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Frederick,MD 21701

Financially Speaking

From Shabri

Planning and Management are the core tenants of what we do at Moore Wealth—-specifically Financial Planning and Wealth Management. This includes family wealth management, business planning, retirement planning, investing, tax mitigation, estate planning, intergenerational
wealth transfers, charitable giving, divorce planning, education planning etc.

One component of these processes, investing, has been the focus of considerable discussion over the past year. While we cannot control the direction that markets move, we can control how we build and manage your financial plan. Having a team who partners with you to develop a clear process and provide ongoing support by consistently updating the plan is key to
achieving your financial goals.

Our professional guidance doesn’t end with technical advice.  In fact, we believe that behavioral finance guidance and support are of equal importance.  For example, the natural inclination is to avoid risky situations, especially during volatile times in the market. This can lead to making impulsive and rash decisions. Research has shown that maintaining a disciplined investment strategy provides better outcomes versus reacting to market conditions.

We realize that sometimes it is helpful to just talk.  Please know that we are available and happy to jump on a phone call or Zoom if you’d like to discuss anything.

In this quarter’s newsletter you will find Erik’s article “SECURE Act 2.0”, Sean’s article “$1 Million Retirement – What’s in a Number?” and our quarterly market update.  We wish you a happy, healthy and prosperous new year!


Your Portfolio

Quarter Ending December 31, 2022

From Sean Moore

$1 Million Retirement – What’s in a Number?

When thinking ahead to your retirement, it’s important to have goals and plans in mind. What do you want to do with your time? What will you need to take care of (even if you don’t want to take care of it)? What preparations will you need to have made in order to meet your needs, and to enjoy the retirement you have earned?

Recently, the Wall Street Journal published an article titled “Here’s What $1 Million Retirement Looks Like in America.” (If you don’t have a Wall Street Journal subscription, and you would like to read it, please send me an email – I’m happy to send a gift link your way!) For the article, the authors interviewed several people from across the country, all of whom have roughly $1 million in retirement savings. The interviewees were profiled, and aside from the commonality of their retirement account balance, a common thread stood out to me: none of these people are living excessive or outlandish lifestyles. In fact, their annual spending was remarkably similar – an average of roughly $60,000.

There is a long-held belief – for many the number is an explicit goal – that having $1 million available to fund your retirement is not only comfortable, but potentially extravagant.  This holds true even in the Baltimore/Washington metro area, where the cost of living is consistently among the highest in the country. For reference, an “adequate standard of living,” (read: at or slightly below average) as defined by the Economic Policy Institute, for two adults in the Washington, D.C. metro area runs roughly $65,000 per year (https://www.epi.org/resources/budget/).

What does $1 million of retirement savings really mean? It can mean the flexibility to accommodate needs, and provide for wants. It can mean a sufficient cushion to provide flexibility when the unexpected – whatever form that might take – strikes. What it does not mean is an ability to be undisciplined or without a strategy.

Many are familiar with the “4% withdrawal rule,” wherein you should plan to withdraw no more than 4% of your retirement savings in any year to ensure that it will last your lifetime. While this is a handy rule of thumb, it doesn’t account for the nuances of real life, and it certainly doesn’t leverage strategy or planning – complex or simple. Strategies like optimizing the timing of Social Security benefits, or reducing taxes by planning withdrawals from a tax diversified portfolio, can do far better than a rule of thumb, and will help to avoid feelings of stress and uncertainty. 

So, what’s in a number? At the end of the day – particularly when it comes to your retirement -it’s a matter of perspective and planning. While deciding to save $1 million for your retirement can be a great goal, the real work is ensuring that you have set appropriate goals, and that you have strategies in place to achieve them, even when everything doesn’t line up just right.

If you’re feeling unsure about your retirement plans, or want to have someone check your numbers, get in touch. We’re happy to help


Quarter Ending December 31, 2022

From Erik Moore

SECURE Act 2.0
What’s Changed This Time Around

In December of 2019, Congress passed the SECURE (Setting Every Retirement Up for Retirement Enhancement) Act, which became law on January 1, 2020 – a previous newsletter of ours detailed the changes laid out in that piece of legislation.  As of January 1, 2023, the SECURE Act 2.0 was enacted, creating a number of new changes to various aspects of retirement law.  SECURE 2.0 covers a lot, so I’ve broken down the key changes within each major aspect of retirement law below: 

Required Minimum Distributions (RMDs)

In the first part of the SECURE Act, the age that RMDs began for pre-tax retirement accounts was raised from 70 ½ to 72.  SECURE 2.0 raises that age to 73 for those born between 1951 and 1960, and then further raises it to age 75 for those born after 1960.  As a side note, this creates an interesting situation in 2023, as it will be a year where no one will need to begin taking RMDs.  Since those born in 1951 will be turning 72 this year, and the RMD age has increased to 73 as of January 1, there will be no new people hitting RMD age this year.

