Understanding Interest Rates: Why They Matter to You

Market Indices Performance 

Retirement represents a pivotal phase in an individual’s life, marked by the transition from employment to a lifestyle supported by accumulated financial resources and personal planning. While often approached primarily through a financial lens, effective retirement planning must also incorporate qualitative factors that influence well-being, identity, and life satisfaction. This article outlines both the quantitative and qualitative dimensions of retirement, emphasizing the importance of a balanced and holistic perspective. Qualitative Aspects Beyond the numbers, retirement is a profound personal and emotional transition that affects daily life, self-perception, and interpersonal relationships. Here are a few aspects that influence a successful retirement transition: 1. Sense of Purpose Many retirees experience a loss of identity upon leaving the workforce. A successful retirement often involves finding new purpose through activities such as volunteering, mentoring, or creative pursuits. 2. Social Engagement Social isolation is a common challenge, particularly for those who derived much of their interaction from the workplace. Maintaining strong social networks contributes significantly to mental health and emotional resilience. 3. Health and Lifestyle Retirement presents an opportunity to focus on physical and mental well-being. Establishing healthy routines, engaging in regular exercise, and pursuing intellectual interests are vital for a high quality of life. 4. Psychological Adjustment The emotional shift into retirement can be complex, requiring time to adjust to a new identity and lifestyle. Gradual retirement or pre-retirement counseling may ease this transition. Quantitative Aspects The quantitative side of retirement focuses on measurable financial and logistical elements essential to sustaining one’s standard of living. 1. Financial Preparedness This includes the evaluation of retirement savings, income streams such as pensions and Social Security, and investment portfolios. 2. Life Expectancy and Longevity Risk With increasing life expectancy, retirees must plan for potentially 25–30 years of post-employment life.1 Longevity risk is the risk of outliving one’s assets and necessitates careful financial forecasting and often calls for conservative investment and withdrawal strategies. 3. Healthcare Costs Healthcare remains one of the most significant expenses in retirement. Retirees must anticipate out-of-pocket costs for insurance premiums, medical procedures, medications, and potential long-term care. Planning for these costs is critical to avoid financial strain later in life. 4. Investment Strategy and Risk Management Retirement typically involves a shift from growth-focused investing to capital preservation. Retirees must balance the need for income generation with the desire to protect against market volatility and inflation. Conclusion A meaningful and secure retirement depends on both quantitative preparation and qualitative enrichment. Financial planning lays the foundation, but personal fulfillment, health, and social engagement define the experience. A truly successful retirement is one that aligns financial stability with purposeful and satisfying living. Source: https://www.dunham.com/FA/Blog/Posts/financial-planning-in-an-era-of-longer-lifespans?ref=dunham.ghost.io

The financial advisory industry is undergoing a significant transformation, driven by rapid advances in technology. Once reliant solely on face-to-face meetings and manual portfolio management, today’s financial advisors are leveraging digital tools to offer smarter, faster, and more personalized financial guidance. Far from replacing financial advisors, technology enhances their capabilities, allowing them to deliver more value to clients, stay compliant, and compete in a fast-changing market. 1. The Digital Shift in Financial Advising The traditional model of financial advising that involves paper documents, in-person meetings, and delayed communications, is becoming obsolete. Clients now expect real-time updates, mobile access, and digitally driven experiences. Advisors who embrace technology are not just meeting these expectations; they’re creating new value. Cloud-based platforms, CRM tools, and secure client portals are streamlining workflows, freeing up more time for relationship-building and strategic planning. 2. Robo-Advisors: Competitor or Complement? Robo-advisors are automated, algorithm-driven investment platforms that were initially seen as a threat to traditional advisors. But the story has changed. Instead of replacing human advisors, robo-advisors are now often integrated into hybrid advisory models, combining the efficiency of automation with the insight of human expertise. For example, financial advisors can use robo platforms to handle routine tasks like portfolio rebalancing or tax-loss harvesting, while focusing their time on complex planning, retirement strategies, and holistic financial coaching. 3. Artificial Intelligence and Data Analytics AI is becoming a trusted partner for financial advisors. By analyzing massive amounts of client data, AI tools can uncover patterns, identify risks, and generate tailored recommendations that help advisors offer more proactive and customized advice. With predictive analytics, advisors can forecast life events and suggest actions long before clients even ask. This makes the advisor not just a service provider, but a true financial partner. 