Most likely, you’ve heard what’s brewing in Washington, D.C. regarding taxes.  It seems to be in the news every day. 

The Build Back Better Act, the $3.5 trillion budget reconciliation bill, or the Jobs and Economic Recovery Plan for Working Families, whatever you know it as you know it is a polarizing subject. 

Regardless of what name you’ve heard, one fact is clear: It is likely to be months before any action is taken. 

When bills are being worked on—especially one that’s this size—it’s a good time to take a quick Civics refresher. Right now, the bill is “in committee” with both the House of Representatives and the Senate. The committees are filling in the policy details and the exact financial figures, which can be a long process.

It will then be up to the House and Senate to vote on an identical version of a final bill—if both can agree to a final version.

Right now, it would be hasty to make any portfolio changes based on what’s being discussed and debated. An ambitious investor would have to guess at what policies will be in the final bill, estimate the financial impact, and determine what portfolio changes should be made. That’s a tall order.

One of the most difficult things to do when something seems to dominate the news is not react hastily.  It’s human nature to hope we aren’t the one left “holding the bag”.  We frequently get asked questions that sound similar to “So, have you heard (blank), what should I do about that?”  The answer more times than not is “How has it changed your personal situation?” Three things to ask yourself when you there are things like this in the news would be;

  1. Will it change my desired retirement date?
  2. Will it cause me to need to withdrawal more monthly in retirement?
  3. Will it affect my ability to stay on my current plan?

If you can answer yes to one of those three questions because of the news, it may be a good idea to reach out to your financial planner and update your financial plan.  Side note, if you do not have a financial plan this should be a red flag.  There are a number of reasons you should consider have a retirement plan in writing.  If you don’t have a financial plan we would strongly encourage you to begin constructing one.  If you aren’t sure where to start, we would suggest a phone call.  A simple phone call to us can help to point you in the right direction. 

So as difficult as it may be, an appropriate approach may be to wait and see. We work with professionals who are watching every twist and turn. If something starts to take shape, we will evaluate the impact.

We also understand that some of you may have concerns about whether your taxes are going to change. If that’s the case, please reach out. We would welcome the chance to speak with you.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. 


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