you prefer to have recommendations from a fee-only fiduciary (a professional that cannot accept commissions of any kind on the investments they recommend), you’ll want to look for an advisor that is not a broker. If an advisor’s profile on the SEC website says “investment advisor,” they generally accept advisory fees for their services and act as a fiduciary. Keep in mind, some advisors are both brokers and investment advisors. If you want a fee-only fiduciary, pay close attention to this website. A fiduciary must make recommendations that are in their clients’ best interests, which may or may not be to roll a pension into an IRA.

 

5. Tax planning – Pensions generally allow a participant to collect monthly benefits as early as age 55 without incurring an early withdrawal penalty. If you retire between age 55 and 59.5 and don’t have any other source of income to meet your needs, rolling a pension into an IRA would generally require you to wait until age 59.5 before being able to take distributions without a 10% penalty. Some exceptions can apply, such as disability or 72(t) distributions. Keep this age 55 rule in mind if you have limited outside assets and don’t plan to work until age 59.5. However, if you don’t need the money thanks to continued work or other assets, rolling a pension into an IRA would allow you to defer taxes until age 72. If you don’t take any distributions whatsoever until age 72, you may enjoy tax-deferred growth on these dollars. Once you reach age 72, annual required minimum distributions (RMDs) apply. This IRS rule is meant to begin paying Uncle Sam tax revenue on some of these pre-tax assets. However, this also opens an opportunity for a new tax strategy – the Qualified Charitable Distribution (QCD). If you’re charitably inclined, instead of gifting cash to your church or favorite 501(c)(3) charity, you can gift part of your RMD to charity. If done properly, neither you nor the charity would owe taxes on these dollars. If you plan on giving to charity, the QCD may be a great tax-advantaged strategy to help both you and the charity. The maximum QCD amount is $100,000 per year and you can technically use this strategy starting at age 70.5. Rolling your pension into an IRA may give you additional tax flexibility and planning opportunities.

 

As a bonus topic, if you decide to roll your pension into an IRA, remember that stocks and bonds aren’t the only types of investments you may have at your discretion. While not for everyone, you may also be able to use private investments that aren’t traded on a stock exchange. This means these investments may not be as liquid, but they also may not have the daily volatility inherent of the stock market. This may include private real estate, private debt, private equity, and more. A diversified portfolio may encompass an “all of the above” approach to asset allocation that includes both public investments and private investments.

If you would like advice from a fee-only fiduciary, complete the “contact us” section below. A member of our team will reach out to learn more about your goals and what may be best for your unique situation. Moneta is an independent, 100% partner-owned, fee-only RIA serving clients nationwide.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Please speak with a qualified tax or legal professional before making any changes to your personal situation.

© 2022 Advisory services offered by Moneta Group Investment Advisors, LLC, (“MGIA”) an investment adviser registered with the Securities and Exchange Commission (“SEC”). MGIA is a wholly owned subsidiary of Moneta Group, LLC. Registration as an investment advisor does not imply a certain level of skill or training. The information contained herein is for informational purposes only, is not intended to be comprehensive or exclusive, and is based on materials deemed reliable, but the accuracy of which has not been verified. Trademarks and copyrights of materials referenced herein are the property of their respective owners. Index returns reflect total return, assuming reinvestment of dividends and interest. The returns do not reflect the effect of taxes and/or fees that an investor would incur. Examples contained herein are for illustrative purposes only based on generic assumptions. Given the dynamic nature of the subject matter and the environment in which this communication was written, the information contained herein is subject to change. This is not an offer to sell or buy securities, nor does it represent any specific recommendation. You should consult with an appropriately credentialed professional before making any financial, investment, tax or legal decision. An index is an unmanaged portfolio of specified securities and does not reflect any initial or ongoing expenses nor can it be invested in directly. Past performance is not indicative of future returns. All investments are subject to a risk of loss. Diversification and strategic asset allocation do not assure profit or protect against loss in declining markets. These materials do not take into consideration your personal circumstances, financial or otherwise

The post 5 Things to Consider with Lump-Sum Pension Offers appeared first on Moneta Group.

source https://monetagroup.com/blog/5-things-to-consider-with-lump-sum-pension-offers/

Barron’s again ranks Moneta among nation’s Top RIAs for combination of quality and scale

Moneta’s unwavering commitment to operate with a client-first approach continues to elevate the firm nationally as 2022 marks the sixth year in a row (2017-2022) that Barron’s ranked Moneta in the Top 11 of its Top 100 RIA Firms.

