December Newsletter to Clients

Enjoy this month’s edition that features a review of November’s market returns, a notice of 2026 contribution limits and some advice to couples on how to discuss money. 

November was a bit of a roller coaster – lots of ups and downs but an ending in roughly the same spot. The S&P 500 index of large, U.S. stocks was down 4.4% near the end of the month before an end-of-month rally erased the losses and actually gained a bit. While it’s always difficult to surmise the motivations behind millions of investors making trillions of trades, the general consensus was that investors were wary of the economy, the future of Artificial Intelligence and the Federal Reserve’s plans for interest rates. Cuts by the Fed to short-term rates can help juice the stock market and, with stock prices relatively high, that may be the only catalyst left. 

Here are the results of key indices through the end of November:

•    S&P 500 – up 17.8%;
•    Russell 2000 index of small, U.S. stocks – up 13.9%;
•    MSCI EAFE index of international stocks – up 28%;
•    U.S. Aggregate bond index – up 7.5%. 

The IRS announced 2026 Contribution Limits:

•    Personal contributions to 401(k)s, 403(b)s, 457(b)s - $24,500. Employer matches are not included in this amount;
o    For those lucky enough to be 50 and over you can contribute an additional $8,000 to those accounts;
o    A new twist: for those 50 and over and who make more than $150,000, those so-called “catch-up” contributions must be made after-tax to the account’s Roth option. This is new under the Federal tax bill passed earlier this year. So, please call us with your questions on this;
•    Contributions to Individual Retirement Accounts (IRA) or Roth IRAs is $7,500;
o    Catch-up contributions for those 50 and over are $1,100;
o    Contributions to traditional IRAs and/or Roth IRAs are only allowed for those under IRS income limits so let’s discuss if those are allowed for you.

According to Fidelity’s “Couples and Money” study, one in four couples say money is their biggest relationship challenge, and 45% still argue about money occasionally. Below are seven questions designed for couples about to get married, but I think they can apply to married couples as well. We’re happy to help lead these discussions if you like:

1.    How would you describe your financial personality? Saver or spender, for instance?
2.    What’s your biggest financial success? Financial achievements are often tied to larger life goals.
3.    What’s your biggest financial failure? We often learn more from failure than success.
4.    What are your money fears? This can be really helpful in the planning process.
5.    How were you raised to think about money? Childhood experiences often shape our financial habits in adulthood.
6.    How should we structure bank accounts and bills after marriage? There is no one-size-fits-all answer but this question is good even for those who have been married for a while. 
7.    What do you want out of your money? Saving for a home, traveling or retiring early, this question helps align your goals with your plans. 
8.    Bonus question: Be sure to talk credit scores and any outstanding debt, including student loans. Once married, your debts are married too. 

Thank you for your continuing confidence.