Category: IMG Education Center

2023 Retirement Plan Contribution Limits

The Internal Revenue Service announced retirement plan contribution limits for 2023.

Rebecca Bitting, Trust Officer

As retirement plan investors will notice, the changes are more significant than in past years. First, the overall contribution limits for most retirement plans including 401(k) Plans, Simple IRAs, Traditional IRAs and Roth IRAs have increased. Second, the catch-up contribution limits of 401(k) Plans and Simple IRAs experienced a nice jump although Traditional IRAs and Roth IRAs remained unchanged.

If you have questions or would like more details, please contact our Certified Retirement Services Professional (CRSP), Rebecca Bitting at  563.388.2575.

Contact Rebecca: 563.388.2575

2023 Contributions
Elective Deferrals2023
401(k), 403(b), 457(b) Plans$22,500
SIMPLE IRAs$15,500
IRA Contribution Limits2023
IRAs (Traditional or Roth)$6,500
Additional "Catch Up" Limits2023
401(k), 403(b), 457(b)$7,500
IRAs (Traditional or Roth)$1,000
Roth IRA Compensation Limits 2023
Single$138,000 - $153,000
Married Filing Jointly$218,000 - $228,000
Married Filing Seperately$0 - $10,000

Deconstructing a Simple Estate Plan – Last Will & Testament

By Melissa Uzzell, JD, Vice President, Director of Fiduciary Services

A simple estate plan typically consists of a will, durable or financial power of attorney, health care directives, including a medical power of attorney and living will, plus perhaps a revocable trust.  This four part series will review the structure and purpose of these basic estate planning documents.  

Most estate planning starts with a simple will sometimes referred to as a last will and testament.  A will is a written declaration of how a person wants their property to be distributed after they die.  A will has no legal effect while a person is living but it must be established while a person is alive and cognizant of their surroundings.  The consequences of not creating a will are potentially a lengthy court action in which state laws would determine how property is distributed and who manages the distribution.

Fundamentally, a will is a legal declaration in which a testator designates an executor or personal representative to manage their property/estate until its final distribution, provides direction on how to distribute their property and to whom to distribute it.  The recipients of property under a will are known as beneficiaries, heirs and/or legatees.   

Depending on the maker’s location or jurisdiction, the required content and formalities of a will may vary slightly but usually include the following:

  • The testator clearly identifies themselves as the creator and that a will is being made (Last Will and Testament of ____________________;
  • Testator must be at least 18 years old;
  • The testator clearly revokes all previous wills and codicils;
  • May state that the testator has the capacity to dispose of their property (sound mind and body) and does so freely;
  • Nominates a person or corporate entity to be executor or personal representative;
  • Designates one or more beneficiaries which may be natural persons, a trust or a charitable organization but cannot be a witness to the will;
  • Signed and dated by the testator or signed by someone else in the testator’s name in their presence and at their direction;
  • Witnessed by two disinterested people whose signatures may be notarized.   

The body of a will may contain additional direction as to how property will be specifically distributed or held in trust for the benefit of the beneficiaries.  It may also contain clauses to help the executor or personal representative manage the estate after death.

Although it is not necessary to have an attorney draft and formalize a last will and testament, this is only one part of a comprehensive estate plan and the best practice is to work with a professional.  In the coming issues this year we will review and deconstruct the other core pieces of a simple estate plan.  Stay tuned! 

Questions? Contact Melissa at 563.388.2580.

In the Community – Humane Society of Scott County

Our Non-Profit Community Spotlight

Humane Society of Scott County

By Celina Rippel – Development Manager, Humane Society of Scott County

Since 1902, the Humane Society of Scott County (HSSC) has been helping animals in our community. What started off as an organization to promote and enforce humane treatment of horses, has evolved into a full-service animal welfare organization.

The HSSC is the only open-admission animal shelter in Scott County. That means, when there is nowhere else for a lost or homeless pet to go, the HSSC is there. Our mission is to help animals in need by providing shelter, adoption services, and support resources for our community with care and compassion. And while we love all the animals that come through our doors, our priority is to keep animals out of the shelter and with their families. 

Thanks to the support of our community, we continue to grow our programs and services to do just that. Being a private non-profit means that we rely very heavily on donations to care for the pets in our facility. Without that support, we wouldn’t be able to save as many animals as we do. Last year alone, we took in over 3,500 animals from our community! 