4. Client Experience: Personalized, Digital, and On-Demand Modern clients, especially Millennials and Gen Z, expect a digital-first approach to money management. Advisors are meeting this need with client dashboards, mobile apps, and video conferencing tools that make communication fast and convenient. Technologies like e-signatures, digital onboarding, and interactive financial planning software improve transparency and foster engagement. Some advisors even use gamification or AI-powered chatbots to make financial literacy more accessible. 5. Compliance and Cybersecurity in a Digital World As advisors handle more client data online, cybersecurity and regulatory compliance are top priorities. Fortunately, technology also provides solutions here. Compliance tools can monitor communication, generate audit trails, and ensure KYC/AML standards are met with minimal manual input. Secure document storage, multi-factor authentication, and encrypted messaging platforms help advisors build trust and maintain client confidentiality. 6. Open Banking and Financial Integration Tools Thanks to Open Banking and API-driven platforms, advisors can now access clients’ complete financial picture. From banking and loans to retirement accounts and insurance, advisors can get up to date data all in one place without having to ask for updated paper statements. This integrated view allows for holistic planning and better decision-making. Tech-forward advisors are leveraging aggregation tools like eMoney, MoneyGuidePro, or RightCapital to deliver dynamic plans that evolve with clients' goals and can track real time habits of their clients. 7. Fiduciaries vs. Technology? As technology becomes central to financial services and governance, fiduciaries must evolve to meet new standards of care, loyalty, and prudence. Today’s fiduciary responsibilities extend beyond traditional decision-making to include oversight of AI tools, digital platforms, data privacy, and cybersecurity. Whether it’s relying on algorithm-driven investment strategies or evaluating third-party tech vendors, fiduciaries are now expected to exercise digital literacy and ethical judgment in tandem with legal obligations. The rise of opaque algorithms, ESG scoring tools, and automated systems requires not only informed adoption but transparent governance. Technology is no longer a support function it’s becoming a core fiduciary consideration within decision making and putting client’s best interests forward. In conclusion, while some may fear that the integration of technology into the financial sector could diminish control, the reality is quite the opposite. By leveraging advanced tools, advisors are empowered to deliver enhanced, personalized service, allowing them to focus more effectively on their clients and streamline the overall experience. Sources: Nitrogen Launches Its Own AI Notetaker (And More Of The Latest In Financial) Bot Versus Human: For Financial Planning, It’s No Contest Meet the AI agents defining the new customer experience

Managing personal finances does not need to be overwhelming. Achieving long-term financial goals often begins with simple steps, such as creating a budget and implementing effective debt management strategies. By adopting a few disciplined habits, you can establish a strong financial foundation, reduce stress, and move closer to financial independence. Whether you're just getting started or seeking to refine your approach, consider these five key steps to strengthen your financial well-being: 1. Set Clear Financial Goals Before creating a budget or starting to save, take time to clearly define your financial goals. It's difficult to make meaningful progress without a clear direction. Identify what you want to achieve. Whether it’s paying off debt, purchasing a home, or building an emergency fund, categorizing your goals by timeframe: short-term (1–2 years), medium-term (3–5 years), and long-term (10+ years) can help give direction to which order your goals should fall. Well-defined, measurable goals provide clarity, purpose, and motivation to stay on track. 2. Track Your Spending You can’t fix what you can’t see. Begin by tracking all your income and expenses for a month to gain a clear picture of your financial habits. Whether you use budgeting apps, spreadsheets, or simply pen and paper, the goal is to identify spending patterns, highlight areas for improvement, and uncover potential savings opportunities. 3. Create a Simple Budget A budget is a strategic plan for managing your finances. To create one, begin with your total income, deduct your fixed expenses, such as rent, utilities, and other essential bills, then allocate the remaining funds toward financial goals, savings, and discretionary spending. The 50/30/20 rule is a great place to start: 50% needs 30% wants 20% savings/debt repayment Remember, this is a general structure to help give an idea. Adjust as needed to fit your life. 4. Build an Emergency Fund An emergency fund is your financial safety net. Aim to save at least a measurable, fixed dollar amount to start, then work up to 3–6 months of living expenses. Keep it in a high-yield savings or checking account so it is accessible, but out of everyday reach. This fund keeps unexpected expenses from turning into debt or even more stress. 