March Madness Lessons

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Going into March Madness and selecting your bracket, there’s a few things to think about.

We all need a “Coach”

Great coaches excel in providing leadership, instilling confidence, and leveraging their team members' strengths and natural talents. While players execute moves on the court, it's the coach who devises and implements strategies to guide the team effectively.

Maintaining adherence to a plan poses challenges, especially when players face pressure from fans and sports writers to deliver standout performances. Hence, one of the paramount qualities of a competent coach is the ability to foster a trust-based relationship. Without trust, even the most well-crafted plan risks being disregarded.

Similar principles apply to your financial plan. There are many key players such as your advisor, investment manager, and financial services associate. The finest among them work together to assist their clients in maintaining confidence in their goal attainment, even amidst short-term market fluctuations that may suggest otherwise.

Should you rely on guess-work?

The idea behind March Madness — and much of the fun — is predicting how the tournament will unfold and which team will emerge as the winner. You can analyze past performances, or study point differentials, first round win percentages, and any number of other metrics. Ultimately, it’s a guessing game. The same holds true for the market.

Investors employ everything from past pricing history to sophisticated software in their quest to choose the big market winners. Your advisor, however, knows the goal isn’t predicting the next maven. It’s building and managing an investment portfolio that can address your specific goals, for you to live your life of abundance.

Picking the NCAA tournament champion may win you bragging rights or a few bucks from the office pool. But a financial professional's personalized guidance and focus on your long-range financial plan is what can get you working towards a winning investment strategy.

Facts over feelings 
Emotion-driven decisions can shadow both March Madness and investment markets. When there are fluctuations within the markets, investors receive heightened emotional responses. The NCAA tournament's drama mirrors market fluctuations, with intense moments and unexpected outcomes capturing attention. While the thrill of March Madness fades after the championship, emotional investment decisions can have lasting financial consequences. Financial advisors offer relief from daily market stress, guiding investors away from impulsive choices that deviate from their plans.

In both bracket predictions and investing, facts must outweigh feelings. Wishful thinking can often cloud your decision-making, leading to undesirable outcomes. Whether picking a tournament winner based on alma mater pride or following the crowd in investment trends, emotions can affect your judgment. Guidance from your advisor offers a rational approach, utilizing research and expertise. Your advisor is there to help you navigate complex financial landscapes with your best interests in mind.

Individual investors who depend solely on themselves face the potential of succumbing to emotional pitfalls similar to those experienced in March Madness brackets. In contrast, your Gilbert & Cook team can prioritize factual analysis over impulsive decisions, dissuading from following herd mentalities or emotional biases. By adopting a disciplined, evidence-based strategy, investors can minimize risks and effectively pursue long-term financial objectives under the guidance of your advisor.

Everyone can relate to a come-back

Of course, we do love to see an underdog win. The problem with that is underdog successes aren’t that common in the later rounds of the NCAA tournament. Remember that when you pick those teams for your bracket.

The same can be said for investing. It may be fun to select the under-dog investments, but they generally involve an increased level of risk. Work with your Gilbert & Cook Advisor to assess your risk tolerance. Assess this each year to keep you dialed into your goals.

Your financial well-being is no game

Regardless of who you pick to “take it all” for March Madness, life returns to normal the following day —no matter the outcome of the tournament. That championship game is just that: a game. That’s not the case with your financial well-being, it’s your future.

You really can’t do much to increase the odds of a perfect March Madness bracket. You can improve your chances of achieving your financial goals by working with your advisor to put together a thought-out plan to help get you on the winning path, to live a life of abundance®.

Gilbert & Cook is an SEC registered investment adviser.  SEC registration does not constitute an endorsement of Gilbert & Cook by the SEC nor does it indicate that Gilbert & Cook has attained a particular level of skill or ability.  This material prepared by Gilbert & Cook is for informational purposes only.  It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product.  Economies and markets fluctuate.  Actual economic or market events may turn out differently than anticipated.  Gilbert & Cook does not provide tax or legal advice, and nothing contained in these materials should be taken as tax or legal advice.  Past performance is no guarantee of future results.

Date Night 2.0

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Date Night 2.0

Valentine's Day can prompt the importance of diversification, both in matters of love and finance. Whether partnered or single, engaging in a financial date night is a wise choice.

Upon entering the dining room, you are greeted by the delicate scent of a meticulously arranged floral centerpiece. Adjacent to a glass of your favorite wine rests an open box of finely curated chocolates. Held in hand are the freshly printed bank statements, signaling the commencement of a romantic financial date night.

Transparency and open communication are vital during these discussions with oneself and one's partner regarding finances. Initiate the conversation by posing thoughtful questions about financial objectives, aspirations, and apprehensions. This exchange cultivates and strengthens the bond between partners as they align their financial visions. Together you want to pursue common objectives, fostering a deeper understanding of oneself in the process.

Questions to Consider:

  • What is your current sentiment toward your financial situation?

  • Does your current financial status align with your initial expectations?

  • What factors contribute to financial stress in your life?

The objective of the financial date night is to explore how financial resources can be optimized to facilitate a life of abundance.

Assessment of Account Balances:
Focus on the present state of finances without dwelling on past circumstances. Compile a brief overview of current account balances, including relevant account details and authentication requirements.

Savings Evaluation:
Determine your savings rate by considering anticipated earnings over the fiscal year. Assess contributions to retirement plans such as 401(k), 457, or IRA accounts, emphasizing simplicity in analysis.

Cash Flow Analysis:
Understand your net income and fixed expenses. Calculate the ratio of fixed expenses to net income, aiming for fixed expenses to remain below 60% of net income.

Goal Setting:
Having laid the groundwork, delineate a strategic direction for the future. Reflect on successes and areas necessitating adjustment to refine financial objectives.

Embracing a financial date night can strengthen your relationship surrounding your finances. Consider the benefits and feel free to make it fun. Cheers to health, love, and a life of abundance!

Preparing for Year End

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Ready for 2024?

