Artificial intelligence has quickly become one of the biggest stories in today’s markets. It seems like every week brings another announcement about a breakthrough in AI, another company incorporating it into its business, or another stock reaching new highs because of its perceived AI potential. As a result, many investors are wondering what role AI should play in their investment strategy.

The excitement is understandable. AI has the potential to improve productivity, lower costs, and change the way businesses operate across a wide range of industries. At the same time, investors should remember that technological innovation and successful investing are not always the same thing. While major advancements can create tremendous opportunities, they also tend to generate periods of heightened optimism that don’t always match reality.

Every Major Innovation Brings Opportunity

History offers several examples of this pattern. Railroads transformed transportation, electricity revolutionized manufacturing, and the internet fundamentally changed communication and commerce. Each of these innovations created lasting economic value, but the path was rarely smooth. Some companies became long-term winners, while many others that appeared promising early on ultimately struggled or disappeared altogether.

Artificial intelligence has the potential to be another technology that changes the way businesses operate. While the long-term impact remains uncertain, it’s clear that companies across many industries are investing heavily to better understand and utilize its capabilities.

Why Markets Are Paying Attention

Much of the market’s enthusiasm surrounding AI comes from its potential to improve business efficiency. Companies are using AI to automate repetitive tasks, analyze large amounts of data, improve customer service, and streamline operations. If these improvements continue, businesses may be able to increase profitability without significantly increasing costs. Investors have recognized this potential, which has contributed to strong performance among many companies associated with AI.

It’s important to remember, however, that markets tend to look well into the future. Stock prices often reflect expectations about tomorrow rather than today’s results, which means optimism can sometimes outpace reality.

AI Isn’t Just a Technology Story

Although technology companies receive most of the attention, AI’s impact extends well beyond the technology sector. Healthcare providers are using AI to assist with diagnostics and medical research. Manufacturers are improving production processes and quality control. Financial institutions continue to expand its use in fraud detection and risk management, while retailers are using AI to better understand customer behavior and improve inventory management.

As adoption continues to grow, many companies that benefit from AI may not actually be the ones developing the technology. Businesses that successfully use AI to become more efficient and better serve their customers could see meaningful advantages over time.

Innovation Still Comes With Risk

None of this means investors should ignore risk. New technologies often create high expectations, and markets have a tendency to price in future success well before it occurs. Even when an innovation proves to be transformational, not every company involved will become a long-term success. Competition increases, business models evolve, and today’s market leaders may not be the ones leading the industry ten years from now.

For investors, that serves as a reminder that strong fundamentals, reasonable valuations, and long-term business quality still matter. Exciting headlines alone rarely make for a sound investment strategy.

Why Diversification Still Matters

This is one of the reasons diversification remains such an important part of investing. Concentrating too much of a portfolio in one company, sector, or investment theme can increase risk, particularly when expectations are already high. A diversified portfolio allows investors to participate in areas of long-term growth while reducing the impact if one segment of the market experiences a setback.

Diversification doesn’t eliminate risk, but it helps ensure that a portfolio isn’t dependent on any single trend, industry, or company to achieve long-term success.

Keeping a Long-Term Perspective

It’s equally important not to let daily headlines dictate investment decisions. Financial news naturally focuses on what is new and exciting, and market sentiment can shift quickly as new information becomes available. Building long-term wealth, however, has rarely depended on reacting to every headline. Instead, it comes from maintaining a disciplined investment strategy that reflects an investor’s goals, risk tolerance, and time horizon.

Artificial intelligence will almost certainly remain a major investment theme for years to come, and its long-term impact on businesses and the economy could be significant. While no one can predict exactly which companies will emerge as the biggest winners, investors don’t need to make that prediction to benefit from innovation. A diversified portfolio built around high-quality investments and a long-term perspective remains one of the most reliable ways to participate in the growth of new technologies while managing the uncertainty that inevitably comes with them.

