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Photo: Getty Images/iStockphoto, License: N/A, Created: 2018:12:10 14:53:23

Photo: N/A, License: N/A


by Dave Gardner

Amid a sea of financial change and uncertainty, several of NEPA’s experienced retirement “shepherds” are urging their clients stay focused, and to focus less.

Wealth planning for 2019, according to, will unfold within a national economy that most experts agree is not yet ready to yield to inevitable recessionary forces. Forecasts call for overall economic growth to be solid on a domestic and global level, with only marginal slowdowns despite the realities of rising interest rates, stock market instability and Trump-sponsored trade wars.

The best way for investors to stay sane amid all of this global chaos is to downplay or even ignore the daily financial news, according to Lou Ingargiola, president of Ingargiola Wealth Management Group. He stated when an investor looks into 2019 and considers his or her retirement investment planning, he or she can be bombarded by 24/7 financial news from a wide variety of media sources, and Ingargiola has become concerned about how people react to the bombastic events being perpetually presented.

Hold fast

The reality of investment, according to Ingargiola, is that investment metrics rise and fall almost at will. They key to making money – and staying sane – is to hold fast to the concept that what goes down will come back up, provided the investor has a diversified portfolio featuring world-class companies.

“Yes, you can make small changes when needed as a company values rise and fall, but in reality, the true worth of a company does not change day-to-day,” said Ingargiola. “You have to look at the stock’s long-term value, and almost all of these numbers come back given time if they should drop.”

He personally witnessed how scores of investors abandoned their investments in the wake of the 2008 financial crash, robbing them of the potential to achieve genuine gains after the market inevitably recovered. For many of these retirement investors, the resultant scenario became almost tragic.

“This all comes down to what your goal is for investment and what type of plan you’re utilizing,” said Ingargiola. “If you have a quality world-class portfolio and you’re in the market for the long haul, stay with it and ignore these daily ups and downs.”

Retirement concerns also voiced by Ingargiola include the realities that federal debt is rising at an alarming rate fueled by Washington’s recent tax reform, and the fact that Medicare has been in financial trouble for some time and no action has been taken. Smart investment planners also must be wary of swinging oil prices that are causing petro stocks to be in a free fall, with the 24/7 media delivering news about the situation that mimics a roller-coaster.

“If you truly believe in capitalism then you also believe in long-term gains if a quality portfolio is maintained over the long haul,” said Ingargiola. “It’s acceptable to make a few adjustments to portfolios, but you can be assured the values will go up in the long term, and therefore to resist making snap judgements turn off the 24/7 news.”

Quagmire of changes

Washington’s recent overhaul of the federal tax code has created a “swamp” of new regulations and resultant questions requiring an attentive focus, according to Neil Trama, CPA. He acknowledged that the tax reform has lowered many taxpayer rates, especially for business, but Trama emphasized that it is vital for each tax case to be studied intently and handled individually.

According to Trama, while the standard deduction has increased, many individual deductions have been eliminated, potentially resulting in a zero-gain scenario with many returns. The eliminations of these deductions may also simplify the work needed for many returns, but Trama is skeptical that the overall tax process has been downsized.

“It’s vital to remember each situation is unique because of these new code changes,” said Trama. “Every return must be handled with care because the changes are quite sweeping, including the big adjustments to the business rates. I’ve been to three tax seminars already and there’s still lots to learn.”

One of the big questions involved in retirement planning includes whether to pay taxes on income now or later when a retiree’s income and rate may be decreased. According to Trama, the massive federal debt now being logged because of tax reform could force lawmakers to steeply increase tax rates in the future, and this possibility is adding a wildcard to the tax equation of pay now or pay later.

“It’s important to understand that, in many cases, income actually doesn’t drop steeply for many retirees,” said Trama. “This situation can cause a lot of confusion, but decisions have to be made by the taxpayer as they plan to retire.”

He added that the fallout from the 2008 financial crash hasn’t completely evaporated in the minds of his clients. As a rule, older people remain conservative with their planning, younger people without a functional memory of the crash may be more aggressive, and a select group of youngsters prefer to live for experience over savings.

“All factors considered, some people are going to gain from the tax changes, and some people will lose,” said Trama. “At the end of the day, what we’re left with is a more complex tax code that requires a sharp focus.”