As the end of the 2023 approaches, we want to be reminded of last-minute items we need to finalize and the goals we want to complete. Here are some of those year-end items you may want to look over and review with your Gilbert & Cook Advisor.

Annual Exclusion Planning
Plan contributions to education accounts and make any desired cash gifts to family members. The annual federal gift tax exclusion allows you to give away up to $17,000 in 2023, meaning you can gift as much as $17,000 to as many individuals as you like this year. Such gifts do not count against the lifetime estate tax exemption amount as long as they stay beneath the annual federal gift tax exclusion threshold.

The end of the year is also a good time to review any trusts you have in place. Using a trust involves a complex set of tax rules and regulations. Before moving forward with a trust, consider working with a professional who is familiar with the rules and regulations.

Charitable Giving
Individuals can donate cash, appreciated stock, or make donations via a qualified charitable distribution if they are 70 1/2 years old or older. A qualified charitable distribution is a distribution from your Individual Retirement Account (IRA) that can be excluded from income if donated to qualifying charities. The 2023 allowable amount is $100,0000 per taxpayer.

Please consult with your CPA and Advisor to determine if any of these strategies will benefit you.

Retirement strategy
If you aren't already, you may want to consider contributing the maximum to your retirement accounts and review any existing retirement accounts with your employer. If you are eligible to make any catch-up contributions, it may be a great time to also consider making that decision.
2023 limits for individuals:

  • $22,500 for 401(k) with $7,500 catch-up provision for individuals 50 and over.

  • $15,500 SIMPLE plans with $3,500 catch-up contribution for individuals 50 and over.

  • $6,500 Roth IRA / IRA contribution; $1,000 catch-up contribution for individuals 50 and over. 1

Taxes
It's a good idea to consider checking in with your tax or legal professional before year end to discuss questions regarding large expenses or deductions. Think about any sales of property as well as both realized and unrealized losses and gains. Your Gilbert & Cook Advisor can work alongside your tax or legal professional to help provide this information and to also help plan for 2024.

Life Events
Here are some questions to ask yourself when evaluating any large life changes in the last year:
Did you happen to get married or divorced this year?
Did you move or change jobs?
Did you buy a home or business?
Was there a new addition to your family this year?
Did you receive an inheritance or a gift?

All these circumstances can have a financial impact on your life as well as the way you invest and plan for retirement and wind down your career or business. As always, your Gilbert & Cook team is here for you. Please talk to your Advisor if you have any questions regarding your financial situation.

Sources
1. IRS.gov, August 2023

Gilbert & Cook, Inc. is a Registered Investment Adviser. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the adviser has attained a particular level of skill or ability. This Newsletter is meant for informational purposes only. Advisory services are only offered to clients or prospective clients where Gilbert & Cook, Inc. and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Gilbert & Cook, Inc. unless a client services agreement is in place. Gilbert & Cook, Inc. does not offer tax or legal advice. Consult with an attorney for legal advice and a qualified tax professional for tax advice.

Medicare Open Enrollment

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Medicare
Open Enrollment

Runs through December 7th
By: Wendy Stenberg, Advisor

Healthcare needs are an important part of any financial plan. Choosing a plan that best suits your health, lifestyle and budget can have a significant impact on your near-term and long-term health and financial well-being.

Is it time for a Medicare coverage checkup? 
With multiple options available, choosing the best plan can be difficult and daunting. If you ever ask yourself if you are in the right plan or getting the coverage that best suits your health and lifestyle, you may want to have a professional evaluate your current coverage. At Gilbert and Cook, we partner with local Medicare specialists who will meet with you in person to review your existing coverage and either make recommendations for changes or confirm you’re in the most appropriate plan.

The annual Medicare Open Enrollment Period is the time when people with Medicare can review their current coverage and make changes to their Medicare Advantage (Part C) or Medicare prescription drug coverage (Part D) plans. Medicare Open Enrollment runs from October 15 to December 7 each year. During this time, you can:

  • Switch from one Medicare Advantage plan to another

  • Switch from Medicare Advantage to Original Medicare

  • Join a Medicare Advantage plan for the first time

  • Switch from one Medicare Part D plan to another

  • Join a Medicare Part D plan for the first time

Additional resources that can be helpful are the official Medicare website, and the State Health Insurance Assistance Programs (SHIPs) website.

What to Consider When Choosing a Medicare Advantage or Supplemental Plan
There are several factors to consider when choosing a Medicare Advantage or supplemental plan, such as:

  • Your budget: Medicare Advantage and supplemental plan premiums can vary significantly, so it's important to find a plan that fits your budget.

  • Your health needs: If you have certain health conditions, you may want to choose a plan that covers those conditions.

  • Your preferences: Some plans offer additional benefits, such as coverage for foreign travel or preventive care.

Additional Considerations for Medicare Advantage Plans

  • Network of providers: Many Medicare Advantage plans have a network of providers, which can help you save money on your care. Consider whether your preferred doctors and hospitals are in the plan's network.

  • Prior authorization: Some Medicare Advantage plans require prior authorization for certain services, which means that you may need to get approval from your plan before you can get certain services.

Additional Considerations for Medicare Supplement Plans

  • Standardized plans: Medicare Supplement plans are standardized, which means that they must offer the same basic benefits, regardless of which insurance company you buy them from. This makes it easier to compare plans and find the one that's right for you.

  • Guaranteed issue rights: You have certain guaranteed issue rights when you buy a Medicare Supplement plan. This means that you cannot be denied coverage or charged a higher premium based on your health status.

How to Compare Medicare Advantage and Supplemental Plans

In addition to having an in-person appointment with a local Medicare specialist you can compare Medicare Advantage and supplemental plans online or by calling your State Health Insurance Assistance Program (SHIP). You can also use the Medicare Plan Finder tool on Medicare.gov to compare plans.

Please reach out to your Gilbert and Cook Advisor for more information. 