The generosity of others is vital to our success, and Northwest Bank’s Investment Management Group has provided financial management support to help sustain our organization. Our relationship with them has been extremely valuable to our current achievements and future. Their responsible and sensible approach to investing is reliable, and their communication is phenomenal. They have been able to turn our goals into actions, and we can’t thank them enough for their partnership.

If you’re looking to support pets in need, add to your furry family, or learn more about our organization, please visit our website at or stop by our facility at 2802 W Central Park Ave, Davenport.


Upcoming Events from our Nonprofit Partners

Mardi Gras Wags & Whiskers | Saturday, Feb. 18 |Keppy Hall at the Mississippi Valley Fairgrounds | Humane Society of Scott County

Let the good times roll at the Humane Society of Scott County’s Fundraiser, Mardi Gras Wags & Whiskers! Come ready to listen to some music, participate in our silent auction and raffles, vote for Dog & Cat King & Queens, and take photos at our decked out photo booth! For more information, visit 

Wishbone Ash | Tuesday, March 7 | Common Chord

The ever-popular British rock band returns to the Redstone Room. Wishbone Ash is one of the most influential guitar bands in the history of rock. The band’s signature twin-melodic lead guitar interplay has influenced such bands as Thin Lizzy, Lynyrd Skynyrd, and Iron Maiden. Visit for more.

Songwriters’ Circle | Friday, April 7 | Common Chord

Hosted by David G. Smith, Iowa native songwriter and frequent performer at Nashville’s acclaimed Bluebird Café, the Songwriters ’ Circle is an intimate evening highlighting the twin arts of songwriting and storytelling. Three singer-songwriters take turns sharing their stories and performing original songs in a semi-improvised roundtable format. 

Market Viewpoints – Winter 2023

Keith Bonjour, Portfolio Manager
Keith Bonjour, CFP® Vice President, Portfolio Manager

Inflation continued to show some signs of moderating during the fourth quarter of 2022 with the headline CPI reading falling to 6.5% in December after hitting a high of 9.1% in June.  The Federal Reserve dramatically raised the Fed Funds Rate throughout the year from a starting range of 0%-0.25% all the way up to a range of 4.25%-4.50% to end the year.  Expectations are that the Fed will continue to hike rates a few more times in 2023, but the hikes will be less sizeable, in the range of 0.25% or 0.50% each.  

The consensus is showing a peak Fed Funds rate of between 5.00-5.25% this year, but that could change depending on how quickly inflation moves downward, or if there are signs that inflation starts to increase in certain parts of the economy.  Both stock and bond markets had rough years in 2022 with the S&P 500 falling over 18% and the US Aggregate Bond index falling over 13%, resulting in the bond market’s worst year on record.

The stock and bond markets have both started 2023 with nice rebounds, however we expect volatility to remain elevated throughout at least the first half of the year.  Markets continue to monitor Fed policy and inflation closely, looking for signs of when the Federal Reserve will pause their interest rate hiking cycle.  

The markets have been on edge worrying that the Federal Reserve will be too aggressive and cause a larger than expected slowdown which could lead to a recession. The Federal Reserve still has a chance at a soft-landing where they slow the economy enough to significantly 

bring down inflation, but not enough to cause a recession.  However, the Fed’s history during significant rate hike cycles has shown they are not good at threading the needle for a soft-landing, and historically the Fed tends to over-tighten causing a recession. 

Expectations are that if the U.S. economy does rollover into a recession by the end of 2023, that it would be mild since unemployment remains low and consumer spending has remained resilient even in the face of rising prices due to high inflation.  The inflation data will be important to monitor as the year progresses since this will have a huge impact on Fed policy going forward.  

The economy should continue to slow this year as Fed policy tightening works with a lag.  Both consumer spending and a low unemployment rate have helped the economy avoid a significant downturn so far, but it will become more difficult this year especially if the Fed decides to raise rates more than their current projections.  

Company earnings remained resilient in 2022, as businesses were able to pass on their higher costs to consumers, but could come under pressure in 2023 if consumers pull back on spending and the economy continues to slow.  It is important to remember the economy and stock market do not operate on the same schedules.  The stock market usually bottoms well before the economy so while economic conditions may continue to slow for the near future, we will look for clues that inflation has peaked and begins to subside indicating the Fed is winning the battle. The Fed continued its aggressive rhetoric each time the market tried to rally last year, so markets will be watching for the Fed to tilt to a more accommodative posture, which will take pressure off the market and could lead to a sustainable rebound.

