Goods Inflation Continues To Fall, Services Inflation Elevated

Planned Solutions

In this episode of the Planned Solutions Incorporated Podcast, The US inflation rate declined slightly in January as goods prices continued to decline but services prices climbed. This will likely cause the inflation focus to shift from goods to services going forward as service prices will need to decline for inflation to return to its longer-term average. Within the services category, the cost of shelter is significant given the large percentage of household spending that goes to paying for shelter. Also, The Secure Act 2.0 made several changes to retirement plan catch-up contributions, including increasing the amount of the catch-up contribution for some savers. The amount of the catch-up allowed for IRAs will increase with inflation after 2024. In addition, in 2025 the catch-up will be increased by $10,000, or 1.5 times the normal catch-up amount, for those aged 60-63 saving in an employer-sponsored retirement account. And, Reverse mortgages have become more and more popular over the years as many homeowners seek to access their home equity to cover living expenses while continuing to live in the home and not having to make a monthly payment. However, the tax treatment of the interest that accrues on a reverse mortgage can be tricky as the interest is generally not paid until the home is sold and the tax deductibility depends on how the funds received were used. Plus a look at the Planned Solutions Incorporated Office Bulletin Board- The IRS finally provided guidance that State inflation relief payments, including the California Middle-Class Tax Refund payments, are not subject to federal taxation. In response to the storms that hit many parts of California in late 2022 and early 2023, the Federal Emergency Management Agency (FEMA) has provided an extension of time to file tax returns, make payments of tax due, and make retirement plan contributions from April 17th to May 15th for taxpayers who live or work in the impacted counties. Chase Armer's book- Financial Planning Insights is now available at: https://www.amazon.com/Financial-Planning-Insights-Decades-Planner/dp/1098306279?ref_=ast_author_mpb To subscribe to the Personal Finance Review (the written form of all the content we discuss on the podcast) please e-mail [e-mail] The Personal Finance Review is published and distributed on a biweekly basis by Planned Solutions, Inc. for informational purposes only. Please seek the advice of a qualified financial planner before taking any action. Planned Solutions, Inc.