A Roth conversion is the process of repositioning your assets from a Traditional IRA to a Roth IRA. It is a unique and exciting retirement savings

opportunity! The purpose of the conversion would be to shift your assets into a Roth IRA which has the optimal tax-favored status.

So why would you consider such a move?

• Qualified distributions in retirement will be tax-free.

• Roth IRA owners are NOT required to take distributions while alive, allowing more flexibility on income tax planning.

• The Roth is a more flexible IRA for legacy planning or passing on to your heirs.

We had a client who came to us concerned about the substantial Traditional IRA they had amassed over their career. They were in a moderate tax bracket and were concerned that their Required Minimum Distributions from their IRA were going to be a burden. As this account was a substantial part of their wealth, they were also concerned about an efficient way to pass this asset on to their heirs. We recommended a Roth conversion over the next few years to slowly decrease their IRA balance to reduce future IRA RMDs.

Now, in retirement, our client enjoys unique tax diversification. Due to flexibility on if/when they take distributions from the Roth IRA, and the tax-free nature of these distributions; we can have better control over the distributions they take from the account, and their overall tax liability.

Our client was also very intrigued when we explained that their heirs would receive Roth IRA distributions tax-free. Their Roth is now allowing very flexible legacy planning.

The owner of the Roth IRA does not have to take Required Minimum Distributions from their account, unlike traditional IRA which require them to start distributions after they reach age 73. They can decide how much to take from the Roth IRA each year depending on their income, or one can
choose not to make any withdrawals.

In sum, it makes sense for you to make a Roth IRA conversion if:

• You expect to be in the same or higher tax brackets during retirement.

• You are looking for tax diversification in retirement.

• You may not need the funds for retirement and are considering transferring them to your beneficiaries.

• You won’t need the converted Roth Funds for at least five years.

It would be wise to find an advisor who could create an accurate projection for you to determine if a Roth IRA conversion would be the right decision for you. Our client’s projections were very advantageous; therefore, the Roth conversion was the right move.

Here at Schenley Capital, we focus on creating strategies that help you maximize the use of additional tax-saving vehicles. Whether it is planning for retirement, tax-efficient investing strategies, or figuring out the best way to leave assets to your heirs, we would love to talk to you. Additional strategies
can be implemented for large Traditional IRAs, such as donating your Required Minimum Distribution through a QCD, donor-advised fund, designated fund, or setting up specific trusts. We help shape investment plans that help achieve these goals, along with comprehensive financial planning for all
other aspects of life. Reaching your financial goals is a lifelong project – the sooner you start and the more you contribute, the quicker you can enjoy the benefits. Schedule a meeting to talk further with us about which financial strategies would be just right for your situation! Happy Holidays!

As we are quickly approaching the end of the year, we should all be thinking of actions we can take before year-end to reduce our taxes. For many of us, this is not a fun topic to think about. We thought it would be helpful to remind you of a couple of tax tips you can use with the help of your advisor or on your own. Below are five tax saving strategies to do before the end of the year.

#1: Complete Your Annual IRA Contribution:

• • In 2023 you can contribute $6,500 plus a $1,000 catch up provision if you are 50 or older. These can be towards either your Traditional IRA or Roth IRA. We encourage our clients to contribute to one of these accounts regardless of their income threshold.
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  • For 2023, the income limits to make a deductible contribution to a Traditional IRA are $116,000-$136,000 for MFJ or $73,000-$83,000 for MFS (along with Single filers). Although you will ALWAYS be able to make a nondeductible contribution to a traditional IRA, regardless of your level of income.
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  • Another alternative is the Roth IRA. This allows an individual to contribute after-tax money to grow tax free and have the chance to be completely tax free upon a qualified withdrawal. The income limit for a ROTH IRA in 2023 is $138,000-$153,000 for single filers and $218,000-$228,000 for Married filing jointly. If you are above these thresholds, consult with your tax advisor on options such as making a nondeductible Traditional IRA contribution or completing a Roth conversion.

