Employer-sponsored retirement plans, like 401(k)s, are designed to encourage saving during your career but are not efficient when it comes time to take money out.
How Withdrawals Are Funded
Many 401(k)s don’t enable choice when investments are sold. Some plans sell pro-rata (every investment is sold based on its percentage of your account). Others use a hierarchy-based approach where investments are sold in a predetermined order, often cash and low-risk assets first, which would leave your remaining investments skewed toward riskier assets. Both methods would mean you’re taking unnecessary risks and leaving investments not aligned to your needs.
Mandatory Tax Withholding
401(k) distributions are typically subject to mandatory 20% federal income tax withholding, regardless of whether this is the right amount for you or how you would like to pay. Effectively, it requires taking an extra 25% of taxable income to realize the same amount of cash.
Required Minimum Distributions (RMDs) and Account Aggregation Rules
Once you reach age 73 (or 75, depending on your birth year), the IRS requires you to take a minimum amount from retirement accounts each year. With 401(k)s, you must calculate and withdraw the RMD from each one separately.
Consider rolling 401(k)s into an IRA for several advantages:
Broader investment choices – 401(k)s typically have a limited menu of investment options which may or may not suit your needs in retirement.
More flexible withdrawal strategies – including the ability to choose exactly which assets to sell and when.
Customizable tax withholding
Ability to aggregate RMDs – If you have multiple IRAs, you can choose to take your combined RMDs from a single account, reducing the likelihood of missing one and incurring a penalty.
If you’re approaching retirement, now is the time to review your options and develop a withdrawal strategy that aligns with your goals, not just your plan’s default settings.
Call us today to learn how we can help. 404-941-2800
Many schools don’t teach Financial Literacy.Beyond a formal education, one of the most powerful gifts you can share is how to manage money.
Encourage them to get started with investing early. Compounding returns over time is like a rolling snowball accumulating more and more wealth.
Does your high schooler or college student have a summer job? Contribute a portion of their earnings to a Roth IRA.
Has your new grad received monetary gifts from family? Talk to them about investing some of that money for their future self.
A single $1,000 investment at age 20 could turn into $80,0001 by age 65. Wait 10 years to make that investment, and it’s less than half the amount by age 65.
First job? Maybe coming up with $1,000 all at once sounds like a lot. What if they could invest just $100 a month?
Investing just $100 a month beginning at age 25 could grow to $530,0001 at age 65! Putting in $48,000 over 40 years and ending up with over $500,000 is pretty compelling.
Treat investing like a bill you pay to your future self. Automate it and let compound growth make life-changing decisions possible.
Here are some ideas to free up money for investing each month.
Cancel subscriptions not used regularly
Make coffee at home
Cook some meals at home
Use cashback credit cards (as long as they’re paid off each month) and invest the bonuses
One last question your kids may have – what if they can’t invest consistently for 40 years? Is it still worth it?
Investing $100 a month beginning at age 25, then stopping at age 45 could still turn into $330,000 by age 651.
The takeaway? Start early and be consistent. Small, regular contributions now can lead to life-changing outcomes later.
Call us today to learn how we can help. 404-941-2800
Navigating the complexities of financial planning requires trust, transparency, and a commitment to your best interests. At Integras Partners, we proudly embrace our role as fiduciary advisors, ensuring that every recommendation and strategy is aligned with your unique goals and values.
The Fiduciary Difference
Being a fiduciary means we are legally and ethically obligated to always act in your best interest. Unlike some financial advisors who may earn commissions on products they sell, Integras Partners operates on a fee-only basis. This structure limits conflicts of interest, allowing us to provide unbiased advice tailored solely to your financial well-being.
Building Long-Term Relationships
We believe that effective financial planning is rooted in understanding you—your aspirations, values, and life circumstances. By fostering long-term relationships, we can adapt your financial strategies to life’s changes, whether it’s a career transition, family milestone, or market fluctuation.
Transparent Communication
Transparency is key to building trust. We take the time to explain our investment strategies and the rationale behind any changes. Our clients receive regular updates, including quarterly performance reports and market commentary, ensuring you’re always informed about your financial journey.
Holistic Financial Planning
Our approach goes beyond investments. We offer comprehensive financial planning services that encompass tax efficiency, retirement planning, estate considerations, and legacy goals. By addressing all aspects of your financial life, we aim to provide a cohesive strategy that supports your long-term objectives.