 We continue to be mindful of the risks that the market faces going forward from a more aggressive Federal Reserve possibly overtightening, sticky areas of inflation remaining elevated, company earnings coming under pressure, and continued geo-political risks. 

We recommend staying the course with your investment objectives with the understanding that markets go through cycles and both the stock and bond markets will eventually find their footing. 

We recommend communicating with us if any short-term cash needs arise so we can look for opportunities to be proactive when raising cash for any necessary distributions, helping to protect against possible short-term negative moves in the market.

Secure Act 2.0 Legislation: Interesting Changes for Retirement Plan Investors in 2023 and Beyond

During the last few weeks of December 2022, the government passed the most recent rendition of retirement plan legislation with “Secure Act 2.0”. With this law comes a number of changes for retirement plan investors. Here are modifications that caught our attention:

  • Required Minimum Distribution Age: The age in which retirement plan investors must begin annual distributions from their retirement plans has increased to 73 in 2023 and will be bumped out even further in 2033 with a beginning age of 75.
  • Catch-Up Contributions: Retirement investors age 50 (and greater), will see a number of changes to the rules surrounding catch-up contributions. From a positive perspective, (beginning in 2024) the catch-up contribution limits will be adjusted annually for inflation. Also on a positive note, (beginning in 2025) the catch-up limit will increase by 50% for those retirement plan investors age 60-63, however, a less desirable outcome of the Secure Act 2.0 is the requirement for catch-up contributions to be made on an after-tax (Roth) basis for those with income greater than $145,000. This change will begin in 2025.
  • 529 Plan to a Roth IRA: 529 Plan investors have an interesting solution for dollars remaining in their 529 Plans. They can complete a one-time rollover (up to $35,000) from an existing 529 Plan to a Roth IRA. One important note, the 529 Plan must be in existence for at least 15 years to achieve eligibility. The effective date of this change is 2024.
  • Qualified Charitable Distribution (QCD): QCDs have been permanent on the landscape since 2016. This option allow retirement plan investors to gift directly to a qualified charity from their IRA and avoid the tax consequences for the distribution. The retirement investor must be at least age 70.5 to qualify and the maximum annual amount has been set at $100,000 since 2016. The Secure Act 2.0 changes allow for the $100,000 cap to be indexed annually for inflation. Also, retirement investors are now allowed a unique QCD option by making a one-time contribution (up to $50,000) to a charitable gift annuity or charitable remainder trust.

For those of you that are existing clients, we will cover all of the changes that we feel impact you directly during our Annual Investment Review Meetings. In the meantime, if you have questions or would like more details, please contact our Certified Retirement Services Professional (CRSP), Cody Allen at 563.388.2622.

By Cody Allen, Senior Vice President

In the Community – Vera French

Our Non-Profit Community Spotlight

Vera French Community Mental Health Center

By Nathan Sondgeroth, JD – Executive Director (Vera French Foundation)

Thank you to our friends at Northwest Bank & Trust for giving me the opportunity to share some detail about the work of the Vera French Community Mental Health Center.  

“Vera French” is a family of non-profit Iowa corporations encompassing the Vera French Community Mental Health Center (the Center), the Vera French Housing Corporation (Housing), and the Vera French Foundation (the Foundation). 

Founded in 1949 as the Scott County Mental Health Center, our agency strives to be a center of excellence which collaborates with our community partners to advance mental health for all and deliver high quality, accessible, healthy living solutions.  In 1982 (two years after the retirement of our agency’s longtime Executive Director, Dr. Vera French, MD, PhD) the Scott County Mental Health Center was renamed in her honor.  Since our founding, our agency has always been (and continues to be) an independent provider of community-based mental health services to all who need them.  Vera French is locally governed by a volunteer Board of Directors who, through our CEO, oversee a team of over 200+ talented medical, clinical and behavioral health service providers. 

In 1985, the Vera French Foundation was created as a subsidiary of the Center to help spread compassionate awareness of mental illness in our community and to inspire generous giving. 

In 1994, recognizing that safe & affordable housing is a critical healthy living solution for people striving to recover from mental illness, the Vera French Housing Corporation was created.  Vera French Housing assists individuals with persistent mental illness obtain permanent, affordable housing linked with community-based mental health services.  Vera French Housing currently owns & operates 127 apartment rental units scattered throughout Davenport and Bettendorf.  By 2023, Vera French Housing will own an additional 14 units for over 140 within its real estate portfolio. 