Consistently ranking among the top RIAs year after year is no small feat at a time when the RIA industry’s growth rate is so large.

As the article Barron’s published in tandem with these rankings notes:

“Independent advisors, often working within registered investment advisor, or RIA, firms, are multiplying at a breakneck pace. From 2012 to 2021, the number of such firms in the U.S. increased 41%, to nearly 15,000.”

Even as the competition multiplies, Moneta remains ranked among the best.

© 2022 Moneta Group Investment Advisors, LLC. All rights reserved. Moneta Group Investment Advisors, LLC is an SEC registered investment advisor and wholly owned subsidiary of Moneta Group, LLC.  Registration as an investment advisor does not imply a certain level of skill or training. Moneta is a service mark owned by Moneta Group, LLC.

The post Barron’s again ranks Moneta among nation’s Top RIAs for combination of quality and scale appeared first on Moneta Group.

source https://monetagroup.com/blog/barrons-again-ranks-moneta-among-nations-top-rias-for-combination-of-quality-and-scale/

All Eyes on Earnings as Predictions Grow Grim About Shocks and Aftershocks

Aoifinn Devitt – Chief Investment Officer

As we await the start of third quarters earning season, it is clear that there is likely to be considerable dispersion among sectors.  Energy stocks are expected to dominate in terms of earnings growth, while other sectors, such as communications, tech, financials, and utilities are expected to see declines.  Some companies are beginning to feel the effects of a strong dollar, which is impacting the price competitiveness of exports, while the relentless strength of the currency is also eroding the economic health of trading partners.

As markets continued to digest the recent US jobs report, which showed a rise in non-farm payrolls of 263,000 in September, the initial positive start to the month in equity markets was eroded.  As we write now, markets remain on edge, and are inclined to react to the downside as rhetoric darkens.  Examples of this include the recent suggestion by Jamie Dimon, CEO of JP Morgan, that the US was facing a “very, very serious” mix of headwinds, including the worsening geopolitical situation in Ukraine.

The Federal Reserve has telegraphed that it is likely to be highly data dependent as it decides on the future course of policy, and clearly two of the main data points it is focused on are inflation and employment levels.[1] It seems to be assured that some of its tightening to date (rate rises of 300 percent over 7 months) is seeing an effect on prices  – in particular, the way that mortgage rates essentially doubling year on year have resulted in a sharp tick down in house price appreciation, so that average prices are likely to finish the year flat.

Other sectors, though, are experiencing more of a “lag in transmission” of tighter conditions and have not yet seen price reductions. It is notable that one of the areas that the Fed foresees as key to price reductions is margin compression in sectors such as retail – where margin expansion has latterly led to a windfall of sorts (e.g. in the used car retail segment). The margin expansion that was enabled when supply chain shortages met buoyant demand, far exceed the contribution of wage rises to the end price.  Pressure on margins will likely translate into pressure on earnings for equities, and this is no doubt behind the weakness in current trading.

As we look around the globe, we can see mini financial experiments playing out on smaller stages – all of which are interesting petri dishes for policies not yet tried in the US, but potentially a harbinger of things to come.  A prime example of this is the UK, where the governor of the Central Bank threw down the gauntlet to pension funds battered by falling government bond prices – telling them that they had “three days left” to reduce their exposures, at which point the bank backstop would be removed.  Markets predictably reacted poorly.  For now, it is critical to watch and learn from these developments, to avoid both further mistakes and deeper woes and also to take the temperature of market participants.

