Perhaps both traditional and Roth IRAs can play a part in your retirement plans.
The latest midterm election results point to a change in political party control in Washington, driven by how voters feel about the economy. Democrats have won control of both the House and Senate, reversing the Republican majorities in Congress. This sets up a divided government for the remaining two years of President Trump’s term.
The stock market experienced volatility in October amid strong year-to-date gains. Major indices delivered mixed results for the month, driven by declines in technology stocks. At the same time, the bond market experienced gains in many areas as long-term interest rates pulled back from their recent highs. Overall, these moves were driven by investors reassessing trends around artificial intelligence, interest rates, the Federal Reserve, and more.
As the midterm election season unfolds, investors are keeping a close eye on the outcome due to the implications for Congressional control. Current forecasts suggest that a divided government is the most likely scenario, since Republicans hold slim majorities in both the House and Senate.1 Although a shift in party control would represent a change from the past two years, these situations are common and tend to occur during midterm election cycles.
The annual Social Security cost-of-living adjustment (COLA) is one of the most important developments for retirees and consumers. Not only does it affect Social Security recipients directly since it determines the increase in benefits next year, but it also reflects the broader inflationary trends affecting all consumers and investors. This is especially important today as inflation continues to add pressure to many households.
Even the healthiest seed will struggle if it is planted in the wrong type of soil. Investments can work the same way since some assets benefit from being placed in specific vehicles, particularly when it comes to how they are taxed. This idea is often referred to as “asset location,” which doesn’t refer to where assets are held geographically. Instead, it is the practice of placing each investment in the account type where it can grow most efficiently. This might include a taxable brokerage account, a tax-deferred account like a traditional IRA or 401(k), or a tax-free account like a Roth IRA.
