2024 Financial Outlook
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2024 Financial Outlook
As we embark on the new year, hopefully, your financial journey will take center stage. Here's a quick overview of what awaits you in 2024:
Economic Outlook
Domestically, we're not anticipating a full-blown economic recession, but certain sectors may face challenges. Globally, Europe and Asia might experience some bumps, but most economies should end the year strong.
Election Concerns
With more than half the global population in an election cycle, there's a concern about regulatory uncertainty. Companies are likely to address this in their earnings calls, impacting sales and expense forecasts as well as supply chain predictions.
Optimizing Your Investment Strategy with ETFs
Exchange-Traded Funds (ETFs) offer an efficient way to manage core portfolio positions. By minimizing fees and potentially offering superior returns compared to mutual funds, they present an attractive option. Additionally, they enable capturing returns from more aggressive, smaller positions as the opportunities present themselves to capture additional returns.
Fixed Income ≠ Fixed Position
Quality of credit continues to be a focal point in selection, especially amidst decade-long highs in interest rates. Adjustments in portfolio duration for domestic holdings are likely as a response to potential rate changes from the Federal Reserve. Additionally, cooling inflation will yield positive effects on fixed-income positions within portfolios.
Exploring Alternative Investments
The pool of appealing alternative investments is narrowing down, emphasizing quality within this sleeve of a portfolio. These opportunities are best used as a counterbalance to market volatility and risk. However, it's essential to note that the inclusion of such investments should be case-specific, not a general recommendation as is the case with most investment strategies.
Key 2024 Tax Changes
Expect inflation adjustments impacting various tax aspects:
Marginal tax brackets for different income categories.
Increased contribution limits for retirement plans and Health Savings Accounts (HSAs).
Changes in gift and estate tax thresholds.
Notable provisions from the SECURE 2.0 Act, including Roth accounts in 401(k) plans and Qualified Charitable Distributions.
Social Security Withdrawal Do-Over
If you regret claiming Social Security early and are receiving reduced benefits, the Social Security Administration offers options. Within 12 months of your application, you can withdraw your benefits application, though repayment could be substantial. You can also suspend your benefits up to age 70 to receive additional credits. Just be aware that while you will be able to receive more income when you do start back up, it will still not be the maximum amount you would have received if you never started receiving benefits in the first place.
If you would like to speak further on any of these topics, or any other financial concerns you have, let’s schedule a time to chat.
Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.
Managing wealth when your largest asset is real estate requires thoughtful strategies. From tax-efficient tools like 1031 exchanges to diversification through DSTs and UPREITs, each option offers unique benefits and trade-offs. Finding the right path depends on balancing growth, liquidity, and long-term goals while navigating the complexities of real estate investment.