June is here! Kristen & Chandler have returned from their vacations charged with new energy, and our office is ready to take on this summer’s tax planning season in full force. If you have not yet heard from us regarding scheduling a meeting, we will be in touch soon.
Welcome Anne Mills to the Team
Anne Mills (pronounced like “Annie”) joined our team the start of June as our new Client Service Manager. She recently graduated from Denison University with a Bachelor of Arts in economics and minors in Spanish and music performance. As our Client Service Manager, Anne looks forward to providing a wonderful experience for our clients and learning more about the finance industry.
3 New TD Ameritrade Client Login Features
Improved Account Summary
Upon logging into the client account, there is now a summary of your portfolio that includes all owned TD Ameritrade accounts. This summary also includes the total value of account assets, the change in value, and a detailed breakdown by specific account. This update is intended to create a simplified and uncluttered view of your information.
A graph is now available that will show current account balances and fluctuations over time. It will provide insight to compare balances at any given point and a quick glimpse at overall trends.
It may be better to use the NorthAvenue Client Portal as it tracks account value over time and includes outside accounts that are linked to provide a more inclusive view of net worth.
The interface of the website now provides a clean and simplified look that is easy to navigate.
News on Current Tax Bills
The SECURE Act Bill: Inherited IRA Stretch Changes
Last month, the House of Representatives passed a new tax bill called the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019. The Senate is working on their own version of the bill, which currently has some similarities. So while nothing is final, the version of the bill that has passed in the House provides some insight into what may be to come.
This bill is considered an “Enhancement” for retirement plan and IRA owners as it includes updated requirements that allow owners to make higher contributions to their work retirement plans, removes the cutoff of age 70 ½ by allowing currently employed persons of any age to contribute to traditional IRAs, and changes the required minimum distribution age to 72.
In contrast to all of these “Enhancements,” the bill creates an acceleration of taxes. Under existing law, non-spouse heirs of an IRA can stretch/extend the taxable distributions of an inherited IRA over their own lifetime. This allows taxes to be collected over the course of a lifetime. Under the SECURE Act, the entire IRA or retirement plan would have to be distributed within 10 years instead.
If you would like to read more, check out this article published by 401k Specialist Magazine.
Current State of Ohio Small Business Deduction
In May, the Ohio House significantly cut back on the current Ohio Small Business Deduction by passing a version of the state budget that will reduce the amount of small business income that owners can deduct from their personal Ohio taxes from $250,000 to $100,000.
The bill now heads to the Senate for debate. To read more, check out this article published by WOSU Public Media.
Alternative Allocation Insights Gained at FPA Chapter Meeting
Kristen, Chandler, and Martina attended the monthly meeting of the Central Ohio Chapter of the Financial Planning Association (FPA). R. Scott Henderson with Calamos Wealth Management presented alternative allocation strategies and how adding such alternatives to a portfolio of traditional assets may help lower risk while potentially enhancing returns.
Henderson reviewed the various types of alternative investments, which fit into three overall categories:
1. Non-traditional assets, such as commodities.
2. Non-traditional strategies, such as option trading.
3. Illiquid assets, such as private equity.
NorthAvenue does not currently include alternative investments as part of our investment strategy. Furthermore, the Q&A that followed the presentation highlighted several of our reasons for this.
Firstly, alternative investment options at market are relatively new. Because this is a newer area of investing, recent performance shows that many of these funds have not done as well as their fund managers had promised. Henderson showed that these types of funds have additional fees that mutual funds, like DFA and Vanguard in our client portfolios, do not have. The higher fees negatively impact the desired performance.
Not only are alternative options more expensive, but they are much more complex. We believe that it’s important to have an investment strategy that is not only effective but also allows our clients to feel comfortable understanding how their invested dollars accomplish their goals.
Lastly, our current investment strategy allows our clients to take advantage of market downturns by taking money from their bonds—which hold their value—and investing in equities at the lower price point. If the safe and stable portion of a client’s portfolio is invested in alternative investments, it could potentially limit availability of those safe and stable funds when they might be needed most.
While we don’t find alternative investments to be a good option for our clients at this time, we do appreciate the opportunity to continue our education on such topics.
Women’s Fund Keyholder 2019
NorthAvenue is a proud advocate sponsor of Keyholder 2019 hosted by the Women’s Fund of Central Ohio.
On Wednesday, May 22nd, Kendyl and T.J. attended The Women's Fund of Central Ohio's Keyholder 2019 at the Ohio Theatre with their significant others. Keyholder 2019 brought together women and men of all backgrounds to celebrate their shared efforts to create gender equity and to inspire the community to continue to work on the challenges that lie ahead.
"In some ways, there was no other choice than to become an activist, and I won't go home until the work is done." - Brittany Packnett
Columbus welcomed guest speakers, Brittany Packnett, Aly Raisman, and Piper Perabo to the stage to share their stories that have motivated them to be warriors for social change. They inspired the audience to find their purpose, make space for other people, and listen.
To Travel is to Live
Cross-country Trip to Yellowstone National Park
Kristen and her husband, Jeff, enjoyed a two week trip to Yellowstone National Park. They packed up their car and took to the open road. Heading out to Yellowstone, they traveled the northern route through South Dakota. They marveled at the Badlands and Black Hills, as they encountered various snow storms on their way into the National Parks.
In Yellowstone, they saw a number of bears, both black and grizzly, experienced numerous encounters with buffalo herds, saw a countless number of female elk, and witnessed several foxes in the snow. In Grand Teton, Kristen was in awe just looking at the Teton Mountain Range. It is absolutely breathtaking. A female moose and her baby made an appearance on that portion of the trip.
The drive back included stops in Denver, where Kristen and Jeff celebrated their four-year wedding anniversary, as well as Kansas City and St. Louis. Kristen highly recommends both the World War I Museum and Negro League Baseball Museum in Kansas City.
Central America Getaway
Chandler and her significant other, Eric, spent a week in Lake Atitlan, Guatemala, known as one of the most beautiful lakes in the world, surrounded by volcanoes. The view from their hotel room, perched up the side of a cliff, was breathtaking. Each day, they took trips by boat taxi to the neighboring Mayan towns around the lake. While this area is a tourist destination, they were pleasantly surprised to find that it was enough out of the way (four-hour drive from the airport with hairpin turns) that it hadn’t yet become a tourist trap. They loved the lakeside views, snorkeling, and learning about Mayan culture. They brought back several pieces of art and textiles that they can’t wait to display in their home.
Next up was Oaxaca, Mexico, where they met up with several friends from high school for Chandler’s birthday celebrations. The AirBnB that they stayed in had an incredible courtyard, and her friends secretly bought a unicorn piñata and hung it in the courtyard as a surprise. Together, they saw the sights – Hierve El Agua was a favorite - but they mostly enjoyed catching up with each other over excellent food.