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Craig Lundquist, MBA, ChFC®, CRPC®
VP of Wealth Management
651-773-2757
Kristin Becker
Senior Administrative Assistant
651-773-2821
Ideal Wealth Advisors
Located at Ideal Credit Union
8499 Tamarack Road
Woodbury, MN 55125
CRPC conferred by College for Financial Planning
September/October 2024
Investing Moves to Consider This Fall
Is your portfolio in line with your ability to tolerate risk? As we begin fall, there are some end-of-year investing moves that can help tune-up your holdings.
Harvest Losses
Generally, capital gains on investments you have owned for less than 12 months are taxed at your ordinary income tax rate, which may be as high as 37%. Loss harvesting concentrates on net profits. This strategy entails selling an investment at a loss to offset taxes on gains generated by more profitable investments.Here’s a hypothetical example,* say you have $10,000 in gains on a short-term investment and $6,000 in losses in another investment you plan to sell anyway. If you sell the second investment, you only incur tax on the $4,000 gain on the profitable investment that’s not offset. What’s more, if your losses exceed your gains, you can deduct up to $3,000 in net losses from your total 2024 income.
Rebalance Your Portfolio
The bullish stock market in 2024 may have given your portfolio a heavier weighting in growth investments than your risk tolerance can bear. It’s time to look at rebalancing. Consider selling some of your overperforming securities and reinvesting the proceeds in fixed-income investments to potentially reduce your portfolio risk.**Top Up Tax-efficient Accounts
For instance, if you expect a year-end bonus and haven’t already contributed the maximum amounts to your tax-advantaged retirement accounts, consider using some or all of your bonus to do that. The maximum contribution to a 401(k) plan in 2024 is $23,000, or $30,500 for those 50 and older. IRA limits are $7,000/$8,000.72% OF NEW INVESTORS PLAN TO INVEST IN STOCKS. HOWEVER, MANY FIRST-TIME INVESTORS FALSELY ASSOCIATE THE STOCK MARKET WITH SHORT-TERM INVESTING.
Healthcare and college savings accounts may offer tax-advantaged options for year-end tax planning. If your business has a flexible spending account, you may be able to increase your contribution. Do you have a high-deductible medical plan? Fund a health savings account. The maximum contribution for an HSA in 2024 is $4,150 for an individual and $8,300 for a family. Touch base with your trusted tax and financial professionals about tax-advantaged college savings plans and other tax strategies before implementing them.
*Your situation and results may vary.
**Rebalancing a portfolio may create a taxable event if done outside of a retirement account, and asset allocation doesn’t guarantee a profit or protect against a loss, but it may help reduce volatility.
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Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Ideal Credit Union and Ideal Wealth Advisors are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using Ideal Wealth Advisors, and may also be employees of Ideal Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of Ideal Credit Union or Ideal Wealth Advisors. Securities and insurance offered through LPL or its affiliates are:
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