Posts made in June 2018

IRS Makes Inflation Adjustments for New Tax Law

The Internal Revenue Service has made inflation adjustments for 2018 to accommodate changes in the tax code for the Tax Cuts and Jobs Act. The changes will apply to 2018 returns filed in 2019.

The top items for 2018 returns include:

• The standard deduction for married couples filing jointly increases to $24,000. The deduction for single taxpayers and married people filing separately increases to $12,000. The deduction for heads of households is $18,000.

• The personal exemption drops to $0 under the jobs act.

• New rates for taxpayers dropped to 10%, 12%, 22%, 24%, 32%, 35%, and 37%. The highest rate applies to married taxpayers filing jointly and to surviving spouses with taxable incomes exceeding $600,000. The rate also applies to single people and heads of households with incomes exceeding $500,000 and to married taxpayers filing separately with incomes above $300,000.

• The jobs act does away with limitations for itemized deductions.

• The jobs act significantly increases the exemption amount for the Alternative Minimum Tax. The single taxpayer's exemption is $70,300; it begins to phase out at $500,000. For married couples filing jointly, the exemption is $109,400 and begins phasing out at $1 million.

• The exclusion for estates of people who die in 2018 is $11,180,000.

Other details may apply, and you can find more information on the IRS website.

* This information is not intended to be a substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax advisor.

Tip adapted from[10]

Trade and Interest Rates

In This Issue

Quote Of The Week
Recipe Of The Week
Tax Tips
Golf Tip
Healthy Lifestyle
Green Living



Last week stocks showed mixed results as political headlines continued to dominate the news. The Dow lost 0.89% and the S&P 500 was almost flat with a 0.02% gain.[1] The NASDAQ, on the other hand, reached a record high on Thursday and ended the week up 1.32%.[2] Both the S&P 500 and NASDAQ experienced their 4th week of gains in a row.[3] International stocks in the MSCI EAFE lost ground, posting a 0.52% decline

Two Key Perspectives From Last Week

1. Trade tension continued.
Spats with U.S. allies - including Canada - and ongoing threats of a trade war with China captured investors' attention last week. On Friday, equities briefly stumbled when the U.S. pledged new tariffs on Chinese goods, and China responded by promising the same level of tariffs on the U.S.[5] A true trade war could slow global economic growth, but the current tariff tension may be little more than negotiation tactics.[6]

2. Interest rates increased.
On Wednesday, June 13, the Federal Reserve raised its benchmark interest rates for the 2nd time this year. Fed Chairman Powell said, "...the economy is doing very well. Most people who want to find jobs are finding them and unemployment and inflation are low."[7] The Fed believes economic growth will continue at a faster rate than they last predicted. They also project that unemployment will fall to 3.6% by the end of 2018. The Fed may raise rates twice more this year.[8]

The Takeaway
Getting caught up in the news cycles and international headlines is easy, but they often provide little perspective on what may actually lie ahead for investors. Instead of trying to predict market performance, we encourage you to focus on the data.

This week, we'll gain new perspectives on the housing market, as well as employment. The insight will continue to help us build a picture of where the economy is today-and how to help our clients make the most of their opportunities.

Monday: Housing Market Index
Tuesday: Housing Starts
Wednesday: Existing Home Sales
Thursday: Jobless Claims

What You Need to Know about Early Withdrawals from Retirement Plans*

Taking an early withdrawal from your Individual Retirement Account (IRA) may be tempting. But the tax penalty can make a significant dent in your long-term financial plan.

Here are some terms and requirements to keep in mind before considering an early withdrawal:

  • Early withdrawals are defined as taking distributions from your IRA or retirement plans before the age of 59½.
  • Taxpayers must report withdrawals to the IRS when they file their tax returns. They may owe income tax on withdrawals and pay an additional 10% tax penalty.
  • Nontaxable withdrawals aren’t subject to the 10% tax penalty. Examples include contributions on which taxpayers paid taxes before the money was deposited into the plan.
  • Rollovers happen when plan holders move money or other assets from 1 plan to another. The IRS allows a maximum of 60 days to complete a rollover to keep it tax-free.
  • Certain exceptions exempt plan holders from the 10% tax penalty. Many retirement plan and IRA rules differ.
  • Disaster Relief provisions exempt plan holders in certain disaster areas from the 10% tax penalty.

* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

Tip adapted from[14]


Markets Post Week of Growth

On Friday, the markets closed the week gaining traction. The Dow had 7 days of consecutive growth, rising 2.34% – its largest weekly gain since March.[1] Meanwhile, the S&P 500 rose 2.41%, the NASDAQ jumped 2.68%, and the MSCI EAFE increased 1.41%.[2]

 Various factors came together to support the growth. From geopolitical topics to strong corporate earnings, we’ll focus on 3 key developments that drove movement.

1. Energy Shares Boosted by Iran Nuclear Deal Withdrawal

President Trump’s decision on Tuesday to withdraw from the Iran nuclear deal helped push the energy sector higher. With the possibility of renewed sanctions on the horizon, the anticipation of a pullback from global oil supplies helped boost prices. Though oil prices fell from a 3½ – year high on Friday, it was the 2nd week of growth, driving energy shares to rise 3.8%.[3]

2. Technology Sector Jumps Amid Strong Corporate Earnings

After the technology sector’s months of stagnation – fueled in part by recent fears over privacy – it is now approaching all-time highs. Since April 25, the information technology sector has increased 9%. The movement is driving many investors to join the rally, while many analysts remain cautious.[4] Overall, the growth contributed 3.5%.[5]

This rally happened on the back of strong corporate earnings. Over 70% of total S&P 500 companies reported earnings growth that exceeded expectations. Last week’s positive reports helped push the index past 50- and 100-day moving averages.[6]

3. Inflation Remains Steady

The Consumer Price Index (CPI), which measures the price of goods and services, rose only 0.2% for the month in April and 2.5% over the year. These reports both missed and met expectations, respectively.[7] The tepid growth caused some investors to worry that the Federal reserve would raise interest rates more quickly, as the U.S. dollar fell and held below its 2018 high.[8] Some analysts, however, believe that the missed expectations should ease the Fed’s pressure to fast-track interest rates.[9] 

Looking Ahead

We will continue tracking geopolitical developments – from potential actions against Syria, tariffs on Iran, and preparations for President Trump’s upcoming meeting with North Korea’s Kim Jong-un.[10] In addition, key discussions around the American Free Trade Act and trade relationships with China remain on the horizon.[11] We also will gain our first insights on how well consumer spending performed in the 2nd quarter.[12]

If you would like to discuss any developments or gain a clearer understanding of how these issues may affect your portfolio, contact us today. We are always here to help you make sense of your financial life and gain clarity for the road ahead.













RCG Introduction

Welcome to the Ramsay Capital Group Blog and our first post!  We are excited to be in the Highland Park neighborhood of Saint Paul and enjoy working with people in this community (Mac Groveland, Summit Hill and Crocus Hill) and other surrounding neighborhoods in the Twin City Metro area.  We purchased this beautiful 1922 original Mom & Pop store in May of 2016 and spent the next four months renovating the main level.  During this process, we restored the hardwood floors and other period-specific details including a door in the floor we uncovered.  This was likely used to store dry goods and keep them cool.  Please stay tuned weekly for market updates, educational information and our thoughts on the markets. Some of the topics you can expect to read about here are:

  • Financial Planning
  • Portfolio Management
  • Overall Thoughts on the Market
  • Retirement Planning
  • College Planning
  • Life Insurance
  • Health Insurance
  • Disability Income Insurance
  • Long-Term Care Insurance
  • Estate Planning
  • Tax Tips
  • Neighborhood Events and Happenings
  • Restaurant / Foodie News

Our Mission at Ramsay Capital Group is to ensure the financial success of our clients now and throughout retirement.  We understand how hard you work and that retirement has varying definitions to different people.  We are client-focused and work closely to develop long-term relationships. Scott Ramsay is a Financial Advisor and founder of Ramsay Capital Group who lives and works with his family in the Highland Park and Mac Groveland neighborhoods of Saint Paul Minnesota.