Peace of Mind Through Market Cycles
Market volatility is inevitable, but with Integras Partners, you can have confidence in your financial plan. Our investment strategies are designed to withstand market fluctuations, focusing on long-term growth and stability. This resilience allows you to focus on living your life, knowing your financial future is in capable hands.
Choosing a fiduciary advisor like Integras Partners means placing your trust in a team dedicated to your financial success. Our commitment to unbiased advice, personalized planning, and transparent communication ensures that your financial journey is guided with integrity and expertise.
Talk to us and get some personal guidance.
Call us today to learn how we can help. 404-941-2800
2025 is a tumultuous year for financial markets, which understandably is rattling even the most experienced investors. While we can’t control investment returns or government policy, focusing on things that you can control may alleviate some of the anxiety.
1. Don’t panic, and remember, this too shall pass. There are scores of historical examples where surges in negative sentiment preceded above-average market returns. In the eight times when sentiment fell by 10% or more in a month, forward returns were higher is seven of them. Average returns 6 months later were +12%, and 12 months later +22%. No one knows that today’s declines will result in a similar experience, but markets usually find a way to rally over walls of worry.
2. Ensure savings accounts are working for you. As you are able, keep some extra cash on hand. Most big bank accounts have pitiful interest rates. Consider a high-yield money market, paying 3.50% or more, and link it to you checking account for ease of moving between accounts when needed.
3. Are your investments actively managed? This is not the best time to be a passive investor, or hold mostly index funds. Continued tariffs will create winners and losers. Market research will be very important to identify vulnerability and opportunity.
The financial markets have been rattled by tariffs. As investors, we reserve judgement on policy and seek to interpret economic impacts on companies we might invest in. We have to assume that tariffs, in some form, will go into effect. A pickup in inflation and lower economic growth is on the table. The impact of this uncertainty is bearish for stocks. The only certainties are that economic and market risk is high, we are in an extremely dynamic situation, and there will be rarely-seen investment opportunities.
As the credit (bond) markets often foretell economic deterioration, when the warnings appeared, we took action. At the end of March, we reduced holdings of more vulnerable sectors in our strategies, like tech and mega-cap stocks. Then when the S&P 500 Index® failed to hold its 200-day moving average (known as a “death cross”), we again took some stock exposure off the table.
Market volatility spikes like this are likely to prove short-lived. When it does settle, we are in position to reinvest parked cash with a constructive long-term perspective. While stocks are random in the short term, they always reward investors over longer periods of time.
Our clients take comfort in knowing that they have truly diversified portfolios. We insulate projected spending for the next few years from market gyrations, so the bulk of investments can remain in stocks for many years to capture gains. So, whether we see a bear market or even an economic recession, our clients are able to continue living life as normal.
Call us today to learn how we can help. 404-941-2800
While the beginning of the year was promising, US equities ended the first quarter near correction territory (defined as a decline of 10%). Market corrections are an inevitable part of investing and not uncommon, typically occurring about every 18 months. Given how market gains became concentrated in a handful of very expensive stocks, a correction was expected, especially with the prospect of heightened volatility following the new administration’s tariff policies.
Mega cap stocks, along with the growth-oriented companies associated with AI that carried the market higher over the last two years saw an outsized decline. The long-awaited participation by lower priced stocks and international markets was finally taking hold, right up until the upsized tariff announcement on April 2nd, which sent global stock markets into tailspin. The risk of the correction turning into a bear market (a 20% decline) increased significantly, especially when alarm bells in the bond markets sounded.
We experienced a temporary relief rally after the 90-day tariff pause was announced (which we attribute to upset credit markets), then uncertainty again took hold as investors digest how a possible trade war with China and other countries may play out.
The direction markets go from here directly hinges upon how trade policy ultimately settles. We view this as a 50/50 scenario – and therefore mostly uninvestable.
That does not mean that we have not taken action. Helping our clients achieve long-term financial success is a primary mission. We take action to avoid normal temporary downturns and corrections that could evolve into full-fledged bear markets. Learn more about how Integras Partners is navigating today’s markets.
Call us today to learn how we can help. 404-941-2800
Media personalities often recommend investing in the S&P 500 Index®. Since the indexes are really a list of stocks, you can only invest in mutual funds or Exchange-Traded Funds (ETFs) like SPY and VOO that own the list of stocks. Index funds are often chosen for their low fees.