While the RMD age has been increased again, the age at which Qualified Charitable Contributions (QCDs) can begin has remained at 70 ½.  QCDs are direct contributions to charities from a pre-tax IRA.  QCDs allow for reduction of RMDs in a given year without incurring tax liability, but obviously, those dollars must go to charity.  With QCDs still being allowed at 70 ½, one can reduce their IRA value before RMDs begin, thereby reducing their RMDs and annual tax liability.  The annual QCD amount will also be indexed to inflation going
forward, rather than being capped at $100k per year.

Along with the increase in the RMD age, the penalty for missing an RMD has also been reduced from 50% to 25%.  To clarify, if an RMD isn’t taken in a given year, there was a penalty assessed equal to 50% of the total RMD, and then the RMD still needed to be taken. That penalty has now been dropped to 25%, and a correction window has also been established. The correction window allows for one to reduce the 25% penalty to 10%, as long as the mistake is rectified before the first of three dates: the date the Notice of Deficiency is mailed to the tax payer, when the tax is assessed by the IRS, or the last day of the second tax year after the tax is imposed.  A number of the details associated with the correction window are still being determined from the language of the law, so we realize it is a little confusing at this point.  The real takeaway from the correction window is that any mistakes associated with RMDs should be remedied as soon as possible to reduce any potential penalties.

Another change, though less common, is the elimination of RMDs from Roth 401(k),Roth 403(b), and Roth 457(b) plans beginning in 2024.  For Roth IRAs there have never been RMDs, and there was a fair amount of confusion as to why employer sponsored plans with Roth features did have RMDS, so this piece is more of a way to even out policy than anything else.

Catch Up Contributions

Employer sponsored plans and IRAs allow extra contributions above the annual deferral limit for those who are over the age of 50 known as catch up contributions.

For 2022, the catch up contribution for a Traditional IRA was $1000, which is also what it has been for the past 15 years.  Starting in 2024 it will be adjusted for inflation, and will increase in $100 annual increments as dictated by the prior year’s inflation.

For employer sponsored plans (401(k)s, 403(b)s, etc.), the catch up contribution for 2022 was $6500.  This catch up amount has already been progressively increased with inflation, but there are some changes that will take place as of 2025 for those who are aged 60, 61, 62, and 63.  Beginning in 2025, the catch up contribution for individuals between 60 and 64 participating in an employer sponsored plan will be the greater of $10,000, or 150% of the regular catch up contribution of the prior year.


While there has been many discussions regarding the elimination of certain types o Roth IRA conversions, SECURE 2.0 doesn’t do away with any of the methods currently available for Roth conversions. On the contrary, it adds a new type of Roth conversion: the 529 to Roth transfer.

Currently, the dollars in a 529 plan must be used for qualified education expenses, or their distribution is taxed at the ordinary federal income tax rate, plus a 10% penalty—some states also assess a state income tax penalty.  Beginning in 2024 though, 529 dollars can be transferred to a Roth IRA in annual amounts equal to the annual deferral maximum, assuming certain criteria are met:

  1. The Roth IRA receiving the funds is in the name of the beneficiary of the 529
  2. The 529 plan has been maintained for at least 15 years
  3. Contributions from the 5 years prior to the transfer (and their earnings) cannot
    be transferred
  4. Total transfers do not exceed $35,000 in a person’s lifetime
  5. The owner of the Roth IRA has earned income in the year that the transfer

Employer Sponsored Plans

There are a lot of changes laid out SECURE 2.0 for employer sponsored plans, so what’s below is what we believe to be some of the most important pieces of the new legislation.

As of enactment, SECURE 2.0 allows for employer matching, and profit sharing, to be allocated to Roth elements of an employer sponsored plan.  As a result, the new legislation also allows the creation of Roth SIMPLE, and Roth SEP plans.  While this does create some flexibility for an employer, any employer contributions allocated to the Roth portion of a plan will be counted as income for the employee.  This section of SECURE 2.0 also creates a policy that requires catch up contributions to be allocated to the Roth portion of employer sponsored plans for high wage earners.  This part will go into effect in 2024, and as of now, will be applicable to those who have wages in excess of $145,000—this amount will be adjusted for inflation going forward.

Beginning in 2024, employers will be able to amend their plans to allow for matching contributions to go towards employees student loan repayments.  The vesting and matching schedule must remain the same as normal salary deferrals.