Gilbert & Cook, Inc. is a Registered Investment Adviser. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the adviser has attained a particular level of skill or ability. This Newsletter is meant for informational purposes only. Advisory services are only offered to clients or prospective clients where Gilbert & Cook, Inc. and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Gilbert & Cook, Inc. unless a client services agreement is in place. Gilbert & Cook, Inc. does not offer tax or legal advice. Consult with an attorney for legal advice and a qualified tax professional for tax advice.

2023 Mid-Year Event - Recap

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On July 27th, 2023, Gilbert & Cook hosted a mid-year update event, hosting an interactive panelist discussion on financial headlines in the news. Our panel included Chris Cook, CPA, CFA, Chief Investment Strategist, Megan Rosenstiel, CFP®, CDFA®, AWMA®, ADPA®, LTCP​, Director of Advisory Services, and Zach Ripka, CFP®, CPA/PFS, CEPA, Planning & Tax Strategist. Let’s take a look back at some of the topics that have been hitting the headlines.

As discussed by our panelists, Megan Rosenstiel,and Zach Ripka, the sweeping legislation of the SECURE ACT 2.0 has dozens of significant provisions. These updated rules can seem cumbersome and you want to know and understand how these affect you.

First and foremost: Required Minimum Distributions
One of the most critical changes was the increase in the age at which owners of various retirement accounts MUST begin taking required minimum distributions (RMDs). Starting in 2033, RMDs must begin at age 75. If you turned age 72 before January 1, 2023, you must continue taking distributions under the prior rules. But if you are turning 72 in 2023 and have already scheduled your withdrawal, we may want to revisit your plan.

Zach went on to share how there have been revisions to the rules surrounding Roth accounts.  Starting in 2024, pending certain conditions, individuals can roll a 529 Education Savings Plan into a Roth IRA. If a child receives a scholarship, goes to a less expensive school, or doesn't go to school, the money can be repositioned into a retirement account.

Individuals will be able to roll over up to a total of $35,000 from 529 plans to a Roth IRA for the same beneficiary, provided 529 accounts have been held for at least 15 years. The annual rollover amounts will be subject to the annual Roth IRA contribution limit, but not the Roth IRA income limits. Any contributions to a 529 plan within the last 5 years (and the earnings on those contributions) are ineligible to be moved to a Roth IRA.

The new legislation aligns the rules for Roth 401(k)s and Roth 403(b)s with Roth Individual Retirement Account (IRA) rules. This means that starting in 2024, there is no longer a required minimum distribution from Roth accounts in employer retirement plans.

As it should be noted, previously, employer matching contributions were required to be deposited into each employee’s pre-tax account in the retirement plan. The new legislation allows employer matches to the Roth portion of the account for electing employees. However, this now makes any Roth Employer Match, taxable income to the employee.

Lastly, Zach went over some additional highlights that many found helpful. The maximum Qualified Charitable Distributions (QCDs) amount will start indexing for inflation in 2024. Currently, ​the maximum QCD amount is $100,000 per taxpayer. The limit applies on an individual basis, so for a married couple, each person who is at least 70½ years old can make a QCD as long as it remains under the limit (currently $100,000 per taxpayer per year). Individuals will also be able to make a one-time distribution of up to $50,000 to a charitable remainder trust or charitable gift annuity.

Our final panelist, Chris Cook, CPA, CFA, Chief Investment Strategist, gave us some insight into the current market while debunking some current headlines.

Headline: Worst Inflation in 20 Years
Reality: On a 4-yr rolling average, inflation is higher than we are used to, but not out of bounds from where we have been the last 30 years. What it is not, currently, is 1981, where the rolling, 4-year average inflation rate was nearly 11%. Inflation continues to cool and will eventually reach longer term trend levels.

In June of 2022, the Index reached the lowest point in over 50 years, indicating extreme consumer pessimism i.e. people just didn't feel good about things. However, in terms of economic data, this was not that bad of times. The unemployment rate was low, around 3.7%, and while interest rates were higher, they weren't as high as other inflationary periods in history. These low points typically represent opportunities for investors especially when economic data is positive or not as bad as we are being lead to believe in the news. Fast forward to today, with a strong stock market recovery, the outcome over the last 12 months has been consistent with previous sentiment bottoms. This is yet another reminder to stay the course as a long-term investor. The Gilbert & Cook Investment Team is constantly positioning portfolios for these opportunities and is ready to act when they arise.

Disclosure: The presentation on July 27th, 2023, was meant for informational purposes only. Services offered through Gilbert & Cook, Inc. a Registered Investment Adviser. Please note we cannot accept any type of market orders requested via email or voicemail. Advisory services are only offered to clients or prospective clients where Gilbert & Cook, Inc. and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Gilbert & Cook, Inc. unless a client service agreement is in place. Gilbert & Cook, Inc. does not offer tax or legal advice. Consult with an attorney for legal advice and a qualified tax professional for tax advice.

Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the CFP® certification mark, the CERTIFIED FINANCIAL PLANNER™ certification mark, and the CFP® certification mark (with plaque design) logo in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

Welcome Todd Henningsen

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It is with great pleasure that we introduce our newest addition
to the Gilbert & Cook team, Todd Henningsen CFA, CFP®.

At Gilbert & Cook, we take great pride in our commitment to providing our clients and their families with sophisticated strategies and genuine relationships, creating a truly unique experience. With the addition of Todd Henningsen to our team, we are confident in our ability to further enhance the exceptional service and support you have come to expect from us.

From the Cedar Valley area, Todd brings a wealth of experience and knowledge to Gilbert & Cook. He has been in the financial industry since 2009, advising clients from various backgrounds and helping them navigate complex financial landscapes. Todd's experience spans investment management, retirement planning, estate planning, and comprehensive wealth management strategies.

Active in his community, Todd is a member of the Financial Planning Association of Iowa, the CFA Society of Iowa and is the board chair of the Community Foundation of Northeast Iowa. He is a board member of the LORAL Trust and served as the past foundation chair of the Rotary club of the Cedar Valley.