#2: Maxing out your contribution to your company 401(K) plan.

• • Another end of year tax item is maxing out 401(K) contributions. Individuals are allowed to place $22,500 plus a $7,500 catch-up if 50 or older and up to $66,000 for the combined employee and employer contribution. For most people, their 401(K) is the largest retirement asset. Maxing out this vehicle can is a tax efficient way to fund your retirement.

#3: Tax Loss harvesting

• • It is wise to look at your individual investment portfolio and sell the losers you have been carrying in your portfolio and offset the losses by selling some stocks which you have experienced gains. Crossing your gains with your losses will result in no taxes being owed (0%-20% capital gains tax) on your investment gains, if done properly.
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  • In addition, this will rebalance your portfolio so that you can invest in new companies which will grow and produce dividends in the future.
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  • Due to recent market declines, many of our portfolios may be carrying losses. If your losses exceed your gains, you can carry these forwards to be used in the future. Beware, you can use up to $3,000 of losses per year in future years to offset capital gains. This is called a loss carry forward.

#4: Create a Donor Advised Fund

• • As the standard deduction in 2023 is high, ($13,850 for single and $27,700 for joint filers) less Americans are itemizing on their tax returns. It is smart to initiate a charitable fund for yourself with the goal of making charitable gifts in the future.
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  • This technique is called a Donor Advised fund. The Donor Advised Fund could be set up at The Pittsburgh Foundation or with your advisor at Schwab. This fund is used for making the gifts you normally make to your favorite non-profit organizations. Although you can “bunch” your gifts together and make one large gift to your Donor Advised Fund (DAF) you will have a large tax deduction in the year you make the donation. Individuals” bunch” their expected donations for multiple years into one year’s donation by contributing to a donor advised fund. The taxpayer will then be able to deduct the full amount contributed to this fund as a charitable contribution. The benefit of the DAF is the ability to make the gifts in the future while receiving an instant tax deduction in the current year when they make the contribution to the DAF.

#5: Required Minimum Distributions:

• • It is very important to remember to take your required distribution from your Individual Retirement Account, (IRA) if you are 73 or older. The penalty for missing this distribution is 25% of the amount not taken.
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  • You can better utilize your Required Minimum Distribution (RMD) by making a gift to a non-profit organization. This strategy is highly effective, as you will NOT pay income tax on the amount which you gift to a 501 (c) (3) organization.
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  • If you are trying to figure out how to efficiently take your RMD without incurring a large tax in the current year, you may be interested in a Qualified Charitable Distribution. A Qualified Charitable Distribution allows the IRA owner to make a gift of up to $100,000 to a qualified charity without paying taxes on the Required Minimum Distribution. You could also make this $100,000 gift to your Donor Advised Fund annually. You would in turn give gifts from your donor advised fund to charities for many years as the funds grow.

We assist our clients in explaining and completing one or all these tax saving strategies each year. We begin reviewing and talking with our clients in August of each year to ensure we can complete each process by year-end

Our clients recently came to us to manage their family’s portfolios. They are nearing retirement and are concerned about taxes. They mentioned that they had just bought a beautiful home on the Isle of Palms in South Carolina near Charleston. They thought it was the place for them to retire and a convenient place for their three children to gather during the holidays. During one of our meetings, the Smiths asked how they could pass on the Isle of Palms home to their three children without paying a large gift tax on the transfer. We suggested the technique of initiating a QPRT – a Qualified Personal Residence Trust.

We explained that the purpose of this trust was to remove the home from their estate and reduce the gift tax on the appreciated value of their South Carolina home. This is huge – QPRTs are usually for second homes, beach homes, or ski houses which experience a great deal of appreciation. Therefore, removing the assets from the estate and making a gift to your children is a tax-efficient way to pass on a real asset to your children. Excited by the idea and the notion of lessening their estate tax burden they listened to the idea. They knew they wanted their children to have the Isle of Palms house.

