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Michael M. McDonough, RICP®, AIF®, CPA (inactive), Author at Michael M. McDonough, Inc.
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Author: Michael M. McDonough, RICP®, AIF®, CPA (inactive)

Should the 'luck of the draw' bring poor market performance early in retirement, your assets could take a hit from which you cannot recover. The market's recuperative abilities and upward bias "over longer periods" is of little comfort to those with unfortunate retirement timing. Mitigating this “sequence of returns risk” can be the difference between running out of money and never having to worry. https://lnkd.in/dw2W5cJ ...

Good news.  The most sweeping tax code overhaul in decades, the Tax Cuts and Jobs Act of 2017 (TCJA), likely just reduced the tax on your business income. It features dramatically reduced income tax rates for C Corporations (tax paying entities) via a new 21% flat rate.  Yet most of the small businesses in the US are tax-conduits rather than C corps, which means rather than business income being taxed to the entity, it flows through to the owners' personal tax returns...

The fourth quarter is off to a rough start, as volatility has come storming back. October saw the S&P 500 Index drop by 6.8%, its biggest monthly decline in five years, and November is experiencing additional carnage as recapped here.   Quarter-To-Date Year-To-Date S&P 500  -9.7  -1.5% Nasdaq Composite  -13.8% +.5% Russell 2000  -12.3% -3.1% How can this be when Q3 corporate results were excellent overall, as seen in S&P 500 companies growing sales by 11%, and earnings by nearly 30% on profit margin expansion to all-time highs...

Timing risk amplifies investment risk for those in the Retirement Red Zone, who are inherently in a precarious position in any market environment. The actual order and timing of returns has an outsized effect on portfolio value closer to retirement when wealth is at its apex. Meanwhile, anticipating and mitigating macro risks appear to be getting more difficult as the rate of change accelerates and the range of potential outcomes expands. Caveat...

Professional service firms valuing continuity as strategic advantage are increasingly financing, out of their own pockets, nonqualified defined benefit pension style programs. Building a retention benefit in a transparent and tax-efficient manner formalizes partners' decisions to become part of an enduring economic engine....

An abrupt, one-day rise in the 10-year Treasury yield early in 2018 caused a sudden volatility surge in a market enjoying an extended period of atypically low volatility. This reiterated some important investment lessons, such as the importance of liquidity – both in macroeconomic terms and personally, as a fundamental investment consideration. This article features timeless takeaways for younger investors, those entering – or in – The Retirement Red Zone, and both cohorts....

You may not appreciate the clear, if not yet present, threat to your retirement and/or legacy plans a long-term care (LTC) event could pose. Medicare does not cover LTC, Medicaid assistance is reserved for the indigent, and a plan to self-fund requires an 'eyes wide open' mentality rather than comprising a delusional cop out. Burdening loved ones to provide care is sub-optimal on many levels. Transferring the risk to a commercial insurer can...

Risks from increasing longevity, investment performance, and 'lower-for-longer' interest rates can cause pension plan funding status to deteriorate abruptly. These and other factors have plan sponsors looking to 'exit the pension business' either via lump sums to participants or by transferring the liabilities to a responsible commercial insurer. My team is helping reduce both cost and risk to pension plans, Trustees, and valued participants....

Income planning is at the core of retirement planning, and retirees are looking for a reliable process to recreate a paycheck. My deep dive into the tools, tactics and processes of retirement income planning can guide you through healthcare, housing and lifestyle choices, implications for aging, while helping avoid mistakes, and drawing upon research-based approaches for monetizing assets over a retirement horizon of unknown duration....