Tip of the Week: 100 Points on the Dow Ain’t What They Used To Be


Hey everyone! I’m Derek Merkler, the military financial advisor and in this Tip of the Week, let’s time travel back to August of 2019 when U.S. stock markets had multiple weeks of losses since the highs of the month before.  During this time, we saw financial headlines along the lines of “Why the world turned bearish today” and “The Dow dropped 600 points!”  We saw a lot of fear-mongering with intentionally misleading headlines.Read More »

Monthly Economic Update: September 2019


Hello, folks, this is Derek Merkler, the Military Financial Advisor with my economic update for September 2019.

In August, all eyes were on the U.S.-China trade dispute. The White House announced new tariffs on Chinese goods. Some are effective now; some will be effective in December. China retaliated, in two ways. First, it manipulated its currency by reducing its value compared to the U.S. dollar. Currency devaluation makes Chinese goods less expensive for U.S. buyers and it may help offset the impact of tariffs.[1]Second, it scheduled new tariffs on American goods.[2]Trade talks between the U.S. and China may resume this month though, of course, time will tell.[3]Read More »

Tip of the Week: Why I Prefer Roth Accounts


Hey, everyone! In this week’s tip of the week, I want to explain why I lean toward using Roth accounts, such as Roth IRAs and Roth 401Ks, as opposed to your traditional IRAs and 401ks as an investment and retirement tax shelter.  First, what’s the difference.  The primary difference is the tax treatment of money going in and coming out.  In your traditional IRAs and 401ks, you get a tax deduction when you put money into those accounts.  When you take the money out in retirement, it’s taxed as ordinary income.  In other words, if you take $10,000 out in retirement and your tax rate is 20%, well you really only receive $8,000.

Roth accounts are the opposite.  Nothing changes with your taxes when you put money in, but you won’t owe taxes when you withdraw money from a Roth account in retirement.  So, in theory, the math is equivalent regardless of the choice: Roth or Traditional.  In theory, if you expect your marginal tax rate to fall in retirement, a traditional IRA or 401k will result in maximum wealth.  If you expect your marginal tax rate to increase in retirement, the Roth accounts will maximize your wealth.

And some people will use a fear-based technique to ingrain the expectation that tax rates must rise in the future to pay our growing national debt.   That perspective has merit, but I don’t put too much weight on it specifically.

Alright, with the background information out of the way, here are the four main reasons that I generally recommend Roth accounts over traditional retirement accounts.



You can access your Roth IRA contributions at any time without taxes or penalties.

While I don’t recommend that your IRA be used as an emergency fund, the rules of a Roth IRA allow you to withdraw your contributions without taxes or penalties, even before age 59.5.  Again, that’s contributions only, not earnings or investment returns.  For example, let’s say that you have a Roth IRA and have contributed $20,000 over the last four years and the account value is now $30,000 due to growth in your investments.  You could withdraw up to $20,000 from that account without taxes or penalties.

In contrast, a regular IRA withdrawal before ae 59 and a half will result in those funds being taxed as regular income with a 10% penalty added on top.

Even withdrawing from regular brokerage account can cause a taxable event if investments have capital gains.


Retirement withdrawals are not taxed.

Of course, tax-free retirement withdrawals are the primary differentiator of Roth 401ks and Roth IRAs versus the traditional counterparts.  There are multiple benefits to this arrangement.  First, it’s a hedge against future tax increases.  My typical clients are Veterans in their 20s, 30s, and 40s and their potential planning time horizon could be north of 50 years.  We really have no idea what is going to happen to tax rates in the intervening period.  Roth accounts reduce the impact of those changes.

The other important positive impact of tax-free retirement withdrawals is that they don’t trigger higher taxes on social security benefits.  Again, I have no idea how those rules will change in the future but, in the current arrangement, traditional IRA and 401k withdrawals can cause significant tax increases on social security benefits.


Access to Roth accounts is limited.

Contributions to Roth IRAs are not allowed for married couples whose Adjusted Gross Income is greater than $203,000 per year and for unmarried individuals with an AGI north of $137,000.  Those amounts are for 2019, by the way.  For many people, those income limits won’t be an issue.  But they might be for others, especially as they progress in their careers. The point here is that you may not always have the ability to contribute to a Roth IRA.

The other issue here is that many corporate retirement plans don’t offer a Roth option like a Roth 401k or Roth 403b.  Given that people will likely switch employers many times throughout their lives, there is a great chance that the next employer does not have a Roth option in its retirement plan.