We continued to clarify that a QPRT is an Irrevocable Grantor Trust, which means that you transfer your second home during your lifetime into a trust for a period of time and the grantor could name their children as beneficiaries who will receive the house after the term of the QPRT had expired. The Smiths liked the fact that they could continue to live and enjoy the property year-round and that of course the kids would be able to visit.

The Smiths would transfer the property by recording a deed with the local property registry and retitling the residence in the QPRT’s name such as the Smith Pennsylvania Personal Residence Trust. There is a time term, meaning that the Smiths must live for a period of time for the Trust to be effective. For example, seven (7) years. After seven years, the house and the appreciated value of the home now belong to their three kids. They said, “Wait a minute, we don’t want to be kicked out of our own home!” We reassured the Smiths that they would still live in their home, and maintain the house – business as usual. Although your children own the home.

They were thrilled to learn that they could enjoy the house and have the ownership passed to their kids in a smooth fashion. More importantly, the Smiths recognized the value and appreciated value of the home would be removed from their estate as a taxable asset. If the Smiths did not outlive the term for the QPRT then the value of the property would be included in their taxable estate.

The last little wrinkle, which was a bonus, we told the Smiths they could gift money to their kids in the form of “rent.” The QPRT rules state that the Smiths should pay fair market rent to their kids, as they are the new owners of the house. John Smith said, “Forget it, we are not paying our kids rent, as the house is our house!!”  We clarified that paying “rent” to your three kids is just another way to remove cash from the estate efficiently, by gifting it to their kids. After all the Smiths wanted their children to have the money so why not see them enjoy it? After John thought for a minute, he said he could see the value of giving his kids a little cash without having to consider the money as a gift for gift tax purposes.

As we walked through the idea of a QPRT with the Smiths for their Isle of Palms home there were so many positive attributes for this estate planning idea. They were fond of the idea of being able to give the house to their kids efficiently and effectively. They knew that the house was just going to increase in value each year and they did not want to have a large tax burden for their kids, this appreciation in the house would be sheltered inside the QPRT. What huge tax savings and a great relief!!

We are happy to talk about the idea of a QPRT or other thoughts concerning your investment portfolio.

Beth Genter 

Schenley Capital Inc. 

417 Walnut Street, Suite 200 

Sewickley, PA 15143 

(412)-749-9256

GENERAL DISCLAIMER:

This scenario is based on real client interactions but not on a specific client. Schenley Capital, Inc. does not provide legal, accounting, or tax advice. Any statement regarding such matters is explanatory and may not be relied upon as definitive advice. All investors are advised to consult with their legal, accounting, and tax advisers regarding any potential investment.

Albert Einstein once said, “Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it”. So, what is this compound interest Einstein spoke about? The definition of compound interest is the interest associated with your bank account, loan, or investment account increasing exponentially, not linearly. In simple English, this compounding effect can be thought of as a snowball rolling down a large hill. The snowball can begin very small, but depending on the size of the hill can end up being quite large in the end.

To ensure you completely understand this concept, we will use an example of an investment account earning 5.5% (roughly the current yield on a 6-month treasury bill). Say you invest $10,000 in that account at the beginning of 2023 and leave it in the account until the end of the year, the account would be worth $10,550. (5.5% of $10,000 is $550 in interest earned + the initial $10,000 investment). Now assume you reinvest the money into a treasury bill in 2024 earning the exact interest of 5.5%. By the end of the year your account will now be at $11,130.25 (5.5% of $10,550 is $580.25 in interest earned + the previous balance of $10,550). Fast forward to your 10^th year repeating this process you would have $17,081.44 in the account. Fast forward another 10 years to your 20^th year repeating this process, and your account would be at $29,177.57. Finally, let’s assume you’re a very patient person and repeat this process for 50 years, without investing any more than your initial investment of $10,000, your account would be worth $145,419.61. This effect is illustrated in the graph above. The contributions remain the initial investment, however, the interest grows exponentially over time. This example assumed no further contribution after the initial investment of $10,000. We also assumed a fairly conservative rate of 5.5% (the average return of the stock market for the last 50 years was 10.5%). We hope this illustrates how wealth can be accumulated, simply by consistently saving and investing over a long period of time.