5. Pay Off Debt and Start Investing Focus on high-interest debt first, like credit cards. Then, compare which debt is ok with sticking around by seeing if it is Good Debt or Bad Debt. A good way to do this is by measuring the life of the item that has the debt associated with it and how long you plan to use said item. For example, a mortgage on a home is Good Debt. A home is an appreciating asset that most people will use for many years. A high-interest personal loan is an example of Bad Debt. Credit cards are the perfect example of this. A common tactic used to get Bad Debts under control is the debt snowball. This approach involves focusing on paying off the smallest balances first while maintaining minimum payments on larger debts. As each balance is eliminated, the freed-up funds are rolled into the next smallest debt, creating a compounding effect. This method builds momentum and motivation, helping you stay engaged as payments grow and debts are steadily eliminated. Once debt is under control, investing in the future is the next step. Use retirement accounts like 401(k)s or IRAs for long-term, tax beneficial growth. Time and consistency are your best friends when planning.

Risk management in financial planning is the process of understanding potential financial threats, evaluating their significance, and taking proactive steps to reduce their impact. These risks may arise from changes in the market, unexpected personal challenges, rising costs, tax implications, or broader economic changes. While it’s not possible to eliminate risk completely, effective financial planning helps you anticipate challenges, reduce their severity, manage their effects, and recover more effectively when setbacks occur. Why Risk Management Is Crucial 1. Preserves Your Capital The first rule of investing is often, “Don’t take losses.” Risk management helps protect your principal, so you're not forced to sell after a major loss. 2. Keeps Emotions in Check Fear and greed drive many poor financial decisions. With a risk management strategy in place, you’re less likely to panic during market volatility or chase unrealistic gains. 3. Improves Financial Resilience Life is unpredictable, and events like job loss, health emergencies, or market downturns can quickly disrupt your plans if you're not prepared. Risk management helps create a financial cushion, giving you the stability to navigate these challenges more confidently. 4. Ensures Long-Term Growth A well-balanced approach to risk helps you stay invested for the long term, which is where real wealth accumulation happens. It prevents overexposure to risk while still allowing growth. 5. Aligns Your Portfolio with Your Life Goals Not every investor is trying to beat the market. Some just want a comfortable retirement or a college fund for their kids. Managing risk aligns your financial plan with your goals and time horizons. Core Risk Management Strategies 1. Asset Allocation Asset allocation refers to how you distribute your investments across different asset classes such as stocks, bonds, and real estate. A younger investor may choose a higher proportion of stocks to pursue growth over a longer time horizon. In contrast, someone approaching retirement is more likely to prioritize stability and capital preservation by allocating more to bonds or dividend-paying stocks. 2. Diversification Even within an asset class, spreading your investments across industries, geographies, and types of securities can reduce the risk of any one failure hurting your portfolio. Don’t put all your eggs in one basket. 3. Insurance Planning Life, health, disability, and property insurance all protect against unexpected events that can have a major financial impact. 4. Emergency Fund This is your first line of defense against sudden expenses or income loss. A fully funded emergency reserve helps you avoid tapping into your investments during downturns. 5. Contingency Planning A good financial plan includes backup strategies for major life events, such as losing a job, dealing with illness, or supporting a family member. Having backup plans in place can help you stay focused and make clear decisions, even when emotions are running high. 6. Regular Monitoring and Rebalancing Market changes may shift your portfolio away from your desired risk level. Rebalancing brings it back in line and helps manage risk over time. Risk Management at Different Life Stages Risk tolerance and financial priorities often evolve with age, but everyone is different. The following examples offer a general framework to help assess an appropriate level of risk based on your stage in life: In your 20s–30s: You can typically afford to take more investment risk (long time horizon). In your 40s–50s: Risk should be more balanced. Growth is still important, but so is preservation and protection of principal. In your 60s and beyond: Capital protection and income become more critical than aggressive growth. Preservation of funds is of utmost importance. A financial plan that adapts to each stage of life while maintaining a focus on risk management is both effective and prudent. Make Risk Work For You, Not Against You Risk in financial planning is not inherently negative; in fact, it is often a key driver of wealth creation and a necessary element in achieving long-term goals. When managed effectively, risk can present valuable opportunities. However, unmanaged risk can lead to significant setbacks. Through thoughtful planning and the use of appropriate risk management strategies, you can navigate uncertainty with greater confidence and make informed decisions that align with your objectives. Ultimately, risk management is not just about minimizing losses, but about building a resilient and adaptable financial plan capable of withstanding challenges and continuing to grow over time.

