Weekly Commentary — March 18, 2019
The Week on Wall Street
The big story last week was the sudden grounding of Boeing 737 Max 8 and 9 passenger jets in dozens of countries. The financial effects of this ban could potentially impact the airline industry and segments of the economy for months.[i]
Bullish sentiment was also evident overseas. Looking at the MSCI EAFE index, international stocks advanced 1.93%.[v]
Trade Meeting Delayed
Wall Street expected President Trump and Chinese President Xi to discuss trade issues this month. Thursday, Bloomberg reported that their talk had been postponed, with no firm date ahead.[vi]
The latest Consumer Price Index showed just a 1.5% rise in overall consumer costs in the year ending in February.
This number does not suggest an overheating economy. During a 60 Minutes interview last week, Federal Reserve Chairman Jerome Powell said the central bank did “not feel any hurry” to make a rate move.[vii]
If you turned 70½ last year, April 1 is your final deadline to receive your initial Required Minimum Distribution (RMD) from a traditional IRA, SEP-IRA, SIMPLE IRA, or employer-sponsored retirement plan. If you take your initial RMD from these retirement accounts this year, you must receive your second RMD from them by December 31, 2019.[viii]
THE WEEK AHEAD: KEY ECONOMIC DATA
Wednesday: The Federal Reserve wraps up its two-day policy meeting.
Friday: February existing home sales.
Source: Econoday / MarketWatch Calendar, March 15, 2019
THE WEEK AHEAD: COMPANIES REPORTING EARNINGS
Tuesday: FedEx (FDX), Michaels Companies (MIK)
Wednesday: General Mills (GIS), Micron Technology (MU)
Thursday: ConAgra Brands (CAG), Darden Restaurants (DRI), Nike (NKE)
Source: Morningstar.com, March 15, 2019
“Never discourage anyone…who continually makes progress, no matter how slow.”
Pensions and Annuities: What’s Taxed?
Depending on the types of retirement benefits you receive, they could be taxable. Here are some basics:
Fully Taxable Payments
The pension or annuity payments that you receive are fully taxable if you don’t have an investment in the contract because:
- You didn’t contribute anything to your pension or annuity
- Your employer didn’t withhold contributions from your salary
- You have received all your contributions tax-free in prior years
Partially Taxable Payments
If you made after-tax contributions to your pension or annuity, your pension payments are partially taxable. You don’t pay taxes on the portion of the payment that’s a return of the after-tax amount you paid.
Additional 10% Tax on Early Distributions
Receiving pension or annuity payments before age 59½ may subject you to an additional 10% tax on early distributions. The additional tax doesn’t apply to the portion of a distribution that is tax-free or distributions made:
- As a part of a series of substantially equal periodic payments beginning after your separation from service
- Because you’re totally and permanently disabled
- On or after the death of the plan participant or contract holder
- After your separation from service and in or after the year you reached age 55
* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS.gov[ix]
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