Now that we understand what Einstein meant when he said, “he who understands it, earns it.” It’s important to also note what he meant when he said, “he who doesn’t, pays it”. Debt has the same effect. Credit card debt is a huge problem in America, with people not understanding the large snowball effect of debt they are creating personally. This debt lowers an individual’s credit score and hinders them from taking on good debt, such as a mortgage on a home. The average American has about $6,000 in credit card debt. The average interest on this debt is 25% annually, with some as high as 29%. The same exercise used above illustrates how this snowball effect can become a problem if managed poorly.

Here at Schenley Capital, we focus on creating strategies that help you maximize the potential of compound interest. Whether it is retirement planning, saving for your child’s future college expenses, or even managing debt. We help shape investment plans that help achieve these goals, along with comprehensive financial planning for all other aspects of life. Reaching your financial goals is a lifelong project – the sooner you start and the more you contribute, the quicker you can enjoy the benefits. We encourage our clients to open tax-advantaged accounts such as Roth IRAs, Traditional IRAs, and 529 accounts. Schedule a meeting to talk further with us about our financial strategies!

Beth Genter
Schenley Capital

How do market volatility, inflation, and rising interest rates affect your financial outlook?
When the markets are turbulent and volatile for an extended time period, it is difficult to stay the course, although that is exactly the action we are advising our clients. Investors can no longer buy the four popular growth stocks and expect their portfolios to increase each day. We have invested our client’s money in a diverse group of very high-quality stocks with sizable dividends. These companies maintain a high cash flow, have steady revenues, are usually leaders in the global marketplace, and distribute a large quarterly dividend to their stockholders. These companies increase in value over a long period of time, which is why we hold these stocks in our portfolios.

As we heard from Jerome Powell, chair of the Federal Reserve Board, the Federal Reserve increased rates by .25 basis points. By doing so the Feed is attempting slow-down economic growth which will lead to slightly higher inflation. The intention of the Fed is to stabilize the economy, which in turn negatively impacts the stock market. We believe that the economy has slowed down to an appropriate level and that the Fed has accomplished its goal.

Monetary policy in the United States is controlled by The Federal Reserve. The Federal Reserve (Fed) controls the money supply through its three “tools”, open market operations, reserve requirements, and the discount rate. The Fed uses its tools to target the Federal Funds Rate, which is the rate commercial banks borrow and lend their excess reserves to each other overnight. The Fed meets eight times a year to set the target interest rate. 

On Wednesday the 22nd, the Fed concluded a two-day meeting announcing another quarter-percentage-point interest rate increase. This will now bring the benchmark Federal Funds rate between 4.75% and 5%, the highest level since September 2007. This marked the ninth consecutive rate increase in the past year, to tame inflation.  

It was a very delicate decision, as Fed Chairman Jerome Powell hinted that this increase could be the last increase for the time being. Powell said that the U.S. banking system is “sound and resilient” although the central bank needs to strengthen supervision and regulation of the financial sector after the collapse of several banks this month. When questioned further, Powell said the Fed “considered” a rate pause due to the recent banking crisis. However, economic data has come in too strong, and the Fed is very persistent in its actions to bring inflation down to 2%. Powell said that “we have a long way to go, and the ride will likely be bumpy”.  