Investors may not realize that index funds don’t own equal amounts of the stocks in the index. The ‘500’, for example, is weighted so that the most valuable companies represent the largest percentages of the index. Today, with the acceleration of AI, stock indexes and the corresponding ETFs have become increasingly concentrated in the biggest names. Investors pushed up the price of stocks like Tesla, Meta, Nvidia and Google, to the point where the top 10 stocks made up almost 40% of the index, and therefore the index-tracking ETFs.
The problem comes when these mega-stocks lose favor and drive the index lower, even if the other 490 companies hold their value. Index investors are experiencing this today as the top 10 stocks fell 17% this month. An index investor who needs to access their money can’t sell the stocks holding their value without selling some of the rest as well.
Integras Partners has written about excess valuations several times over the past two years, and we have an answer. Our Dividend Growth Strategy holds strong companies with solid balance sheets, high returns on capital and consistently growing dividends. As investors sell overvalued stocks, they often put their money into these types of companies with more stable growth prospects. So, there is a better solution!
Call us today to learn how we can help. 404-941-2800
Today, U.S. stocks are relatively concentrated. An investor in the S&P 500 is putting 40% of their money in the 10 largest companies. Historically, such concentration doesn’t work out well. The S&P 500 is also expensive. Such a concentrated and expensive market requires corporate earnings to continue growing unabated (to support the prices).
There is rarely economic certainty but until new government policy and the resulting economic impacts are understood, you should expect fairly big market swings. It’s been an unusually long time without a market correction (a 10% decline). One or more market corrections this year would not be surprising, so you should be thoughtful about how your portfolio is invested.
Market corrections can come and go in short order. More protracted declines take longer to develop and recover from. It isn’t so much the loss of value that has the most impact on your portfolio, and your well-being. It is the loss of time. Value will rebuild itself. The question is, do the growth assets in your portfolio have that time?
Integras Partners’ Time Horizon Investment Process can help. You can sustain your lifestyle with the money we set aside in Income Strategies, which provides the time needed for our Growth Strategies to capture the growth rewarded by volatile markets. You’re always welcome to speak with us about how we might guide you. The greatest value we can provide clients is the ability to not worry about money, and to go live life!
Call us today to learn how we can help. 404-941-2800
You’re on your financial journey and we can help people pave their own path. This quarter’s commentary blogs start with a recap of 2024 and our views of economic conditions. Then we share some of our ideas for timely investing. You’re always welcome to speak with us about how we might guide you.
2024 was a year of Artificial Intelligence and the biggest company stocks. Despite December weakness, the S&P 500 Index (a common barometer of the U.S. stock market) gained 25% for the year. However, most of this gain was isolated in the largest and most growth-oriented stocks (most of which are heavy into AI), which investors paid more and more for. Smaller companies showed some strength but faltered as concerns about Inflation prospects and continued economic growth kept coming up. Still, small cap stocks finished the year up 11%. Our robust gains were not shared by the rest of the world. And bonds provided a mild 1.3% return.
Our economy is growing at a healthy rate with low unemployment and inflation around 3%. This supports continued corporate earnings growth and possibly the quite high stock prices we have today. The near future appears primed for further growth as many U.S. consumers are getting raises, have little debt, lots of credit available and job security, all of which encourages more spending. While this all sounds supportive of another good year for markets, you must also consider risks to this view, specifically the relatively high stock prices and how further economic growth impacts inflation and interest rates.
The more an economy grows, the more demand there is for money, which increases long-term interest rates. Also, some policy initiatives voiced by the new administration (i.e. tariffs and deportation) are likely to result in higher costs for US companies. Regulatory reform and a more relaxed tax regime should boost earnings growth. Over the last 3 months, long-term interest rates have risen at almost the fastest pace ever because of these possibilities, and they could potentially go higher. Higher interest rates put downward pressure on stock prices, especially when they are already high.
With stock dividends getting taxed twice (once to the corporation and again to the shareholder), many companies are now choosing to return profits to shareholders in the form of stock buybacks instead. While there are several other reasons, the primary one is this tax-efficiency. Many of these companies do not pay a cash dividend sufficient to be included in our dividend growth strategy today. Integras Partners has historically viewed cash dividends as a sign of corporate strength, but this year we are introducing a new metric to our screening processes that includes these companies in the pool of candidates for investment.
Contact us to learn more about our strategies and how they can help you get where you are going. Call us today to learn how we can help. 404-941-2800
