Welcome to 2025!

Happy New Year and welcome to 2025!

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We hope you and your family had an enjoyable holiday season. We are excited to see what the new year will bring.

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The year 2024 was filled with many significant events, but overall, it proved to be a good year for investors. Both interest and inflation rates started to fall, and while recession worries persisted, investors still enjoyed strong positive returns as major indexes reached multiple new highs.  Notably, the year ended on a high note in December as the Federal Reserve decided to reduce interest rates for the third consecutive time. They also indicated that further interest rate cuts could occur in 2025. While equities have advanced, 2025 brings a new administration, and historically, changes can make for an interesting year.

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‍We enter 2025 with a service goal of exceeding our client’s expectations and providing them with first-class service. We take pride in providing holistic service and our ability to fully understand and effectively respond to our client’s needs. We are thankful for the opportunity to work with them and want to extend the same service to you this new year. Please take the time to review the 2025 Checklist and call us if you’d like to take advantage of a complimentary financial check-up. We believe a proactive approach that anticipates the needs of our clients is optimal.

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In 2025, our clients will continue to enjoy the following services:

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• Client review meetings.
• Quarterly economic updates.
• Tax reports to keep them updated on proactive tax-saving opportunities and changes.
• Regularly scheduled information on timely and important topics.
• Consistent and meaningful articles on topics that directly affect them.

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Does your current financial professional offer these services to you?

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The new year will bring changes to monetary policy, including changes in tax laws that could affect your investment plan. Would you like us to take a second look at your financial situation?

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Please call us at (714) 597-6510 or email info@fanwmg.com for a complimentary financial consultation today!

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Looking ahead to 2025

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While there are many aspects to overall financial planning, the following are some specific topics we will continue to watch carefully as we head into the new year.

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• Interest Rates: Interest rate movements continue to be critical for investors. In 2024, the Federal Reserve began reducing interest rates with a long-term outlook of further reductions. For 2025, we will be watchful of interest rate movements and their effect on the economy and equity markets.

• Inflation: Inflationary concerns are important for investors. We saw a significant overall slowdown in inflation during 2024. However, there is still more to be done to reach the Fed’s 2% target range. We will continue to monitor inflation numbers as the 2025 data becomes available.

• Stock Market Valuations: Valuations are key predictors of equity returns. While we do not attempt to predict short-term valuations, we will continue to help you identify your risk tolerance and time horizons. We also understand that market volatility will continue to be a normal part of the investment experience, and we can help you use non-emotional behavior when making financial decisions.

• Our Clients’ Personal Situations: First and foremost, our client’s personal situations are always our highest priority. We are here to help them with any financial moves or concerns throughout the year. We understand that each individual and household has different goals and needs. We will continue our tradition of keeping our clients informed of any changes that we think may affect their personal situation.

We enter 2025 cautiously optimistic. Having a solid foundation and strategy is critical to the outcome of your financial plans. Revisiting your plan to keep it current is a sound practice we feel should be conducted on a consistent basis. Our mission is to provide our clients with guidance and support on their journey toward their financial goals.

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2025 Tax Law Potential Scenarios

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In 2025, there will be much discussion about tax law changes. Currently, the tax rules are automatically scheduled to sunset and change for 2026.  Here are three potential scenarios we could see this year.

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Extending the 2017 Tax Laws

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The current tax cuts are set to expire after 2025. Lower rates, larger standard deductions, and lower business taxes could prove to be hard to justify fiscally. Therefire, lawmakers could simply extend the current tax code for a few more years.

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Tweaking the 2017 Tax Laws

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During the presidential campaign, there was discussion about no tax on tips, possibly not taking overtime, and revisiting State and Local Tax deduction amounts. Lawmakers could possibly extend the 2017 laws with some modifications.

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A Complete Tax Overhaul

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Although it’s not likely, there is always the possibility that Congress revisits our entire tax system and makes fundamental changes to the existing system.

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Help us identify items that you would like addressed in the coming year!

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After reviewing this list, please call our office if you would like to discuss any items you have checked off. This will help us advise you in the most effective and proactive manner.