When it comes to preparing for retirement, Social Security often serves as the foundation of most Americans' retirement income. While it was never intended to be the sole source of income in retirement, Social Security remains a vital component in any comprehensive financial plan. Understanding how it fits into your retirement strategy and how to maximize its benefits can make a significant difference in your long-term financial security. The Role of Social Security in Retirement Planning Social Security is a government-administered insurance program that provides guaranteed monthly income based on your lifetime earnings and contributions through payroll taxes. For many retirees, it accounts for a significant portion of their income. According to the Social Security Administration, the program replaces about 40% of the average worker’s pre-retirement income. For lower-income earners, that percentage may be even higher(1). However, to build a stable and sufficient retirement income, Social Security should be considered one part of a three-legged stool, along with personal savings (such as IRAs or 401(k)s) and employer-sponsored pensions or retirement plans. As pensions are starting to phase out, items like an emergency fund or money market funds are becoming more and more important to help with budgeting and immediate expenses. Key Planning Considerations 1. Timing Your Claim Strategically One of the most important decisions in retirement planning is when to begin collecting Social Security benefits. You can start receiving benefits as early as age 62, but doing so will reduce your monthly benefit by ~30% permanently. Conversely, delaying benefits beyond your full retirement age can increase your benefit by up to 8% per year until age 70 (2). Factors to consider: Life expectancy and health status Employment plans after age 62 Need for immediate income vs. long-term income security Spousal or survivor benefits 2. Understanding Spousal and Survivor Benefits Social Security also offers benefits for spouses, ex-spouses, and survivors. If you are married, you may be entitled to receive up to 50% of your spouse's benefit, and surviving spouses may receive their deceased spouse’s full benefit if it is higher than their own. In retirement planning, it’s important to coordinate benefits between spouses to optimize household income, especially when one partner has significantly higher lifetime earnings. 3. Tax Implications Social Security benefits may be taxable depending on your total income. If your combined income (adjusted gross income + nontaxable interest + 50% of your Social Security benefits) exceeds certain thresholds, you could pay tax on up to 85% of your benefits. A tax-aware retirement income plan can help minimize taxes and stretch your retirement dollars further. With the ‘One Big Beautiful Bill Act’ now becoming law, from 2025-2028 seniors age 65 and older will get an additional $6,000 deduction to use on their taxes if their adjusted gross income is below $75,000 ($150,000 for married) (3). This new law will have an impact on whose Social Security will be exposed to being taxable and whose will not. 4. Inflation Protection One of the advantages of Social Security is that it is adjusted annually for inflation through cost-of-living adjustments. This built-in inflation protection makes it a reliable income stream in retirement and helps preserve purchasing power over time, something few private annuities or pension plans offer. Integrating Social Security into Your Financial Plan Incorporating Social Security into your broader financial plan requires careful analysis of your income needs, expected expenses, other retirement assets, and goals. A few best practices include: Estimating future benefits using tools like the SSA’s online calculator or statements from your "my Social Security" account. Running scenarios to test different claiming ages and how they impact long-term financial outcomes. Coordinating with other income sources to create a tax-efficient withdrawal strategy. Consulting a financial planner to tailor your strategy based on your personal needs. The Bottom Line Social Security is more than just a monthly check; it’s a critical asset in your retirement portfolio. Making informed decisions about when and how to claim your benefits can significantly impact your financial well-being over the course of your retirement. While you can't control market returns or interest rates, you can control your Social Security strategy. Used wisely, it can enhance your income security and provide peace of mind as you transition into retirement. Sources: 1: https://www.ssa.gov/policy/docs/ssb/v72n3/v72n3p37.html 2: https://www.ssa.gov/benefits/retirement/planner/agereduction.html 3: http://irs.gov/newsroom/one-big-beautiful-bill-act-tax-deductions-for-working-americans-and-seniors This is not an offer or a solicitation to buy or sell securities. Material is meant to provide general information and it is not to be construed as specific investment, tax or legal advice. The information has been compiled from third party sources. Keep in mind that current and historical facts may not be indicative of future results. Additional information, including management fees and expenses, is provided on our Form ADV Part 2, available upon request or at the SEC’s Investment Advisor Public Disclosure website, https://adviserinfo.sec.gov/firm/summary/123807 .