[1] See: https://www.federalreserve.gov/newsevents/speech/brainard20221010a.htm

Source: Morningstar as of 10/13/2022

 

Disclosures:

© 2022 Advisory services offered by Moneta Group Investment Advisors, LLC, (“MGIA”) an investment adviser registered with the Securities and Exchange Commission (“SEC”). MGIA is a wholly owned subsidiary of Moneta Group, LLC. Registration as an investment advisor does not imply a certain level of skill or training. The information contained herein is for informational purposes only, is not intended to be comprehensive or exclusive, and is based on materials deemed reliable, but the accuracy of which has not been verified. Trademarks and copyrights of materials referenced herein are the property of their respective owners. Index returns reflect total return, assuming reinvestment of dividends and interest. The returns do not reflect the effect of taxes and/or fees that an investor would incur. Examples contained herein are for illustrative purposes only based on generic assumptions. Given the dynamic nature of the subject matter and the environment in which this communication was written, the information contained herein is subject to change. This is not an offer to sell or buy securities, nor does it represent any specific recommendation. You should consult with an appropriately credentialed professional before making any financial, investment, tax or legal decision. An index is an unmanaged portfolio of specified securities and does not reflect any initial or ongoing expenses nor can it be invested in directly. Past performance is not indicative of future returns. All investments are subject to a risk of loss. Diversification and strategic asset allocation do not assure profit or protect against loss in declining markets. These materials do not take into consideration your personal circumstances, financial or otherwise.

Definitions:

The Russell 1000® Index is an index of 1000 issues representative of the U.S. large capitalization securities market.
The Russell 1000® Growth Index measures the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values.
The Russell 1000® Value Index measures the performance of those Russell 1000 Index securities with lower price-to-book ratios and lower forecasted growth values, representative of U.S. Securities exhibiting value characteristics.
The Russell Midcap® Index measures the performance of the mid-cap segment of the US equity universe. The Russell Midcap Index is a subset of the Russell 1000® Index. It includes approximately 800 of the smallest securities based on a combination of their market cap and current index membership.
The Russell Midcap® Value Index measures the performance of the midcap value segment of the US equity universe. It includes those Russell Midcap Index companies with relatively lower price-to-book ratios, lower I/B/E/S forecast medium term (2 year) growth and lower sales per share historical growth (5 years).
The Russell Midcap® Growth Index measures the performance of the midcap growth segment of the US equity universe. It includes those Russell Midcap Index companies with relatively higher price-to-book ratios, higher I/B/E/S forecast medium term (2 year) growth and higher sales per share historical growth (5 years).
The Russell 2000® Index is an index of 2000 issues representative of the U.S. small capitalization securities market.
The Russell 2000® Growth Index measures the performance of the small cap growth segment of the US equity universe. It includes those Russell 2000 companies with relatively higher price-to-book ratios, higher I/B/E/S forecast medium term (2 year) growth and higher sales per share historical growth (5 years).
The Russell 2000® Value Index measures the performance of the small cap value segment of the US equity universe. It includes those Russell 2000 companies with relatively lower price-to-book ratios, lower I/B/E/S forecast medium term (2 year) growth and lower sales per share historical growth (5 years).
The MSCI EAFE Index is a free float-adjusted market capitalization index designed to measure the equity market performance of developed markets, excluding the U.S. and Canada.
The MSCI Emerging Markets Index is a float-adjusted market capitalization index that consists of indices in 21 emerging economies.
The Bloomberg U.S. Aggregate Bond Index is an index, with income reinvested, generally representative of intermediate-term government bonds, investment grade corporate debt securities and mortgage-backed securities.
The Bloomberg US Corporate High Yield Bond Index measures the USD-denominated, high yield, fixed-rate corporate bond market. Securities are classified as high yield if the middle rating of Moody’s, Fitch and S&P is Ba1/BB+/BB+ or below. Bonds from issuers with an emerging markets country of risk, based on the indices’ EM country definition, are excluded.
The Dow Jones U.S. Select REIT Index tracks the performance of publicly traded REITs and REIT-like securities and is designed to serve as a proxy for direct real estate investment, in part by excluding companies whose performance may be driven by factors other than the value of real estate. The index is a subset of the Dow Jones U.S. Select Real Estate Securities Index (RESI), which represents equity real estate investment trusts (REITs) and real estate operating companies (REOCs) traded in the U.S.
The Alerian MLP Index is the leading gauge of energy infrastructure Master Limited Partnerships (MLPs). The capped, float-adjusted, capitalization-weighted index, whose constituents earn the majority of their cash flow from midstream activities involving energy commodities, is disseminated real-time on a price-return basis (AMZ) and on a total-return basis (AMZX).
The S&P Global Infrastructure Index is designed to track 75 companies from around the world chosen to represent the listed infrastructure industry while maintaining liquidity and tradability.