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• Do you anticipate changes to your investment goals?
• Has your risk tolerance changed?
• Have your 2025 income or savings needs changed?
• Do you plan to retire or change jobs?
• Will there be a change in your marital status?
• Do you plan to move, refinance, or sell/transfer a major asset such as a home or business?
• Did you recently receive or anticipate receiving a gift or inheritance?
• Will you have an y changes in your income needs +/- (i.e., vacation, assisted living needs, selling home, chile/grandchild assistance)?
• Do you expect any additional family members or dependents?
• Do you anticipate any additional dependents such as an elderly parent or other family member? Will they require assisted living?
• Do you have a child/grandchild you will be assisting with their educational cost needs through a 529 plan?
• Do you anticipate any major transfer of wealth?
• Do you plan on gifting to heirs or donating money to charity?
• Do you need to adjust your estate plan?
• Do you maximize your ability to use retirement plans?
• Do you want to explore converting a traditional IRA to a Roth IRA?
• Do you or a dependent family member have a severe illness?
• Do you anticipate any life, financial, or employment (retiring) changes that may require you to adjust your life and health insurance policies?
• Did you contribute to an IRA? If not, would you like to discuss contributing to an IRA before April’s tax deadline?
• Is there anything else we should know to help you plan for 2025?

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Important Birthdays

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• 50: Allows for catch-up contributions to IRAs and qualified retirement plans.
• 55: If you are retired, allows you to take distributions from your 401(k) without the 10% penalty.
• 59 1/2: Allows you to take distributions from an IRA, annuity, or other retirement plan without penalty.
• 60: Allows for start of widow/widower benefits from Social Security.
• 61-63: New extra catch-up contributions for retirement plans.
• 62: Allows for starting early Social Security benefits.
• 65: Allows for enrollment in Medicare and government drug plan.
• 66-67: Allows for full retirement benefits from Social Security.
• 70: Start date for enhanced Social Security benefits if you deferred claiming benefits previously.
• 70 1/2: Allowed to make a Qualified Charitable Distribution (QCD) directly from an IRA.
• 73: Mandatory required minimum distribution from retirement accounts must be taken no later than April 1st of the year after the year you turn 73.

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If you have an important birthday in 2025, please let us know!

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We are accepting new clients in 2025

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• Do you feel your advisor is fully aware of your financial situation? Yes. No. Not Sure.
• Are you satisfied with how your advisor is keeping you updated?  Yes. No. Not Sure.
• Has your advisor reviewed your tax forms to understand how to coordinate your investments with your taxes? Yes. No. Not Sure.
• Has your advisor discussed tax planning strategies that could help you keep more of what you make? Yes. No. Not Sure.
• Is your advisor updated and current on tax planning strategies?  Yes. No. Not Sure.
• Would you like a complimentary review of your financial situation?  Yes. No. Not Sure.

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If you answered No or Not Sure to any of these questions, we would like to offer you a complimentary private consultation with one of our professionals at no cost or obligation to you.

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Upcoming Events

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• ‍Tax Training Webinar | Wed, Jan 15 at 6pm‍
• ‍Tustin Saturday Retirement Classes | Feb 8 & Feb 15 from 8:30am to 1pm‍
• Tustin Saturday Retirement Classes | Feb 22 & Mar 1 from 8:30am to 1pm

• Mission Viejo Wednesday Retirement Classes | Jan 22, Jan 29 & Feb 5 from 6:30pm to 9:15pm
• Mission Viejo Saturday Retirement Classes | Jan 25 & Feb 1 from 8:30am to 1pm
• Tax Planning Webinar | Wed, Feb 12 at 6pm
• Investments Webinar | Wed, Feb 19 at 6pm
• Property Inheritance Webinar | Wed, Feb 26 at 6pm
• Social Security & Medicare Webinar | Wed, Mar 5 at 6pm

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Financial Advisors Network, Inc. is a registered investment advisory firm. The views stated in this letter are not necessarily the opinion of Financial Advisors Network, Inc., and should not be construed, directly or indirectly, as an offer to buy or sell any securities mentioned herein. Investors should be aware that there are risks inherent in all investments, such as fluctuations in investment principle. With any investment vehicle, past performance is not a guarantee of future results. Material discussed herewith is meant for general illustration and/or informational purposes only, please note that individual situations can vary. Therefore, the information should be relied upon when coordinated with individual professional advice. This material contains forward-looking statements and projections. There are no guarantees that these results will be achieved. All indices referenced are unmanaged and cannot be invested in directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.

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The S&P 500 is an unmanaged index of 500 widely held stocks that is general considered representative of the U.S. Stock market. The modern design of the S&P 500 stock index was first launched in 1957. Performance prior to 1957 incorporates the performance of the predecessor index, the S&P 90. Dow Jones Industrial Average (DJIA), commonly known as “The Dow” is an index representing 30 stocks of companies maintained and reviewed by the editors of the Wall Street Journal. Past performance is no guarantee of future results. CDs are FDIC Insured and offer a fixed rate of return if held to maturity. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed.

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There is an inverse relationship between interest rate movements and bond prices. Generally, when interest rates rise, bond prices fall and when interest rates fall, bond prices generally rise. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

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