Whether the Fed would increase the Federal Funds Rate has been a debated topic due to the recent banking turmoil beginning with the collapse of Silicon Valley Bank (SVB). Many have criticized the Fed in the past two weeks, saying the hikes have been hurting the working class. In this meeting, Powell defended the actions of the Fed, saying inflation will hurt more if left untreated. Powell’s goal stands to contract the economy, reduce hiring, and slow economic growth to reduce inflation levels. 

Leading up to the decision, there seemed to be three possible outcomes. The Fed could begin to cut rates, signaling the issues in the markets are more significant than inflation; seemingly admitting they had been too eager in their past increases. Or the more likely scenarios, either a rate pause or a rate hike. Either way, markets could perceive this as negative. A pause would signal severe underlying economic issues that were caused by the rapid rate hikes and stress on banks. A rate hike could be perceived as a relentless attempt to battle inflation.  

In the press conference on Wednesday, Jerome Powell answered many questions about their quarter-percentage-point raise. A big takeaway was the chairman’s language. In past meetings, they have forecasted “ongoing rate hikes”, however, the new language has turned to “may and some” hike(s) in the future, depending on economic data. Future decisions will be taken on a meeting-by-meeting basis. The Fed indicated that rates could pause by year end, around 5.1%. Powell stated, “The question will be how long this period will be sustained,” referring to the current tightening of the economy.  

In sum, the Fed expressed their main concern is still bringing inflation down to their 2% goal. The broad market indexes rebounded this morning with investors perceiving the potential slow-down in rate increases as good news. The Fed will be waiting to see how much the recent events slow the economy, which could help their efforts to cool the economic growth. Powell did not provide clarity on whether a soft landing is still possible.  

Schenley Capital, Inc. 417 Walnut Street Suite 200, Sewickley, PA 15143, (412)-749-9256 (info@www.schenleycapital.com)

The past week has been strange, to say the least. Within the week, there were two of the largest bank failures in U.S. history since 2008. This has led to the very common question “What does this mean for me?”

March 8^th, 2023, Silicon Valley Bank (SVB) announced they had sold off one of their bond portfolios at a significant $1.8 billion loss. This caused a domino effect of people fearfully pulling their money from SVB, known as a run on the bank. By Friday, March 9^th regulators had taken over the bank and halted trading for SVB stock.

Unlike the 2008 financial crisis, this was not due to extreme fraudulent bank behavior. Other than some poor judgment by management on purchasing longer-duration bonds at low rates, no illegal practices have surfaced. This situation was exacerbated when the rates rose quickly and SVB was forced to sell government bonds before the maturity date, which created losses for the bank. This situation occurs when one sells a bond before maturity when interest rates have risen, making your bond less valuable receiving a lower price at the time of the sale. This resulted in a liquidity issue due to the extreme rate increases brought on by the fed to cool the macro environment. A bit of a perfect storm.

The financial sector, which includes banks and brokerage firms, has experienced a dramatic sell-off due to a massive decline in confidence and fear in the U.S. banking system. Silicon Valley Bank’s weakness began with their customer concentration of venture capital and smaller start-up companies, which are vulnerable and dependent on raising cash continuously. Due to the historic bull market brought on by low-interest rates in 2020, many people looked to diversify outside of the stock market. A popular place was alternative investments, such as venture capital and private equity firms.

When banks receive deposits, they turn around and invest those deposits into safe government-backed securities, helping boost their net interest margin (NIM). Due to the large influx of cash into alternative investments, many of the SVB customers rapidly increased their deposits at the bank. To put into perspective, deposits at SVB skyrocket from $61 Billion at the beginning of 2020 to $175 Billion in 2022.

With rates at exceptionally low levels during the pandemic, Silicon Valley Bank looked for safe places to put their funds, leading them to invest a significant amount into longer-duration government bonds at low rates. Bond prices drop as rates rise. When interest rates began to rise at a record pace, this became an issue. Once larger customers of the bank began pulling their deposits, SVB was forced to realize these bond losses. In a swift and decisive move, the Federal regulators took over the Bank.