 

 

 

 

The post All Eyes on Earnings as Predictions Grow Grim About Shocks and Aftershocks appeared first on Moneta Group.

source https://monetagroup.com/blog/all-eyes-on-earnings-as-predictions-grow-grim-about-shocks-and-aftershocks/

Moneta Opens Chicago Location, Fueling Long-Term Growth and Enhanced Client Service in the Region

St. Louis-based national firm launches its fourth expansion location in four years

In a move to strengthen its client-first infrastructure, Moneta, a 100% partner-owned and fee-only firm offering advisory services through its registered investment advisor (RIA) Moneta Group Investment Advisors, LLC, has launched its newest office location in Chicago.

Entering a fourth expansion market in four years represents a continuation of growth strategy for the firm with $32.8 billion in assets under management (AUM) after seeing a 39% growth in assets since launching a new Denver office in 2019 – Moneta’s first expansion location outside of its St. Louis headquarters. Moneta proceeded to open offices in the Kansas City and Boston metro areas in 2020 and 2021 respectively before adding Chicago now in 2022.

Chicago was a natural place for the RIA’s evolution. With a substantial base of clients and employees already in the Chicago area, establishing an office in its fifth major city will enhance Moneta’s client service and drive long-term growth in the market for both clients and talent.

“Expanding our footprint to the Chicago market shows our existing client-base we are invested in the community and demonstrates our credibility in the city,” says Moneta Chief Operating Officer Keith Bowles. “The move furthers our mission to enhance our processes, people and technology to ensure a top-notch client experience.”

Moneta’s success in its previous expansion locations helped pave the way for the firm to continue growing into Chicago. The firm’s Denver office is at capacity and the Kansas City location has already doubled in size.

“Our clients deserve a world-class experience and growth empowers us to provide a level of service they can’t find anywhere else,” said CEO and Chairman of the Board, Eric Kittner. “It’s a simple story to tell: our growth allows us to invest in the services we provide and creates opportunity for our industry leading talent. Chicago strengthens our national reach and will allow us to grow both organically and inorganically in a market we already have a strong client presence in.”

ABOUT MONETA

Moneta Group Investment Advisors, LLC is a registered investment advisor with approximately $32.8 billion in assets under management, headquartered in the Midwest. InvestmentNews ranked Moneta among the nation’s Top 10 largest fee-only RIAs for a fifth-straight year in 2022. Barron’s ranked Moneta among the nation’s Top 10 Independent RIAs in 2017, 2018, 2019, 2020 and 2021 for its combination of quality and scale.

The firm consistently earns praise for the way it invests in and takes care of employees. In 2021, InvestmentNews ranked Moneta among the nation’s “Best Places to Work for Financial Advisers” for the third year, the St. Louis Post-Dispatch ranked Moneta among its “Top Workplaces” for the eighth-straight year and the St. Louis Business Journal named Moneta as one of its “Best Places to Work” for a seventh-straight year.