Beginning in 2025, many new 401(k)s or 403(b)s will be required to have auto enrollment as part of their plan.  There are a lot of exemptions to this rule however.

As of this year (2023), employers with 50 or less employees will be able to claim a credit equivalent to 100% of the start-up costs of the plan.  Prior to this year, there was a maximum credit of 50%.  For such employers, there is also the ability to claim further credits towards employer contributions in the first 4 years of the plan.

Through the end of 2022, employees had to be eligible to participate in a plan if they had worked at least 1000 hours in the past year.  Beginning in 2024, this changes to include employees who have been employed for at least 3 years, and have worked at least 500 hours in each of those years. As of 2025 it becomes at least 2 years of employment, with at least 500 hours in each of those years.

Apart from the pieces described above, there are also myriad additions to the functionality of SEP and SIMPLE plans, as well as when hardship distributions can be obtained.

A lot of the language in the SECURE Act 2.0 is still being parsed, so there may be further large implications to everything that is laid out in this article.  While it does not seem as if there are any new restrictions imposed as a result of the new legislation, things are still subject to change. As with anything else, it’s important to consult your financial advisor and CPA to determine how any of these changes may affect you, and if there are opportunities to take advantage of. If you are currently in need of a financial advisor, or could use a second opinion, feel free to contact us at Moore Wealth.  We’re more than happy to provide a second set of eyes for your financial plan.


Quarter Ending December 31, 2022

Market Update for the Quarter Ending

December 31, 2022

Market Update for the Quarter Ending December 31, 2022

December Sell-Off Caps Turbulent Year

Markets sold off in December, contributing to mixed results for the quarter and declines for 2022. The S&P 500 lost 5.76 percent during the month, gained 7.56 percent for the quarter, and lost 18.11 percent for the year. Dow Jones Industrial Average (DJIA) declined 4.09 percent in December, gained 16.01 percent for the quarter, and lost 6.86 percent for the year. The Nasdaq Composite lost 8.67 percent in December, declined 0.79 percent decline for the quarter, and lost 32.54 percent for the year.

Per Bloomberg Intelligence, as of December 30, 2022, with 99 percent of companies having reported actual earnings, the blended earnings growth rate for the S&P 500 in the third quarter was 4.6 percent, up from estimates for a 2.6 percent increase. Better-than-expected earnings growth in the first and second quarters of 2022 shows businesses continued to successfully operate despite economic headwinds.

The S&P 500 ended the year below its 200-day moving average, as the year-end sell-off brought the index below trend after a brief stint above trend at the end of November and start of December. The DJIA finished December above trend  marking three consecutive months with technical support for the index—but the Nasdaq Composite ended the month below trend. Mixed technical indicators at the end of 2022 indicate uncertainty for equity investors to start 2023.

International markets were mixed in December, but results were similar to the U.S. on a quarterly and annual basis. The MSCI EAFE Index gained 0.08 percent in December, capping off a 17.34 percent return for the quarter. Developed international equities ended the year down 14.45 percent. The MSCI Emerging Markets Index lost 1.35 percent during the month, gained 9.79 percent for the quarter, and dropped 19.74 percent for the year.

Technicals were mixed for international markets to end the year. The MSCI EAFE Index finished the month above its 200-day moving average, which marked two consecutive months finishing above trend. The MSCI Emerging Markets Index, on the other hand, ended December below trend, marking 18 consecutive months with the index finishing below its 200-day moving average.

Fixed income markets also experienced declines in December and for the year. The 10-year U.S. Treasury yield rose from 1.63 percent to 3.88 percent by year-end. The 1-year U.S. Treasury yield surged from 0.4 percent at the start of 2022 to 4.73 percent at year-end. The rise in yields was primarily due to higher rates from the Federal Reserve (Fed) as the central bank hiked the federal funds rate 4.25 percent in 2022 to combat inflation.

The Bloomberg U.S. Aggregate Bond Index dropped 0.45 percent during the month, notched a 1.87 percent gain for the quarter, and lost 13.01 percent in 2022. The Bloomberg U.S. Corporate High Yield Bond Index saw a 0.62 percent decline for the month, a 4.17 percent gain for the quarter, and an 11.19 percent decline for the year. High-yield credit spreads widened notably last year, increasing from 3.05 percent at the start of 2022 to 4.81 percent at year-end.

Economic Updates Remain Positive

The labor market saw signs of surprising strength toward the end of the year, as the November employment report revealed 263,000 jobs added against calls for 200,000. The unemployment rate ended November at 3.7 percent, which was down from the start of the year. 