Todd's passion for building strong client relationships and his commitment to delivering outstanding service align perfectly with the values and principles that Gilbert & Cook upholds. His addition to our team reinforces our dedication to excellence and ensures that we continue to provide our clients with the highest level of care.

Please join us in extending a warm welcome to Todd Henningsen as he embarks on this new chapter with Gilbert & Cook. We are thrilled to have him as part of our team and are confident that his skills and dedication will greatly contribute to empowering and enabling others to Live a Life of Abundance®.

Iowa Homestead Tax Exemption for Claimants 65 or Older

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On May 4, 2023, Iowa Governor Kim Reynolds signed House File 718 into law, bringing a new tax break for some. The new legislation establishes a homestead tax exemption for individuals aged 65 or older. Eligible claimants can now apply for the exemption through the Iowa Department of Revenue, offering potential long-term benefits. This must be done by July 1, 2023.

Eligibility Criteria and Exemption Amounts

Under the Homestead Tax Exemption, eligible claimants must be 65 years of age or older by January 1 of the assessment year and must own the home they reside in. The legislation provides two tiers of exemption amounts, depending on the assessment year.

For the assessment year starting January 1, 2023, qualified individuals are eligible for a $3,250 reduction in the taxable value of their property. Starting from January 1, 2024, the exemption amount doubles to $6,500 of taxable value. It's important to note that the exemption directly impacts the taxable value of the property rather than offering an immediate reduction in property tax payments.

 Application Process

To apply for the homestead tax exemption, interested claimants must complete the amended Homestead Tax Credit Exemption (54-028) form provided by the Iowa Department of Revenue. The deadline for submitting applications is July 1, 2023, to your local assessor's office. If the exemption is granted, claimants can enjoy the benefits in subsequent years without needing to reapply, if they continue to meet the eligibility requirements.

If you meet the eligibility criteria, make sure to submit your application before the deadline of July 1, 2023, and stay informed about any future changes or updates issued by the Iowa Department of Revenue.

Gilbert & Cook, Inc. is a Registered Investment Adviser. This Newsletter is meant for informational purposes only. Advisory services are only offered to clients or prospective clients where Gilbert & Cook, Inc. and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Gilbert & Cook, Inc. unless a client services agreement is in place. Gilbert & Cook, Inc. does not offer tax or legal advice. Consult with an attorney for legal advice and a qualified tax professional for tax advice.

As seen in Fortune & Entrepreneur Magazines

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Fortune & Entrepreneur Magazines honor Linda Cook as an Extraordinary Woman in Business!

Originally Published in February/March 2023 Issue (Original Copy)

Gilbert & Cook prepares individuals and families for life’s transitions. Empowering others to “Live a Life of Abundance.”

With all the cutting-edge technologies at their disposal, the advisors of Gilbert & Cook say their most valuable tool is their hearts.

“We listen generously and meet people where they are,” says Linda Cook, CFP®, who founded the nationally ranked private wealth management firm in 1993. “What I think is so great about meeting someone for the first time is learning about their situation and what they value most. We begin each relationship by helping our clients define what it means for them to ‘live their life of abundance’ and set priorities for their financial future.”

Gilbert & Cook’s reputation for deftly handling complicated situations makes it the firm of choice for high net worth and ultra high net worth families. Thirty years after its founding, the firm now has six partners and employs an in-house investment and planning team, creating sophisticated strategies to manage over $1 billion in assets.

The rapidly growing group of over 34 members includes advisors and analysts as well as tax and planning specialists. With a quest to grow and improve, the firm invests over $100,000 annually in continuing education for its team members, making it among the region’s most highly trained in the industry.

With significant wealth comes complexity, and it is important to have a trusted partner to help you face the tough decisions in complex situations. Gilbert & Cook advisors have become sounding boards and trusted confidantes for those selling a business, adjusting to retirement, receiving an inheritance, coping after a divorce, and experiencing other major life events.

CHOICES, CLARITY, CONFIDENCE

“We are focused on providing clarity through collaboration. We bring together different members of our team with a variety of experience and knowledge to a particular situation. We also work with CPAs, attorneys, and other professionals outside the firm,” says Linda Cook.

As an ensemble, the team at Gilbert & Cook provides clients the support they need throughout their entire financial journey. Multigenerational families with significant wealth can take advantage of the private family services available through the Gilbert & Cook Family Office. The family office provides wealth management services for families and businesses as well as lifestyle management services.

“It’s not about a product or just one solution. It’s about meeting people where they are and developing a strategy together that creates fi nancial security. We work to ensure you’re on the right track with constant monitoring, to help you live the life of abundance that you deserve.” —LINDA COOK

Gilbert & Cook is nationally recognized for excellence. It is among the few RIAs whose growth in assets qualifies it as one of “50 Growers Across America” by Citywire RIA. It has also been named among Financial Times’ Top Financial Advisors and was the winner of a Best Practices Award from InvestmentNews magazine.

Gilbert & Cook, Inc. is a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where Gilbert & Cook, Inc. and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Gilbert & Cook, Inc. unless a client services agreement is in place. Gilbert & Cook, Inc. does not offer tax or legal advice. Consult with an attorney for legal advice and a qualified tax professional for tax advice.

Third Party Ratings: Gilbert & Cook was announced as one of the top two “Growers Across America” in October 2021 and October 2022. CityWire RIA identifi es and selects the fastest growing RIAs in each state by analyzing Form ADV data reported to the Securities and Exchange Commission at the time of publication. Data for this publication is gathered by Discovery Data. No compensation was paid in exchange for inclusion in the “50 Growers Across America.”

The Financial Times 300 Top Registered Investment Advisers is an independent listing produced annually by Ignites Research, a division of Money-Media, Inc., on behalf of the Financial Times (July 2020). Areas of consideration include a 3-year growth rate (2016-19) of assets under management, the company’s age, industry certifications of key employees, SEC compliance record and online accessibility. Neither the RIA firms nor their employees pay a fee to the Financial Times in exchange for inclusion in the FT 300.

