Last year’s Tax Cuts and Jobs Act (TCJA) made sweeping changes to many areas of tax law for both individuals and businesses. We’ve spent a lot of time explaining these changes and how they will impact you. However, there was an important piece of the legislation we haven’t discussed yet that created a new type of investment called Qualified Opportunity Funds (QOF) that offer intriguing tax benefits. The IRS recently released further guidance on QOF’s and that has spurred additional awareness and publicity. This is still a new area of tax law and there are open questions on certain aspects of the legislation, but here is what we know now.

We are pleased to announce two new staff members at the firm who started in October. As our firm grows and we continue to expand the ways we serve our clients, Joey and Julia will be an important part of the L.K. Benson & Company team!

The recent doubling of the federal estate tax exemption under the Tax Cut and Jobs Act (TCJA) was just the latest in a series of increases over the past 20 years. The exemption is now over $11 million per person, rising from just $600k back in 1997. With the federal exemption set at such a high level, many people feel they don’t need to worry about “estate planning”. After all, if their “estate” is below that $11.18 million level ($22.36 million for married couples), they don’t have to worry about paying any estate tax, so why worry about planning?

The third quarter was yet another strong one in the markets, particularly for U.S. stocks. The S&P 500 returned close to 8% on the quarter and is now up over 10% for the year. Small cap stocks didn’t fare quite as well this quarter with the Russell 2000 index finishing up 3.5%, but they are up 11.5% year to date. International stocks bounced back a little bit with a positive 1% return and are only down about 1% on the year now, as measured by the MSCI EAFE index. Emerging Markets stocks continued to trail all other stock categories with a 1% decline and they are down over 7% on the year.

We recently went through a major software transition that allows us to present investment performance reporting to our clients on a daily basis, as opposed to quarterly as we had done in the past. The reason for the upgrade wasn’t so that clients could check their portfolio every day, in fact this is a behavior that we try hard to discourage among our clients. However, we found that quarterly performance reports put too much focus on a specific time period with a set ending date every 3 months.

How you are going to spend your time in retirement is just as important a question as how you are going to pay for it. What will the role of “work” be going forward? Work should be defined as engagement that brings value to others and meaning to you. It is important to have enough purpose in your life to wake up in the morning and enough money to sleep at night.