Happy Friday! After sailing the Bahamas, I've returned to the work groove this week. The trip was awesome, and I had an amazing time with friends and family. This picture was taken at my favorite restaurant, Hope Town Harbour. It was such a beautiful town, and we saw many nurse sharks swimming around. Let's dive into a two-minute look at the economy, an interesting story, and a financial planning secret.
Economy – Recession Time!?
A big shock is that the real GDP for Q1 is expected to be negative, tracking at -2.8% growth. Even with troubling signs, this may not be the nail in the coffin that we are in a recession yet. First Trust believes the import surge (which hurts GDP) is driven by businesses front-running proposed tariffs. If this is true, it could dramatically reverse in Q2. On the positive side, many worries were calmed after BLS reported solid job growth of 151,000 in February compared to 125,000 in January. Unemployment rate barely rose from 4.0% to 4.1%. The stock market, which loves certainty, has struggled to digest the daily changing tariff news and economic data. Overvalued stocks have been hit the hardest this year as investors assess risk.
Interesting Story – BlackRock Bought Panama Canal Ports for $23 billion
BlackRock has bought ports on both sides of the Panama Canal for $23 billion. A consortium of investors led by the US investment giant struck a deal with Hong Kong, effectively putting them under US corporate control and fulfilling President Trump’s aim to rid the canal of Chinese influence. Trump has alleged that China operates the critical waterway. The transaction is BlackRock’s biggest infrastructure deal ever.
Financial Planning Secret– Why Some Retirees Avoid Roth Conversions (SS+IRMAA)
When our financial advisors help retirees consider a Roth conversion, we must weigh the potential impact on Social Security taxation and Medicare premiums (IRMAA). Converting traditional retirement funds to a Roth IRA increases your taxable income for the year, which could push more of your Social Security benefits into the taxable range or trigger higher Medicare Part B and D premiums due to Income-Related Monthly Adjustment Amounts (IRMAA). While Roth conversions offer benefits, you must weigh the potential costs of increasing your income.
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About the Author
Noah Schwab CFP® is a financial advisor in Spokane, Washington, specializing in helping retirees with 401k tax strategies.
- Fiduciary. No commission, no insurance products
- Offering investment management and financial planning