To identify the “Best Practices Award” winners, InvestmentNews Research created composite scores which examined rate of growth, profi tability, and productivity levels from 2018 to 2019 for all the participants in the InvestmentNews Financial Performance Study. Final firms were selected and awarded in November 2019. Gilbert & Cook did not pay a fee to participate or to receive recognition on this list.

Announcing Marlis Gilberts Retirement in our 30th Anniversary Year

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Pictured Partners: Jerit Tripp, Megan Rosenstiel, Marlis Gilbert, Linda Cook, Chris Cook and Brandon Grimm

2023 brings us a mixture of joy, celebration, and frankly a little sadness. As we celebrate the 30th Anniversary of Gilbert & Cook, we also honor our Partner, Marlis Gilbert as she retires in February 2023.

Marlis Gilbert & Linda Cook turned their friendship and mutual admiration for each other’s work in the financial industry, into what is now a thriving private wealth management firm, managing over a billion dollars and serving individuals and families across the country.

Marlis earned the Certified Financial Planner (CFP®) in 1984, which was ground-breaking at the time. Her certificate from the College of Financial Planning was only the 1,848th in the nation.  “Financial planning strategies deeply interest me and I knew I needed to get as much education as I could to be in the right position to help others.” Marlis shared.

With Linda’s vision and Marlis’s passion for serving the community they realized the value they could bring by merging their strengths. The Gilbert & Cook ensemble that you see today, is what Linda and Marlis have planned and spent their careers developing and growing.

Linda adds, “What I absolutely love about Marlis is that she deeply cares about people and is so good at finding what matters most to them.”  As a firm, we have incorporated this value into the core of what we do – find out what matters most to people and work alongside them to create the financial means to support their life of abundance. Throughout this process, we create genuine relationships which last generations.

In the beginning, Linda and Marlis served clients side by side. This allowed them to see one another’s strengths, learn from each other, grow and refine their individual styles. As the business and team grew, the vision of becoming an ensemble became a reality. That has been the path to the firm we have today.

Over the past 30 years, Gilbert & Cook has grown to include in-house planning and investment teams. This depth of intellectual capital, provides the ability to surround clients with a unique experience and the strategies they need. What Marlis and Linda realized 30 years ago, is now at the heart of Gilbert & Cook… to recognize what each client needs, and tailor specialty services to meet them where they are. The firm is positioned to give current and future clients confidence that the team can provide sophisticated strategies to help clarify their complex situations.  

“You will often hear us tell clients, ‘Always be an expert in your own situation.’ There is a lot of financial noise out there, but what people really need to know and understand is what is relevant to them and their individual situation.” – Linda Cook

Throughout the past 30 years, Gilbert & Cook has worked alongside individuals and families to determine what it means for them to live a life of abundance and set financial priorities based on that definition. Today, each relationship begins with an Abundance exercise, helping them to create that vision.

“Through the years, I have seen the joy of that abundance in our clients’ lives over and over.  My life of abundance includes quality time with my husband and family, a healthy lifestyle through diet and exercise, some travel experiences, and a slower paced life in retirement. The Gilbert & Cook team will continue to help me live my life of abundance through this transition and whatever the future brings.” – Marlis Gilbert

While the team will miss seeing Marlis in person on a daily basis, we will continue to see her in the large and small touches she leaves with us throughout the firm. Marlis sets an example for everyone blessed to know her – in her professional life, in her personal life and now in her retirement life.  She has always been authentic and genuine and now she is modeling what it looks like to retire into her life of abundance in the way she has shown our clients throughout her career.

To celebrate Marlis’ retirement, the Gilbert & Cook team will honor her and our 30th Anniversary on April 13th at Glen Oaks Country Club.

Marlis, we are so grateful for you. You have made an immeasurable impact on the lives that you have touched. Congratulations on your very well-deserved retirement.

SECURE ACT 2.0 - What you need to know

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In the final days of 2022, Congress passed a new set of rules designed to make it easier to contribute to retirement plans and access those funds earmarked for retirement.

SECURE 2.0 builds upon its predecessor, the Setting Every Community Up for Retirement Enhancement (SECURE) Act, which was passed in 2019.

The sweeping legislation has dozens of significant provisions. To help see what changes may affect you, the major provisions of the new law are broken down into four sections below.

 

New Distribution Rules

The RMD age will rise to 73 in 2023. By far, one of the most critical changes was increasing the age at which owners of various retirement accounts MUST begin taking required minimum distributions (RMDs). Starting in 2033, RMDs must begin at age 75. If you turned age 72 before January 1, 2023, you must continue taking distributions under the prior rules. But if you are turning 72 in 2023 and have already scheduled your withdrawal, we may want to revisit your plan.1

Reduction in the RMD Excise Tax.  Previously a 50% excise tax was imposed if you missed taking an RMD by the deadline. Starting in 2023, if you miss an RMD for any reason, the penalty tax drops to 25%. If you fix the mistake promptly, the penalty may drop to 10%.2

New Accumulation Rules

401(k) and Employer-sponsored Plan Catch-Up Contributions. Starting January 1, 2025, employees aged 60 through 63 can make catch-up contributions equal to the greater of $10,000 (indexed annually for inflation) or 150% of the regular catch-up limit to workplace retirement plans. Also, the catch-up amount for people aged 50 and older in 2023 has increased to $7,500.  However, beginning in 2024, all catch-up contributions for those earning more than $145,000 in a particular year will have to be (taxable) Roth contributions.3 

Traditional and Roth Catch-Up Contributions. Currently, individuals aged 50 or older can make an additional catch-up contribution to a Traditional or Roth IRA up to $1,000 per year. In 2024, the $1,000 amount will be indexed for inflation on an annual basis.