More information about the work and programs of Vera French can be found on our website (  Many of these services, as well as the flexibility to create new programs to respond to our community’s needs, are possible in part through an endowment held and managed by Northwest Bank & Trust.  This endowment was created in 2017 through created through a generous legacy gift within a supporter’s estate plan.

Vera French serves thousands of our community’s most vulnerable each year.  As we go into the holiday season, we are grateful for the Quad Cities’ generosity to support community-based mental health services for all.  Thank you!

Wishing you a wonderful holiday season and a joyous 2023! 

For more information on any of our services, please visit

Upcoming Events from our Nonprofit Partners

Ridgecrest Foundation’s Annual Dinner | November 4 | Ridgecrest Foundation
Ridgecrest proudly presents their Annual Dinner at the Outing Club, which will help raise funds for the Koning Fund, providing final assistance to residents who qualify. The night will include a cocktail hour, dinner, presentation, and comedian. Contact Carrie Dreifurst to register or learn more: (563) 388-3431 or 

Special Needs Night | November 18 | The Family Museum
The Family Museum will open its doors after hours for an exclusive event for families with children who have special needs. Tickets are available at the Family Museum beginning November 1.

Reindeer Day – Sponsored by Northwest Bank & Trust Company | December 3 | The Family Museum
Celebrate the season with the Family Museum and two live reindeer! There will be games, crafts, performances, and the annual Pack-A-Police-Car Toy Drive.

IRS released Notice 2022-53 – Inherited IRA Distribution Rules for Non-Spouse beneficiaries

The passing of the 2019 Secure Act changed the rules starting January 1, 2020, as to when non-spouse beneficiaries must begin taking money from inherited retirement accounts.  Instead of stretching withdrawals over their lifetime, most non-spouse beneficiaries inheriting IRAs, with few exceptions, are now subject to a “10 year rule”, which requires that these beneficiaries have to have the entire balance of the IRA distributed to them in 10 years.

On October 7th, 2022, the IRS released Notice 2022-53 announcing that final regulations are forthcoming and will apply, at the earliest, to the 2023 distribution year.  The IRS has indicated that individuals affected by the new rules who failed to take RMDs in 2021 and 2022 will not be subject to the ordinary penalties.   While the changes have not been officially announced, based upon this notice, it seems likely to pass. 

Questions? Contact Rebecca at 563.388.2575.

A Change to Taxation of Retirement Income in the State of Iowa

Effective January 1, 2023, Iowa taxpayers will catch a break on the state taxes paid on “retirement income”. The new law exempts Iowa taxation on all “retirement income” for those who are disabled or 55 years of age or older. It also exempts retirement income received by a surviving spouses.

Retirement income includes, but not limited, to:

  • 401(k), 403(b) and Individual 401(k) Plan Distributions
  • IRA Distributions
  • Deferred Compensation Plans
  • Pensions (Government and Private)

Client Note: For those of you that currently request withholding Iowa taxes from your IRA distributions there will be several conversations that will need to take place prior to year-end. First, you will want to share a discussion with your accountant to determine how this change will impact your tax return. Second, we will want to chat with you to confirm the discontinuation of state withholding from your IRA distribution in 2023 and beyond. If you would like to discuss additional details regarding how this change impacts you please give Cody, or any member of our Investment Management Group, a call to discuss.

Questions? Contact Cody at 563.388.2622.

Market Viewpoints – Fall 2022

Keith Bonjour, Portfolio Manager
Keith Bonjour, CFP® Vice President, Portfolio Manager

All eyes remain on the Federal Reserve this year as the Fed’s fight with inflation continues to have a large effect on financial markets.  Global stock and bond markets continue to struggle this year as the Fed front-loaded rate hikes in an aggressive manner by increasing the Fed Funds rate by 0.75% in each of their last three meetings.  The Fed Funds rate is now between 3.00-3.25% with projections that they could increase to 4.50% or above by the end of the year.  The stock market has attempted to rally a few times in anticipation that the Fed may be getting closer to the end of their rate hike cycle.  However, the Federal Reserve has quickly come out with more aggressive policy rhetoric, which caused these rallies to reverse.