These are very isolated situations, as SVB serviced small start-up companies and venture capital firms. Larger banks tend to have significant cash reserves and are carefully monitored by regulators to ensure proper liquidity standards. The Federal Deposit Insurance Corporation (FDIC) insures each account up to $250,000. The Federal Reserve joined the Treasury in saying that they will make sure all depositors in the two large banks are repaid in full.

This time can lead to many financial questions and concerns, at Schenley we recognize and capitalize on opportunities in such a market. Please remember we are here to help navigate these confusing and concerning times. If you have any questions please contact us!

Schenley Capital, Inc. 417 Walnut Street Suite 200, Sewickley, PA 15143, (412)-749-9256 (info@www.schenleycapital.com)

An “IRA” or Individual Retirement Account is a tax deferred investment account that helps you save efficiently for retirement. Money placed in the account grows tax deferred. Two popular IRA accounts are the Roth IRA and the Traditional IRA. 

Choosing a Traditional IRA, you may get a tax deduction on your contributions for the year that the contribution is made, you then pay tax when you take out the distributions in retirement. There is no income limit to contribute to a Traditional IRA. However, there are income limits to deduct the contributions from your taxes. Phaseouts in 2023 begin for Traditional IRA tax deductions for single filers whose gross income exceeds $73,000 ($68,000 in 2022) and for joint filers with exceeding $116,000 ($109,000 in 2022).  

On the other hand, a Roth IRA has no tax deduction, but distributions in retirement are tax-free, due to the after-tax contributions. There are income limits to contribute to a Roth IRA. The phaseouts in 2023 begin for single filers making more than $138,000 ($129,000 in 2022), and joint filers with more than $218,000 in gross income ($204,000 in 2022). 

So, how does your IRA work? You deposit funds into the IRA each year, allowing you to invest in stocks, bonds, mutual funds, and ETFs. This flexibility to invest differs from most employer sponsored retirement plans, which typically provide a limited number of investment options. How your account grows over time depends on how much you contribute to the account and how well you invest! 

You can contribute to your IRA account each year in addition to contributing to a work sponsored retirement plan, such as a 401(K), 403 (b), and SEP (Simplified Employee Pension). Keep in mind once money is contributed to an IRA, you should not withdraw until after age 59 1/2. However, if you must access these funds earlier, you will pay a 10% penalty and the funds will be included in your gross income to be taxed at your income bracket. For a Roth IRA, you may withdraw the contributions any time, tax-and penalty-free. However, you may have to pay taxes and penalties on any earnings you remove from your Roth IRA. Lastly, owners of Traditional IRAs are forced to begin withdrawing funds the year they reach age 72. More favorably, the Roth IRA does not require you to withdraw money from the account if the account owner is alive.

To contribute to an IRA, you are required to have received taxable earned income. In 2022 you can contribute the lesser of $6,000 or 100% of earned income, with a $1,000 catchup if you are 50 years or older ($7,000 total). Due to inflation, in 2023 you can contribute the lesser of $6,500 or 100% of earned income including a $1,000 catch-up for those aged 50 and older ($7,500 total). If you haven’t made your full contributions to your IRA for 2022, you have until April 18th, 2023.

We realize there are lots of things to remember when planning for retirement. Here at Schenley Capital, we focus on creating strategies that help you maximize your nest egg. Whether it is retirement planning, saving for your child’s future college expenses, or long-term wealth planning. We customize investment plans to help you achieve these goals, along with comprehensive financial planning for all other aspects of your life. Reaching your financial goals is a lifelong project – the sooner you start and more you contribute, the quicker you can enjoy the benefits. We encourage our clients to open tax-advantaged accounts such as Roth IRAs and Traditional IRAs. Call us to set up a meeting! 

Schenley Capital, Inc. 417 Walnut Street Suite 200, Sewickley, PA 15143, (412)-749-9256 (info@www.schenleycapital.com)