Automatic Enrollment. Beginning in 2025, the Act requires employers in newly-established plans to enroll employees into workplace plans automatically at a 3% contribution rate. The contribution rate automatically increases by 1% per year until the employee is contributing at least 10%.  However, employees can choose to opt-out.4

Student Loan Matching. In 2024, companies can match employees’ student loan payments with retirement contributions. The rule change offers workers an opportunity to receive employer-funded retirement plan contributions while paying off their student loans.5

 

Revised Roth Rules

529 to a Roth. Starting in 2024, pending certain conditions, individuals can roll a 529 education savings plan into a Roth IRA. If your child gets a scholarship, goes to a less expensive school, or doesn't go to school, the money can get repositioned into a retirement account. Individuals will be able to roll over up to a total of $35,000 from 529 plans to a Roth IRA for the same beneficiary, provided 529 accounts have been held for at least 15 years. The annual rollover amounts will be subject to the annual Roth IRA contribution limit, but not the Roth IRA income limits. Any contributions to a 529 plan within the last 5 years (and the earnings on those contributions) are ineligible to be moved a Roth IRA.6

SIMPLE and SEP. From 2023 onward, employers can make Roth contributions to Savings Incentive Match Plans for Employees or Simplified Employee Pensions.7

Employer Matching Roth Contributions. Previously, employer matching contributions were required to be deposited into each employee’s pre-tax account in the retirement plan. The new legislation allows employer matches to the Roth portion of the account for electing employees.  Note, however, that electing a Roth match will subject the employee to taxation on the matching amount contributed to the plan by the employer.

Roth 401(k)s and Roth 403(b)s. The new legislation aligns the rules for Roth 401(k)s and Roth 403(b)s with Roth Individual Retirement Account (IRA) rules. Effective January 1, 2024, the legislation no longer requires minimum distributions from Roth Accounts in employer retirement plans.8

 

Act Highlights

Support for Small Businesses. Beginning January 1, 2023, the new law will increase the credit to help defray the administrative costs of setting up a retirement plan. The credit increases to 100% (from 50%) for businesses with less than 50 employees. By boosting this credit, lawmakers hope to remove one of the most significant barriers to small businesses offering a workplace plan.9

Qualified Charitable Donations (QCD). From 2023 onward, QCD donations will adjust for inflation. The limit applies on an individual basis, so for a married couple, each person who is at least 70½ years old can make a QCD as long as it remains under the limit (currently $100,000 per taxpayer per year).9  Individuals will also be able to make a one-time distribution of up to $50,000 to a charitable remainder trust or charitable gift annuity. 10

New Exceptions to the 10% early-withdrawal penalty. Generally, distributions from a retirement savings account before age 59½ are subject to an early withdrawal penalty unless an exception applies. The new legislation provides several new exceptions to the penalty, including terminal illness, domestic abuse, payment of long-term care insurance premiums, to recover from a federally declared disaster area, and an emergency personal expense.  

Retirement Savings Lost and Found. The Act intends to establish a searchable database for lost 401(k) plan accounts within two years of the legislation’s enactment.

Saver’s Credit transitioning to a Saver’s Match. Currently, low- and moderate-income taxpayers receive a credit up to $1,000 for retirement savings. Starting in 2027, the credit transitions into a match that will be contributed to the individual’s retirement account.

Other Highlights

There are several additional provisions in the new SECURE Act 2.0 legislation. A few examples include providing credits for enrolling military spouses immediately in employer plans, expansion of lifetime income products in retirement plans, improved retirement plan coverage for part-time workers, S-Corporation ESOP opportunities, and several other provisions.

The provisions listed above summarize only a portion of the Secure Act 2.0. The Gilbert & Cook Team looks forward to analyzing the impact the changes have on your financial situation to best understand how to assist you in Living a Life of Abundance. 

Also, retirement rules can change without notice, and there is no guarantee that the treatment of specific rules will remain the same. This article intends to give you a broad overview of SECURE 2.0. It is not intended as a substitute for real-life advice. If changes are appropriate, we will outline an approach and work with your tax and legal professionals, if applicable.

Sincerely,

Gilbert & Cook Team

 

 

The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced to provide information on a topic that may be of interest. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.
Citations:
1. Fidelity.com, December 23, 2022
2. Fidelity.com, December 22, 2022
3. Fidelity.com, December 22, 2022
4. Paychex.com, December 30, 2022
5. PlanSponsor.com, December 27, 2022
6. CNBC.com, December 23, 2022
7. Forbes.com, January 5, 2023
8. Forbes.com, January 5, 2023
9. Paychex.com, December 30, 2022
10. FidelityCharitable.org, December 29, 2022

Why is Life Insurance Important?

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Life Insurance Misconceptions

By Reece Oleson, CFP®, RICP®, CEPA
Director of Financial Planning

Life Insurance is an important financial planning tool. Life Insurance benefits can be designed to meet many goals, such as replacing income, paying off debts, or fully funding college. Let’s talk about three common misconceptions about Life Insurance:

1.    I don’t need Life Insurance. 

If your spouse or children’s lifestyle today or in the future would be negatively impacted without your income, Life Insurance can provide additional assets to support their lifestyle.  

2.    Life Insurance is expensive. 

Term insurance is very cost-efficient. For example:

  • A 20-year term policy with a $1,000,000 death benefit for a 40 year old man at standard rates is about $100/month.*

  • A 20-year term policy with a $1,000,000 death benefit for a 40 year old woman at standard rates is about $80/month.*

At standard plus, preferred, or preferred plus rates, premiums are even cheaper!

3.    I already have Life Insurance through work, so that should be enough. 

Life insurance through employers is a good start, especially when you are younger, but isn’t generally enough to replace the insured’s income. Most employers only provide around $50,000 to 1 year’s salary of life insurance at no cost. 

Many employers do allow you to purchase additional coverage, and it may be easy to purchase as it often does not require underwriting. It is likely more expensive than term life purchased on your own, especially for older workers as most premiums increase as you age, and you may not be able to get enough coverage to meet your needs.  

Term life insurance is generally the most affordable life insurance option. It provides coverage when you need it and goes away when you no longer need it. 

The money you save by purchasing term insurance can be used toward your other goals, whether that is a purchase for today or saving for tomorrow! 