Personal income and spending rose in November for the fourth consecutive month. Consumer spending growth was relatively consistent last year, supported by Covid-19 pandemic-era savings and a strong labor market. Core durable goods orders rose in November following a solid jump in October, indicating that businesses continued to spend and invest to meet high levels of demand toward year-end. Consumer and service sector confidence also showed improvements toward the end of the year.

Housing Continues to Slow

Not all economic news for 2022 was positive as the housing sector showed signs of continued slowdown at year-end. After serving as a bright spot in 2020 and 2021, the housing sector slowed in 2022 due to low supply of homes for sale, high prices, and rising mortgage rates. As shown in Figure 1, the pace of existing home sales fell in November to its lowest level since the lockdown-induced nadir in May 2020.

Figure 1. Existing Home Sales, Seasonably Adjusted Annualized Rate, 2017-Present

Source: National Association of Realtors/Bloomberg

The average 30-year mortgage started 2022 at 3.3 percent and hit a high of 7.35 percent in November before ending the year at 6.66 percent. While there were signs at year-end that housing price growth has started to fall—and in some cases even turn over—the housing sector is expected to experience ongoing, short-term slowing growth as high rates and prices serve as a headwind for prospective home buyers.

Inflation Slowing but Risks Remain

A major market and economic risk last year was high inflation. The Fed responded by hiking rates and tightening monetary policy throughout 2022, which caused sell-offs across equity and fixed income markets. The worst might be behind us, but inflation stayed high on a year-over-year basis.

While markets continue to price in slighter higher short-term yields in the first half of this year, expectations call for looser policy toward year-end. This could lead to additional market volatility if these expectations aren’t met, so the Fed and inflation bear monitoring in 2023. Political risks are set to take center stage as last year’s midterm elections led to a split federal government. It’s likely we’ll be reading about debt ceiling debates and a potential government shutdown at some point this year.

Abroad, the main risks to start the new year are the ongoing Russia-Ukraine war and the slow reopening of China as the country eases Covid-19 restrictions. The Ukraine war’s impact on markets declined toward the end of 2022, but continued conflict could lead to further uncertainty. China’s reopening efforts are widely viewed as a positive development for the global economy following months of lockdowns. The country could be a source of additional uncertainty if medical risks rise.

We enter 2023 with a relatively positive backdrop. While risks remain, economic fundamentals are solid, and market valuations are more attractive now than they were at the start of 2022. Given the potential for further short-term uncertainty, a well-diversified portfolio that matches investor goals with timelines is the best path forward for most. If you have questions or concerns, you should reach out to your financial advisor to discuss your financial plans.

All information according to Bloomberg, unless stated otherwise.

Moore Wealth

Quarter Ending December 31, 2022

Disclosure: Certain sections of this commentary contain forward-looking statements based on our reasonable expectations, estimates, projections, and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Past performance is not indicative of future results. Diversification does not assure a profit or protect against loss in declining markets. All indices are unmanaged and investors cannot invest directly into an index. The Dow Jones Industrial Average is a price-weighted average of 30 actively traded blue-chip stocks. The S&P 500 Index is a broad-based measurement of changes in stock market conditions based on the average performance of 500 widely held common stocks. The Nasdaq Composite Index measures the performance of all issues listed in the Nasdaq Stock Market, except for rights, warrants, units, and convertible debentures. The MSCI EAFE Index is a float-adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a market capitalization-weighted index composed of companies representative of the market structure of 26 emerging market countries in Europe, Latin America, and the Pacific Basin. It excludes closed markets and those shares in otherwise free markets that are not purchasable by foreigners. The Bloomberg Aggregate Bond Index is an unmanaged market value-weighted index representing securities that are SEC-registered, taxable, and dollar-denominated. It covers the U.S. investment-grade fixed-rate bond market, with index components for a combination of the Bloomberg government and corporate securities, mortgage-backed pass-through securities, and asset-backed securities. The Bloomberg U.S. Corporate High Yield Index covers the USD-denominated, non-investment-grade, fixed-rate, taxable corporate bond market. Securities are classified as high-yield if the middle rating of Moody’s, Fitch, and S&P is Ba1/BB+/BB+ or below.

Moore Wealth is located at 50 Carroll Creek Way, Suite 335, Frederick, MD 21701 and can be reached at 301.631.1207. Securities and Advisory Services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Advisor.

Advisory Services offered through Commonwealth FinancialNetwork®, a Registered Investment Advisor.

Authored by Brad McMillan, CFA®, CAIA, MAI, managing principal, chief investment officer, and Sam Millette, manager, fixed income, at Commonwealth Financial Network®.

© 2023 Commonwealth Financial Network®