© 2022 Moneta Group Investment Advisors, LLC. All rights reserved. Moneta Group Investment  Advisors, LLC is an SEC registered investment advisor and wholly owned subsidiary of Moneta Group, LLC. Registration as an investment advisor does not imply a certain level of skill or training. Moneta is a service mark owned by Moneta Group, LLC.  These articles do not individually or collectively constitute an offer to sell or buy securities, nor does any statement contained herein represent any specific recommendation. Rankings and/or recognition by unaffiliated rating services and/or publications are not indicative of performance and should not be construed as a guarantee of future investment success, nor should they be construed as a current or past endorsement of Company by any of its clients.

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source https://monetagroup.com/blog/moneta-opens-chicago-location-fueling-long-term-growth-and-enhanced-client-service-in-the-region/

Tackling Life in Stages: Financial Hygiene as Your Career Takes Off

Kevin Ward – Advisor

Life is full of unknowns—simultaneously a source of tremendous potential joy and anxiety. But with thoughtful planning, you can help mitigate some of the unknowns—or at least better position yourself to handle surprises when they arise. In this series, we explore some planning you can undertake, depending on your phase of life. People admittedly do things in their own order—everyone’s on their own journey—so rather than group considerations into age brackets, we’ve grouped it relative to where you are with respect to your (or your significant other’s) career. If you happen to tackle life in a different order, first, good for you. And second, these pieces should nevertheless offer some ideas for you to explore more either on your own or alongside a seasoned financial advisor, so you can still position yourself well to handle whatever the future throws in your direction. Among the considerations we consistently explore are those related to benefits management, insurance, your balance sheet (managing liabilities, or debt, and assets), and saving for major life events or purchases.

As your career progresses, your responsibilities—i.e., your expenses—in various areas will likely increase. Many people in this stage of life—though by no means all—choose to start a life and perhaps a family with a partner. Or they at least start planning for a family. Naturally, increasing the number of people in your household increases your costs in various ways—grocery and other bills increase, but so may your housing payment, particularly if you choose to move into a bigger home. Or maybe there are other big purchases you’d like to make during this phase of life. As with all major purchases, the key is planning so that you can comfortably make whatever payments are involved when you pull the trigger.

Starting a family also introduces an opportunity to plan your finances thoughtfully so that as your family grows and matures, you needn’t find yourself backed into financial corners. Accordingly, this is a good time to review your benefits selections during your company’s annual enrollment. Do you need to change your health insurance? Beneficiaries on existing accounts? If you haven’t previously purchased life insurance, should you consider it now?

Other benefits-related areas to explore are childcare-related accounts, such as flexible spending accounts and education accounts. For example, starting a 529 or other education-related accounts, depending on the state in which you live and the options available, will help you plan and save for potentially hefty education-related expenses. Even if you don’t know whether your children will choose to attend college, the funds saved in such accounts may potentially be used for other opportunities as your child approaches adulthood.

Given your shifting expenses and savings focus, you may find you have less disposable income to direct toward your retirement account for a while. This isn’t necessarily a problem if you plan and know where you stand. Instead, once you’ve taken care of funding whatever education accounts you’ve chosen to open, you can return your focus to retirement and likely keep everything on track.

This phase of your career and life is also a good time to review your beneficiary, insurance, and estate-planning status. Look at any powers of attorney you’ve established to ensure they still name the right people you’d like to have handle your affairs in the event of any unexpected events. Perhaps you have a life insurance policy, but it’s no longer sufficient given the number of dependents you now have—maybe it’s worth investigating an additional policy or increasing your coverage. However, it’s worth approaching life insurance thoughtfully and discussing it with your financial advisor to ensure you’re thinking about it in the relevant context. It is possible to take out more insurance than you need—some consider it an investment, a potential future income, or debt payment replacement, depending on which type of policy they purchase. An experienced financial advisor can help you evaluate these decisions and assess whether insurance is indeed the best vehicle for achieving the goals you have in mind or whether there might be better approaches that position you better in the long run.