Contact Gilbert and Cook to analyze your life insurance needs & provide cost-efficient options to meet those needs.

*Source: TNBC term life insurance quotes for Iowa resident, 11/16/2022.

Wendy Stenberg joins Gilbert & Cook!

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"I am thrilled to be joining the private wealth management firm of Gilbert & Cook where we are committed to helping people live more meaningful and fulfilling lives. We employ a process to crystalize goals, provide clarity, and instill confidence with our clients to help them to Live a Life of Abundance. At Gilbert and Cook, it’s more than just the numbers, it’s about living your best life." - Wendy

Wendy Stenberg joined Gilbert & Cook as an Advisor in November 2022. With over thirty years of experience, Wendy is a dedicated and experienced wealth management professional who is passionate about exceeding client expectations and building long-term meaningful relationships to help clients achieve personal goals and aspirations. 

In her new role, Wendy works in collaboration with other members of the Gilbert & Cook team to provide sophisticated strategies and service to her clients. Gilbert & Cook is thrilled and honored to welcome Wendy to the team. We are delighted that she has decided to lend her talents and experience to inspire abundance with our clients and Gilbert & Cook family.

Welcome Wendy!

Cybersecurity Presentation - Event Recap

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In today's world where everything is digital, how can you keep your data protected? We took a further look into this topic to provide clear solutions.

On September 16th 2022, Gilbert & Cook hosted a cybersecurity event, featuring three members of our Compliance Committee. We presented the ways Gilbert & Cook protects your data, the ways Charles Schwab protects your data, and ways you can protect your data.

Here are the big takeaways from the event:

  • Be password smart; create a strong password by using letters, symbols, and numbers. Never use the same password for multiple logins. For critical accounts such as your bank account, credit cards, retirement account, and phone, setup two-factor authentication. Two-factor authentication is where you are required to enter a generated code sent to you as a text message or email to gain access to your account.

  •  Think before you click on links in an email or text. You can do this by hovering your cursor over any URL links being sent; is the URL link a legitimate site? Scammers will attempt to disguise themselves as someone familiar to you, verify the sender's email address or phone number. Another area to look at is the time the email or text was sent. Often times scammers will send emails or texts outside of regular business or daily hours.

  •  Keep your devices updated. Computer and mobile operating systems offer updates that will include security patches. These patches are important as they allow your devices to be up-to-date on the most recent systems upgrades. Typically these updates are pushed out to you, and you are prompted to allow them to update and install.

  •  Almost everyone has home Wi-Fi, password protect yours. Ensure your network is private, check to make sure only your devices are using your internet. Do not use public Wi-Fi networks such as those available at the grocery store, library, coffee shop, or airport. When you need to use Wi-Fi while on-the-go, use your phone as a hotspot.

Disclosure: The presentation on September 16th 2022 was meant for informational purposes only. The featured speaker is not affiliated with Gilbert & Cook, Inc. Gilbert & Cook, Inc. does not offer tax or legal advice. You should consult with an attorney for legal advice and a qualified tax professional for tax advice. Gilbert & Cook, Inc. is a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where Gilbert & Cook, Inc. and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Gilbert & Cook, Inc. unless a client services agreement is in place.

2022 Mid-Year Update - Event Recap

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History doesn’t repeat but it often rhymes. To gain a better understanding of our current markets and put this year in perspective, it’s important to understand what’s happened in the past.

On June 30th 2022, Gilbert & Cook hosted a mid-year update event, featuring BlackRock economist, Mark Peterson. Halfway through the year and it's certainly been a remarkable historic start. Let’s take a look back at some of the unusual outcomes thus far.

Here are 5 big takeaways from the event speaker:

1) We’ve clearly seen a challenging start for both stocks and bonds so far in 2022. Stocks and bonds are both negative; which is very rare. Over the last 95 years, stocks and bonds have been negative at the same time in the same calendar year, twice – in 1931 and 1969. The culprit? The market trying to digest the economy and figure out where we’re headed from here. This year, the markets priced in a lot of short-term interest rate increases by the federal reserve in effort to slow the economy and bring inflation back to more modest levels.

2) Speaking of inflation… 2022 saw the worst start ever for bonds going back to 1926, down more than 10%. However, we’ve reset interest rates and bond returns to much healthier levels for investors going forward.

3) Looking at the stock side…through the end of June we saw the 5th worst start for stocks, out of 95 calendar years. However, history tells us that the first half of the year and the second half of the year are not correlated. In fact, in 7 out of the 9 worst starts to the calendar year, stocks have ended up much higher 12 months later.  

4) A big part of the story on the stock side is the volatility. If we look at the number of days that the market moved up or down by more than 2%; as of June 30th, 2022 has seen 14 down days and 12 up days, greater than 2%. Interestingly enough, the best and worst days in market history are often around the corner from each other. For example, in March of 2020 we had 3 of the worst days in stock market history – but we also had 5 of the best days in market history in the same month. Diversification is more important than ever and it’s important to remember that when we see volatility in the market, don’t let it derail your long-term financial plans.

5) Consumer satisfaction level is often a contrarian indicator for the market. History shows that if less than a 3rd of the country is satisfied, 1 year later stocks are up better than 15% on average. The opposite is true as well; whenever there is a lot of satisfaction, expectations are high and returns are lower.

Disclosure: The presentation on June 30th 2022 was meant for informational purposes only. The featured speaker is not affiliated with Gilbert & Cook, Inc. Gilbert & Cook, Inc. does not offer tax or legal advice. You should consult with an attorney for legal advice and a qualified tax professional for tax advice. Gilbert & Cook, Inc. is a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where Gilbert & Cook, Inc. and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Gilbert & Cook, Inc. unless a client services agreement is in place.

