What are some areas we should review to start the year?

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Question of the week:  What are some areas we should review to start the year?

Answer: If the question of the week looks familiar, it is as it is we ask near the beginning of every year; because it is that important. Over the next few weeks, or months depending on your particular situation, you will be gathering statements, forms, and information to prepare your tax returns. While you have all this information in the same place it is a good time to also review various areas of your economic life to see what may need updating, or changing.

Here are some of the areas I suggest you review:

  • Retirement Did you alter your retirement withholdings in 2023?  Do you need to increase or decrease your deductions for your 401(k)?  The maximum contribution for 2024 is $23,000, up $500 from 2023. If you are over 50 the “catch up” contribution limits $7500 for a total contribution (pre-tax) of $30,500.  The combined total for employee and employer contributions is $69,000.

Are you self-employed or work for an employer who does not have a retirement plan so you contribute to some type of IRA? Review your 2023 income and contributions and determine based on estimated income in 2024 whether you need to adjust your monthly or quarterly contributions to your IRA. If you do not make regular contributions to your IRA, I strongly recommend it so you can take advantage of “dollar cost averaging.”

  • Insurance Is your hazard insurance policy current and accurately reflecting the replacement value of your home?  Is your life insurance coverage adequate? Are you home, auto, life insurances with the same company allowing you to take advantage of bundled discounts?

As you are aware, many insurance companies have changed their homeowners’ insurance coverages, not issuing new policies, or dropping existing clients. Check in with your agent regarding your coverage and any expected changes that may occur from their side.

If you have significant equity in your property, consult with your property and casualty agent to see if you should consider earthquake insurance. Because the deductibles are extremely high for earthquake insurance, it is not recommended to get earthquake insurance if you do not have enough equity to protect when calculating premiums and deductible.

  • Estate Planning Do you have an estate plan?  Is it current and reflective of your current assets and wishes?  Do you own property but do not think you need any family planning because you are single?  Everyone with assets should have an estate plan, especially if they own real estate in California (or any other state with inheritance taxes). If you have an estate plan and family trust when was the last time you had it reviewed? Have your children become adults since the trust was last reviewed and amended? What about your wishes for you when you pass on to the next dimension, are they the same as they were when you initiated your trust?
  • Debt Have you increased your debt in the past twelve months?  Do you have a plan to pay it down and off?  Can you restructure your debt to lower the overall interest rates being charged or the monthly cash flow required to manage the debt and keep payments current? Was your 2023 resolution to pay down/off debt but were unable to do so? Call me and we can discuss potential plans to help you achieve this goal in 2024.
  • Mortgage Do you need a review of your current mortgage and options?  Call me!

These are not fun or sexy issues for most people to be tackling, but like changing the batteries in your smoke detectors you need to regularly review and update these critical areas of your home economics.  If you have any questions or looking for qualified professionals to assist you, please do not hesitate to contact me.

To schedule an initial meeting by phone or Zoom, click here for my calendar, please feel free to forward to a friend or family member!

Have a question? Ask me!

 The impact of the Signature Bank failure last year lingers. New York Community Bank acquired $40 billion in assets from Signature when it collapsed last March. Over the past week shares of NYCB shares dropped 60% over concerns of its liquidity. Wednesday markets reacted to concerns of the bank perhaps following Signature Banks course from concerns to failure, and interest rates spiked.

After spike mid-week, investors calmed down and bond prices stabilized, awaiting next week’s Consumer Price Index data. With members of the Federal Reserve making comments since their last meeting that there has been progress on inflation, labor markets strong, might (might) lower rates in 2024, investors read in the comments that the Fed may take action not to lower rates as expected, but increase its benchmark rate if CPI comes in too high.

Rates for Friday February 9, 2024: Markets are very wary and in a point of transition—either better with low inflation data, or worse if the trend of inflation going lower reversing to higher prices for consumers. Rates up from last Friday as markets await Tuesday’s inflation data.

FIXED RATE MORTGAGES AT COST OF 1.25 POINTS LOCKED FOR 45 DAYS FOR PURCHASE TRANSACTIONS:

30-year conforming                             6.50%          Up 0.25%

30-year high-balance conforming        7.25%          Up 0.375%

Please note that these are base rates and adjustments may be added for condominiums, refinances, credit scores, loan to value, no impound account and period rate is locked. Rates are based on 20% down with 740 FICO score for purchase mortgages.

Super Sunday is upon us, with different story lines than many Super Bowls past. It is not unusual to have a lot of chatter and stories about halftime concert performers before the game, and in some cases after (see Super Bowl XXXVIII [38 for Roman numeral challenged] with Janet Jackson’s “wardrobe malfunction” with Justin Timberlake twenty years ago). This year we have had chatter all year about a musical performer, but not about her concert performances, but her attendance at Kansas City Chief games to root on her boyfriend Travis Kelce.

Taylor Swift’s entry into NFL news, updates, game coverage, has turn many of her fans into Chief fans, and has caused many NFL fans to scorn Ms. Swift, Mr. Kelce and the Chiefs.

Me, I think anyone who brings more fans to a sport should be celebrated. Thousands of young women who would see Sundays as a time when they would not see much of dad and their brothers, are now watching games and guessing the Chiefs’ defense is going to do a zero-blitz on the other team’s 3-and-19, or admiring how Mahomes ran a perfect RPO rollout to find Kelce in the seam of the cove-1 zone.

With my Eagles out of the contest I have no real dog in the fight. That said, with the rivalry that has arisen between the Forty-Niners and Eagles, I find it easy to root for the Chiefs in what should be a great game.

I feel the Chiefs defense is better than the Niners defense, which will be needed as the Niners have more weapons on offense. I see a final of 27-20 Kansas City, which means you should probably place your wagers on San Francisco.

Have fun at your watch parties, enjoy the game, and the commercials, and good luck in you squares pools.  

Have a great week,

Dennis

Past Weekly Rate & Market Updates can be found on my blog page at my website www.DennisCSmith.com/my-blog