2025 Retirement and Tax Limits: What Changed

Hello,

• Meaningful purchases (a favor)
• 2025 Checklist
• Annual Reminder of Investment Principles

Meaningful Purchases

A lot of times we read newsletters and don’t ever respond or engage, myself included. I’m asking a favor. In the last year or even beyond that, what have been some purchases you made that you would consider meaningful or worthwhile? Could be a small or large purchase.

In the spirit of sharing, I’ll go first.

Sauna:

• Cost: I can’t exactly recall but somewhere between ~$5,000 - $7,000 bought in 2018
• Benefit: It was a big purchase for us at the time, but we’ve gotten good use out of it, and as far as I know it should last us a long time. It is meaningful to us because of the health benefits.

Now it’s your turn : )

2025 Checklist

• Update Net Worth
• Review final paystub to determine if enough tax was withheld
• Retirement plan projection
• Rebalance investments
• Determine Emergency Fund is adequate
• Plan for any short term purchases coming up
• Confirm utilizing high interest savings account for Emergency Fund (current rates ~4%)
• Mortgage Review – determine if there are any refinancing opportunities (most likely not right now but keep an eye on this over the next year if you bought recently)
• Tax Loss Harvesting – if there are losses in a brokerage account, determine if you should harvest the losses to offset any gains (especially if you intend to sell an asset such as real estate or a business)
• Health Savings Account on track to max out
• Max out Roth IRA
• 401k on track to max out or at least get the full match
• Insurance Review – watch out for home/auto policies increasing, shop around for new policies if so. Watch out for expiring term life insurance policies – sometimes they will automatically renew your plan if they don’t hear from you at a higher premium
• Estate Plan Completed - if completed 5 years ago consider updating
• Update beneficiaries on assets/insurances according to your Estate Plan

Investment Principles

We certainly enjoyed another good year in the markets. I am and will likely always remain an optimist, but will also remind you that while it’s okay to celebrate a nice win, we can always have a nice correction on the horizon (on average a ~14% drawback occurs every year).

Notice I say “on average” – this isn’t a forecast or a prediction it’s a simple recognition that the markets eventually humble us. Without these corrections (risk), there would be no return.

That being said, let’s revisit our Principles:

The economy cannot be consistently forecast, nor the market consistently timed. Therefore, we believe that the highest probability of capturing long-term returns is simply to remain invested for money we don't need in the short-term.

We are long-term owners of businesses, as opposed to speculating on "the stock market"

Declines in the market, though frequent and sometimes quite significant, have always recovered, as America's most successful companies continue to innovate.

Long-term investment success mostly depends on making a plan and acting continuously on that plan.

An investment policy based on anticipating (or reacting to) current economic, financial or political events/trends most often fails in the long run.

As always, I welcome any questions or comments. I sincerely am grateful to those who allow me to serve them for another year.