Sources: Morningstar as of 6/30/22. U.S. bonds represented by the IA SBBI US Gov IT Index from 1/1/26 to 1/3/89 and the Bloomberg U.S. Agg Bond TR Index from 1/3/89 to 6/30/22. U.S. stocks are represented by the S&P 500 Index from 3/4/57 to 6/30/22 and the IA SBBI U.S. Lrg Stock Tr USD Index from 1/1/26 to 3/4/57, unmanaged indexes that are generally considered representative of the U.S. stock market during each given time period. Past performance does not guarantee or indicate future results. Index performance is for illustrative purposes only. You cannot invest directly in the index

2022 Mid-Year Update Event (Video)

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“History doesn’t repeat… but it often rhymes”.

On June 30th 2022, Gilbert & Cook hosted a mid-year update event, featuring BlackRock economist, Mark Peterson.

This event is meant for informational purposes only. The featured speaker is not affiliated with Gilbert & Cook, Inc. Gilbert & Cook, Inc. does not offer tax or legal advice. You should consult with an attorney for legal advice and a qualified tax professional for tax advice. Gilbert & Cook, Inc. is a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where Gilbert & Cook, Inc. and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Gilbert & Cook, Inc. unless a client services agreement is in place.

G&C Employee Spotlight: Amy Mitchell

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Amy joined Gilbert &Cook, Inc. a year ago as our Director of Operations.

An organization that is near and dear to Amy, is Dobbers Up . The organization was created in 2007 to help support Dan Dowson & his family during his courageous battle with ALS. Dan lost his battle in 2009 but never lost his faith, humor, or giving spirit. Amy has been part of Dobbers Up since it's inception in 2007. She serves as a Board Member & Treasurer. Amy, along with several other volunteers, spend countless hours fundraising, organizing, and participating in the annual Dobbers Up Golf Tournament.

Amy believes the spirit & focused mission of Dobbers Up brings out the good in people, while providing support to families that have been "thrown a curveball in life".

On June 10th, Gilbert & Cook supported the 15th annual golf tournament for Dobbers Up. Since 2009, Dobbers Up has made contributions to local families who have been "thrown a curveball in life", totaling more than $100,000.

50 Growers Across America 2021 - CityWire RIA

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We are pleased to share that Gilbert & Cook has been named a 'runner-up' for the fastest growing Registered Investment Advisory firm in Iowa by Citywire's RIA magazine!

CityWire RIA has selected the fastest-growing firms in every state based on the previous years Form ADV data reported to the Securities and Exchange Commission at the time of publication. Read more about this honor on citywireusa.com

Your Year-End Financial Checklist

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Aspects of your financial life to review as the year draws to a close.

The end of the year can help remind us of last-minute things we need to address and the goals we want to pursue. To that end, here are some aspects of your financial life to think about as this year leads into the next. 

Keep in mind, this article is for informational purposes only. Make certain to contact a tax or legal professional before modifying your tax strategy.

Your Investments.

Set a goal to review your investments with your Advisor at your next meeting. Your Gilbert & Cook investment team will review your portfolio positions and asset allocation. Remember, asset allocation and diversification are approaches to help manage investment risk. They do not guarantee against investment loss.

Your Retirement Strategy.

You may want to consider contributing the maximum to your retirement accounts. It’s also a good idea to review any retirement accounts you may have through your work. This is also a great time to decide on making catch-up contributions if you are eligible. 

  • $19,500 for 401(k), 403(b), 457 (b) Roth 401(k); $6,500 catch-up provision for individuals 50 and over

  • $13,500 SIMPLE plans; $3,000 catch-up contribution for individuals 50 and over

  • $6,000 Roth IRA / IRA contribution; $1,000 catch-up contribution for individuals 50 and over

Your Tax Situation.

Consider checking in with your tax or legal professional before the year ends, especially if you have questions about an expense or deduction from this year. Also, it may be a good idea to review any sales of property as well as both realized and unrealized losses and gains. (1)  

Beginning in 2023 you will no longer be able to deduct your Federal Taxes paid from your Iowa State Tax Return. At the corporate level the Federal deduction gets eliminated starting in 2022. To take advantage of the allowable deduction on your 2021 tax return, please be sure to pay all federal tax estimates in 2021 as opposed to waiting until January of 2022 when estimates are due. 

Your Charitable Gifting Goals.

Plan charitable contributions or contributions to education accounts and make any desired cash gifts to family members. The annual federal gift tax exclusion allows you to give away up to $15,000 in 2021, meaning you can gift as much as $15,000 to as many individuals as you like this year. Such gifts do not count against the lifetime estate tax exemption amount, as long as they stay beneath the annual federal gift tax exclusion threshold. Besides outright gifts, you can explore creating and funding trusts on behalf of your family. The end of the year is also a good time to review any trusts you have in place. Using a trust involves a complex set of tax rules and regulations. Before moving forward with a trust, consider working with a professional who is familiar with the rules and regulations. (1,2) 

Note: If you are making Qualified Charitable Distributions (QCDs), make sure that you communicate that to your CPA so that it is reported on your taxes.

Your Life Insurance Coverage.

The end of the year is an excellent time to double-check that your policies and beneficiaries are up to date. Don’t forget to review premium costs and beneficiaries and think about whether your insurance needs have changed. Several factors could impact the cost and availability of life insurance, such as age, health, and the type of insurance purchased, as well as the amount purchased. Life insurance policies have expenses, including mortality and other charges. If a policy is surrendered prematurely, you may pay surrender charges, which could have income tax implications. You should consider determining whether you are insurable before implementing a strategy involving life insurance. Finally, don’t forget that any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.

Life Events.

Here are some questions to ask yourself when evaluating any large life changes in the last year:

  • Did you happen to get married or divorced this year?

  • Did you move or change jobs?

  • Did you buy a home or business?

  • Was there a new addition to your family this year?

  • Did you receive an inheritance or a gift?

All these circumstances can have a financial impact on your life as well as the way you invest and plan for retirement and wind down your career or business.

As always, your Gilbert & Cook team is here for you. Please talk to your Advisor if you have any questions regarding your financial situation.

 

Citations

1. turbotax.intuit.com, October 16, 2021

2. irs.gov, October 14, 2021