On July 4, 2025, President Donald J. Trump signed into law the One Big Beautiful Bill Act (OBBBA), a far-reaching tax and spending package that reshapes key components of the U.S. fiscal landscape. The legislation, extending more than 900 pages, builds upon the 2017 Tax Cuts and Jobs Act and introduces substantial changes across individual taxation, corporate incentives, federal entitlement programs, and national spending priorities. Key Provisions of the Legislation 1. Extension of Individual Tax Provisions The OBBBA makes permanent the reduced personal income tax rates initially established under the 2017 Tax Cuts and Jobs Act. The individual rate brackets (10% to 37%) and expanded standard deduction are maintained indefinitely, offering tax continuity for most income earners.² 2. Modification of the State and Local Tax (SALT) Deduction The legislation increases the SALT deduction cap from $10,000 to $40,000 for taxpayers earning less than $500,000 annually. This expanded deduction gradually phases out for higher earners and is scheduled to revert to its original cap in 2030.¹ 3. Introduction of New Deductions and Tax Benefits Several temporary deductions, effective through 2028, have been introduced. These include: • Tax exemption for tips and overtime wages² • Deductibility of auto loan interest² • An additional $6,000 deduction for senior citizens over age 65²,³ • Expanded child tax credits and tax-deferred child benefit accounts² 4. Estate and Charitable Giving Revisions The estate tax exemption is increased to $15 million beginning in 2026. Furthermore, the bill allows non-itemizers to deduct qualified charitable contributions, thus incentivizing broader philanthropic participation.⁴ 5. Corporate and Energy-Related Measures Corporate tax relief is expanded through the reintroduction of 100% bonus depreciation and targeted tax incentives for semiconductor manufacturing. Simultaneously, the legislation phases out key clean energy subsidies enacted under the Inflation Reduction Act, prioritizing fossil fuel investments and infrastructure.⁵ 6. National Security and Trade Adjustments The OBBBA includes provisions for increased defense spending and border enforcement, allocating $150 billion to each. Additionally, the bill introduces new tariffs and a 1% tax on international remittances.⁶ Distributional Effects: Beneficiaries and Those Adversely Affected Primary Beneficiaries: • High-income taxpayers, particularly in high-tax states, benefit from the SALT cap increase and the preservation of reduced tax rates. • Senior citizens, who gain from enhanced deductions and tax-free treatment of Social Security benefits. • Corporations and large businesses, which enjoy renewed tax incentives and regulatory relief. Groups Potentially Adversely Affected: • Low-income individuals, due to reductions in Medicaid funding (12–18%) and the imposition of work requirements for Supplemental Nutrition Assistance Program (SNAP) recipients, potentially disqualifying 10–17 million individuals. • Clean energy developers, as tax credits for renewable energy are curtailed. • Higher education institutions with large endowments, which face new taxation measures. Fiscal Outlook and Policy Implications According to the Congressional Budget Office, the OBBBA is projected to increase the national debt by approximately $3.5 trillion over the next decade. Federal revenue losses are estimated between $3 and $4.5 trillion, while the number of uninsured Americans is expected to rise by roughly 11.8 million.⁷ Conclusion The One Big Beautiful Bill Act is emblematic of the Trump administration’s policy priorities: tax relief for individuals and corporations, reduced federal social spending, and enhanced investment in defense and fossil fuel industries. While proponents highlight economic stimulation and tax certainty, critics raise concerns over regressive impacts, environmental setbacks, and long-term fiscal sustainability. As implementation unfolds, policymakers and taxpayers alike will closely monitor its economic and social consequences. Sources 1: https://www.mayerbrown.com/en/insights/publications/2025/07/one-big-beautiful-billact-introduces-significant-domestic-and-international-tax-changes 2: https://bipartisanpolicy.org/explainer/the-2025-tax-bill-additional-6000-deduction-forseniors-simplified/ 3: https://www.kiplinger.com/taxes/extra-standard-deduction-age-65-and-older 4: https://www.fidelitycharitable.org/articles/obbb-tax-reform.html 5: https://frostbrowntodd.com/one-big-beautiful-bill-act-cuts-the-powerphase%E2%80%91outs-foreign%E2%80%91entity-restrictions-and-domestic-content-inclean%E2%80%91energycredits/#:~:text=Introduction,orders%20as%20they%20are%20published. 