The Federal Reserve continues to highlight their desire for a more restrictive policy stance until they have seen a meaningful and sustainable reduction in inflation.  It seems as if the Fed is attempting to keep markets down until they feel they have inflation under control, for fear that a rebound in markets would increase consumer spending and go against their ability to reduce inflation.  The Fed does not have control over the supply side of the economy so in order to bring down inflation; they are trying to reduce demand by making borrowing more expensive and tightening financial conditions.  The Fed’s tools for fighting inflation have been described as blunt force instruments that cause many disruptions in markets.

                The cost of borrowing has increased dramatically this year with 30-year mortgage rates approaching 7% after starting the year slightly above 3%.  The same is true for business loans, auto loans, and credit card interest rates.  As the Fed increases the Fed Funds rate, these increases trickle through the lending system causing higher borrowing costs.  The Fed’s goal is to try to motivate businesses and consumers to reduce spending in order for demand to come down.  The Fed would also like to see less job openings and more job seekers in order to bring the labor market into balance.  The Fed does not want to see wage pressures continue to build since this also goes against their goal of reducing inflation back to more normal levels.  As wage pressures build, companies increase prices to offset these additional costs, which adds to inflation.

                The U.S. economy contracted in both the first and second quarter this year, and is projected to show only slightly positive gains for the remainder of the year.  So far, US company earnings have remained fairly strong as companies pass on higher costs to consumers.  The job market continues to remain hot and unemployment figures are low which is helping to keep the economy from tipping into a recession as consumer spending remains robust.  The Federal Reserve is in a difficult position as they try to slow the economy to reduce inflation, without tightening conditions too much to cause a recession.  The probability remains elevated for a potential recession by the end of 2024, however many deciding factors will be in play going forward. 

The stock market usually bottoms well before the economy so while economic conditions may continue to slow for the near future, we will look for clues that inflation has peaked and begins to subside indicating the Fed is winning its battle.  We are mindful of the risks that the market faces going forward from a more aggressive Federal Reserve, elevated inflation, continued supply chain issues, and ongoing geo-political risks.  We recommend staying the course with your investment objectives with the understanding that markets go through cycles and both the stock and bond market will eventually find their footing.  It is important to communicate with us if any short-term cash needs arise so we can look for opportunities to be proactive when raising cash for those distributions, helping to protect against possible short-term negative moves in the market.

Exciting Changes for the Investment Management Group

As many of you are already aware, we recently announced that the Investment Management Group is taking steps to become an independent trust and investment company. We are very excited about this change as it brings with it new opportunity for us to continue to grow and serve more clients in the Quad Cities region. While we will largely look and feel the same to our current customers, this change will help us reach more families that will find value in the investment management and estate planning services we have provided to the Quad Cities since 1969.

You are going to find for most circumstances, there are more things staying the same than changing. We will still have the same ownership, we will just have a new name, Tower Trust & Investment Company, and will no longer be a department of Northwest Bank. We will have the same expert staff, the same fee structure, the same investment philosophies and the same products and services we have now. We will have a new office in Illinois, but we intend to keep the same offices we currently have at the NorthPark Tower as well. So why make the change?

We have experienced a tremendous amount of growth over the last several years. In fact, we are now one of the largest local trust departments in the area. But we’ve found that people in the community continue to be confused about what a trust department does, and the advantages of working with a fiduciary. Many people don’t realize that as a trust department we can serve their retirement planning and investment needs. Or they think they have to be a customer of the bank to use our services.

This move allows us to reposition ourselves in the community – to allow those who are not currently our clients to think about us differently. Being an independent trust and investment company puts us in that perfect spot to highlight our investment and retirement planning abilities as well as the traditional trust department services, in which we manage the process of transitioning one’s wealth to the next generation. These are both very important pieces of your financial life – and we want the community to understand that we can do it all! Whether you have $150,000 nest egg to invest for your retirement, or a $150,000,000 that needs to be managed appropriately for your next generation, we have the expertise for both. We are here to meet all the phases of your financial life.

In addition, being independent of Northwest Bank will give us greater opportunity to pursue partnerships with other financial institutions and investment advisors that can be mutually beneficial. Becoming independent is a strategic move we have been considering for a few years, but the forward-looking changes happening within the bank made this an opportune time to make the move now.

Keep in mind, this process is still subject to regulatory approval. We have had very positive feedback to date and believe that we will officially become Tower Trust & Investment Company on January 1. This change will involve some very minor documentation with our current clients, which is currently in process. In general, it will be a very seamless experience. We will keep you posted on additional information as it happens. We look forward to celebrating the new business with you early next year.

By Cody Allen, Senior Vice President