When it comes to estate planning, some tend to think that because they don’t necessarily have the level of assets that would qualify them as “wealthy,” there’s not much to plan. Falling prey to this fallacy could leave your family in a less-than-optimal financial position should anything untimely happen. People who pass away without a will leave their estate “intestate,” and likely, most of their assets will have to go through probate before passing to heirs. Probate can not only be timely and costly but also meaningfully eat into the assets available to pass to survivors. So, no matter how small you may think your estate is, it’s advisable to establish a will so your family will be well-positioned no matter what the future holds. If you’re unsure where to start, your financial advisor is likely a good resource—not only to ask some initial questions, but also as a potential source of referrals to a qualified estate-planning attorney.

Though it can be financially stressful, this phase of life can also entail some of life’s greatest joys—marriage, starting a family, and embarking on new adventures together. Provided you do your homework to position your family for financial success, you should also be amply able to bask in the joy these years often bring.

 

© 2022 Moneta Group Investment Advisors, LLC. All rights reserved. The information contained herein is for informational purposes only, is not intended to be comprehensive or exclusive, and is based on materials deemed reliable, but the accuracy of which has not been verified. Examples contained herein are for illustrative purposes only based on generic assumptions. Given the dynamic nature of the subject matter and the environment in which this communication was written, the information and opinions contained herein are subject to change. This is not an offer to sell or buy securities, nor does it represent any specific recommendation. You should consult with an appropriately credentialed professional before making any financial, investment, tax or legal decision. Past performance is not indicative of future returns. All investments are subject to a risk of loss. Diversification and strategic asset allocation do not assure profit or protect against loss in declining markets. These materials do not take into consideration your personal circumstances, financial or otherwise.

 

The post Tackling Life in Stages: Financial Hygiene as Your Career Takes Off appeared first on Moneta Group.

source https://monetagroup.com/blog/tackling-life-in-stages-financial-hygiene-as-your-career-takes-off/

Mental Health First Aid at Moneta: Taking care of each other so we can take care of you

Mental health became a top-of-mind issue during the Covid pandemic, and it stands as one of the four pillars of Moneta’s Wellness Commitment Program: Well Moneta. 

As an increasing number of people struggle with mental health, Moneta provides Mental Health First Aid to take care of its employees so they can take the best care of their clients. Mental Health First Aid is a certificate program from the National Council for Mental Wellbeing to promote conversation and reduce stigma around mental wellbeing. 

“Knowing that more than 20 million Americans experience a mental health challenge in any given year tells us that it is a high probability that we will encounter someone in our lives that will have a mental health challenge,” said Anthony Palazzolo, Moneta’s Director of Strategic Planning & Performance Management. “For members of Moneta to have the tools to be aware of early signs and symptoms will be invaluable to the health of our clients and employees of Moneta. In addition, the people that have completed the mental health first aid course walk away with the skills learned to be the first line of support to the person in need using the action plan provided.” 

The training consisted of both online coursework and eight hours of in-person interactive training with participants gaining skills in identifying, understanding, and responding to signs of mental health and substance use disorders. Those who earn the certification can help remove barriers to care, such as cost, stigma, logistics, and lack of awareness.   

“It’s a testament to the commitment that Moneta and its leaders have to our talent,” said Jessica Rallo, Moneta’s Human Resource Manager. “We are committed to arming ourselves with the knowledge needed to support our most important asset.”  

© 2022 Moneta Group Investment Advisors, LLC. All rights reserved. These materials were prepared for informational purposes only based on materials deemed reliable, but the accuracy of which has not been verified; trademarks and copyrights of materials linked herein are the property of their respective owners.  This is not an offer to sell or buy securities, nor does it represent any specific recommendation.  You should consult with an appropriately credentialed professional before making any financial, investment, tax or legal decision. Past performance is not indicative of future returns. These materials do not take into consideration your personal circumstances, financial or otherwise. 

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source https://monetagroup.com/blog/mental-health-first-aid-at-moneta-taking-care-of-each-other-so-we-can-take-care-of-you/