6: https://armedservices.house.gov/legislation/one-big-beautiful-bill.htm 7: https://am.jpmorgan.com/wr/en/asset-management/liq/insights/marketinsights/market-updates/on-the-minds-of-investors/unpacking-the-obbbas-impact-onthe-us-economy-fiscal-health-and-more/

Our brief June monthly update on the markets and the economy.

Estate planning is a critical yet often an overlooked aspect of comprehensive financial planning. While many associate it exclusively with high-net-worth individuals or older adults, estate planning is important for anyone who wishes to dictate their assets to be distributed according to their wishes and their loved ones are protected in the event of incapacity or death. At its core, estate planning is the process of organizing and documenting one’s intentions regarding the management and distribution of assets. This includes not only the transfer of assets upon death but also the delegation of authority to make financial or medical decisions during one’s lifetime, should the need arise. What an Estate Plan Typically Includes A well-structured estate plan often consists of several key documents: Last Will and Testament: This legal document specifies how your assets should be distributed and names guardians for minor children, if applicable. Durable Power of Attorney: Appoints someone to handle financial matters on your behalf if you are unable to do so. Healthcare Power of Attorney and Living Will: Outlines your medical treatment preferences and designates an agent to make healthcare decisions if you become incapacitated. Beneficiary Designations: Often overlooked, these designations supersede instructions in a will. Things like retirement accounts, life insurance policies, and bank accounts should have updated and proper beneficiary designations. Trusts (when appropriate): A revocable living trust or other types of trusts may help avoid probate, provide tax benefits, or ensure that assets are managed and distributed over time according to specific instructions. The Consequences of Not Having an Estate Plan Without an estate plan, decisions regarding your estate fall to the state’s probate court system, which can result in unintended beneficiaries, lengthy delays, and significant legal expenses. For individuals with minor children, failing to name a guardian can leave critical decisions in the hands of the court, rather than in accordance with parental wishes. Additionally, incapacity without proper powers of attorney in place may require loved ones to petition the court for authority to act on your behalf, a process that can be both time-consuming and emotionally taxing. Why Estate Planning Shouldn’t Be Delayed Contrary to popular belief, estate planning is not a one-time task reserved for later in life. Major life events, such as marriage, the birth of a child, homeownership, or changes in health should prompt the review and update of an existing plan. Moreover, estate planning provides peace of mind at any age by ensuring that financial, legal, and medical matters are handled according to your wishes and not left to chance. A Collaborative Estate Planning Approach An effective estate plan is most successful when created in collaboration with experienced professionals. Working with both a qualified estate planning attorney and a financial advisor helps provide your legal documents align with your broader financial goals. This collaborative approach also helps minimize tax exposure, reduce administrative burdens, and provide clarity for heirs. Final Thoughts Estate planning is not simply about distributing assets. It is about exercising control, protecting loved ones, and creating a legacy. Taking the time to develop a thoughtful estate plan is one of the most impactful steps you can take toward long-term financial security and family well-being.