Flexibility has value.

Finally, and the most often overlooked, is that Roth accounts, especially Roth IRAs, offer flexibility.  And flexibility has value.  We can access our contributions in a Roth IRA without taxes and penalties, so they aren’t locked up like in a traditional IRA.  And we don’t have to worry about the tax impacts of retirement withdrawals because there are none!

With traditional 401ks and IRAs where we pay taxes on withdrawals, we are left hoping that tax rates don’t go up, among other things.

It’s difficult to place a specific dollar value upon the flexibility offered by Roth accounts, but it’s there.  It would be nice if life followed a perfect script, but it rarely does.  For those times that life goes off-script, Roth accounts offer added flexibility where traditional accounts do not.


Bonus: One last thought. I want to reemphasize that financial planning is not really about squeezing out that last dollar or maximizing wealth absolutely.  Instead, it’s about helping clients live their best lives.  Many specific variables might result in tax-deductible IRA or 401k contributions being a better option than Roth contributions, especially in a year with higher than normal income.

But if you’re debating Roth vs traditional accounts and trying to precisely calculate which one is better, you may be focusing on the wrong things.

Thanks for watching! Please comment and let me know what you think! Until next time!



Thanks for watching!

Please visit my website at:


Remember, the topics discussed in this video are for informational purposes only and that past results do not guarantee future performance. If you would like to discuss your financial situation, please email me at Derek.Merkler@Parsonex.com.

Advisory services offered through Parsonex Advisory Services, Inc., 8310 S.Valley Hwy, Suite 110, Englewood, CO 80112. 303-662-8700.

Monthly Economic Update Video: August 2019

Hello! I’m back with my economic update for August 2019.

The market advanced in July on encouraging earnings news and on anticipation that the Federal Reserve would cut interest rates. That anticipation grew after Fed Chairman Jerome Powell’s mid-month testimony on Capitol Hill. The S&P 500 gained 1.3 percent in July and passed 3,000 for the first time.[i],[ii]The Dow Jones Industrial Average rose 1 percent; the Nasdaq Composite increased by 2.1 percent.[iii]

The Fed made a quarter-point cut on July 31st. Chairman Powell did not suggest that additional cuts were coming. Addressing the media, he called the move a “mid-cycle adjustment to policy.”[iv]

Some analysts think the Fed cut is a precaution. Its latest policy statement cited “global developments” and “muted inflation” as factors, and those are concerns.[v]Yearly inflation is still under the Fed’s 2-percent target.[vi]At last look, China’s economy was growing at its slowest rate in 27 years.[vii]

Trade talks also resumed between the U.S. and China. On July 30, trade delegates met, face to face, in Beijing for the first time in months. The market certainly wants a quick resolution to the trade dispute, but the reality may be different. In late July, Treasury Secretary Steven Mnuchin commented that it could take “a few more meetings” to see any progress.[viii]

This month, the Fed and U.S.-China trade relations will likely remain “top of mind” on Wall Street. Note that the Fed’s annual Jackson Hole symposium starts August 22. This event attracts central bank officials from around the world, and the Street pays close attention to what they say. There will also be plenty of earnings calls as the Q2 earnings season rolls on.[ix]

As I record this video, the global drop in stock market values on August 5thhas already happened.  There is certainly a lot of doom and gloom and financial media reporters running around with their hair on fire.  I have no idea what is going to happen over the rest of August as recent events develop and evolve.  So… once again, stick to your plan.

Well, that’s it for this month’s economic update.  See you next month!



Thanks for watching!

Please visit my website at:



Remember, the topics discussed in this video are for informational purposes only and that past results do not guarantee future performance.  If you would like to discuss your financial situation, please email me at Derek.Merkler@Parsonex.com.


Advisory services offered through Parsonex Advisory Services, Inc., 8310 S.Valley Hwy, Suite 110, Englewood, CO 80112. 303-662-8700.











Stocks Descend from Recent Peaks

Weekly Commentary — July 22nd, 2019

The Week on Wall Street

Stock benchmarks retreated during the first week of the second-quarter earnings season. As some big names shared quarterly results, investors seemed more interested in what might happen at the Federal Reserve’s upcoming policy meeting.

For the week, the S&P 500 declined 1.23%. The Dow Jones Industrial Average lost 0.65%, and the Nasdaq Composite, 1.18%. International stocks, measured by the week-over-week performance of the MSCI EAFE index, were down 0.79%.[1],[2]      Read More »