Your Unbiased Advisor: What to do with your RMD: 17 alternatives

What to do with your RMD: How much will you spend?

Your RMD or required minimum distribution is the amount the IRS calculates for income tax purposes from your retirement accounts annually after your turn age 70½. You may want to invest part of it for the future or cut the amount in your IRA that you will pay tax on in coming years or contribute to legitimate charities. I help you answer these questions now: Will you have enough? How will you invest? How much will you spend? Explore 17 alternative uses of your RMD. Create tax-FREE income from your IRA while reducing future RMD. Take advantage of the miracle of compounding: $100,000 may become $500,000 in 15 years. Create an investment plan for 30+ retirement years. Self-insure and self-fund all your financial needs. Social Security to cut benefits in 2034 so you may need more income later. You have time to do something about the future.

The chickens have come home to roost: https://www.amazon.com/What-your-RMD-much-spend/dp/1718946716

Trump tax plan has NOT brought outsourced cash back for jobs in US

GOP gave corporate

America

a great deal besides cutting rates so actual rates are less than 15%. Apple, Microsoft, Google, Oracle and Netflix have removed from reports any mention of their overseas cash totaling $ TRILLIONS. Most corps have given their senior staff and shareholders BIG raises but have hired few new taxpayers. GOP’s new 15.5% rate on repatriated cash seems to have few payers. But if the $ Trillions are not tracked, how will we know if the special tax deal we must pay for is effective? We taxpayers will still have to pick up the slack since most corps don’t need capital or jobs here in US. Most will find their next decade of profits overseas so they plan to use the money there. Why pay 15.5% when they can pay 0% in most tax shelters. Apple hides their cash in Jersey, an island off

France

. I would keep my money in 0% tax Jersey if I could too.

Avoid paying for their taxes: https://www.amazon.com/Trump-Tax-Shelter-Avoid-taxes/dp/1985448300

Do you need a gift for your grad?

Best gift for your graduate: The Gift of a Lifetime.

Your monthly gift could provide your grandchild with real ‘social security:’ their own tax-FREE money. You take advantage of the miracle of compounding. Your gift becomes a $2,000,000 tax-FREE Wealth Reserve. You could reduce your taxable estate by $500,000 for each grandchild. Your grandchild will NEVER have to pay taxes on the money either. Social Security will exhaust its funds in about 2034. Every year you delay costs your favorite kid $100,000 later.

Start today: https://www.amazon.com/Give-your-Grandchild-$2000000-Lifetime/dp/1456433105

Are you eligible for Medicaid to pay your long-term care costs?

The way annuities can help with Medicaid eligibility is that they can transform otherwise countable assets, such as savings accounts, into a non-countable income stream, thus protecting assets for heirs while spending down what counts against you in Medicaid eligibility. You are essentially giving up your asset temporarily. So the annuity must be non-cancelable and non-assignable and name the state as beneficiary for at least the value of the Medicaid assistance received (exception for disabled child). Thus most annuities sold do not fit the requirement. You must obtain a confirming statement from the insurer to protect yourself. Typically it is a single premium immediate payout annuity. State law varies so use a qualified sales person. This strategy may not work for you since you won’t know for sure it works until you need it. Your spouse will not be made destitute in this process if you plan well.

Will you need insurance: https://www.amazon.com/Long-term-Care-Insurance-Updated-2013/dp/148274001X

How much are ‘reasonable’ advisor fees?

Again, it depends. How much is your advisor doing for you? Money management only costs 0.22% for a balanced (bond/stock) fund with a 40 year history of providing superior returns (9.4% a year). If your advisor is giving you financial planning services, including mortgage, college, tax and retirement funding, quality will cost you 0.30-0.50% of your <$1 million portfolio each year. If you just want periodic advice, pay $500-$2,000 an hour to a certified financial planner, depending on your needs. That way you pay as you go for professional services and leave the money management to institutions that know what they are doing. Investors not traders go for the long term rewards. If your advisor is asking you to move your money to another firm it is because they are getting a bonus up to $600,000 and you don’t want to be around as he has to make it to the firm next year.

Pay only for what you need: https://www.amazon.com/Best-Robo-Advisor-Ultimate-Automatic-Management/dp/1537111957

Why do you need 12 Energy ETFs?

The fact that every brokerage firm seems to be pushing its own commissioned index with annual fees up to 1% should not surprise anyone. But I am. Some 3 year returns are negative (-16%). Some don’t even have them. All earn less than the proven market leader with over 10% returns since 1984 and no commission and lower annual cost of 0.41%. If you know when energy prices will spike, which one of the 12 should you buy? Can your broker tell you when to sell? If you have insider knowledge, why not just buy the company stock? What about the gains from oil and gas company earnings? China seems to own the solar panel market. Is that your short- or long-term bet?

When your broker does NOT have answers: https://www.amazon.com/Vanguards-Top-Ten-mutual-funds/dp/150073909X

Can you time the market declines/risings?

Many studies have been done on this strategy. When you listen to market commentators and they talk ‘over weight’, ‘sector rotation’ and ‘moving to cash during the cycle’, remember they are getting paid very well at sounding good trying to predict the future ($1 million is better than fortune tellers). They are not actually doing what they talk about. Their wealth does NOT come from their ‘insight’ into market tea leaves but from entertainment TV sponsors. The reality is that timing and picking does not work. Look at one study ended 2015. How would you have done if you missed the market’s top-performing days, assuming you can’t predict the future? Your $100,000 investment would have reached $120,230 if you missed 25 days of the 7,300 days. However, if you were out for 20 days, then $148,698; 15 then $186,715; 10 then $238,637; only FIVE then $317,215. If you never left the market, then $478,171! Your money went up 378%! That’s about 8% a year nominal. $478,171 is more than $120,230. It’s time not timing!

Use the winning strategy: https://www.amazon.com/Money-Ball-Investing-Winning-unfair/dp/1548831409

Advisors are now allowed to sell you the worst products (best for them)

A court struck down Labor’s fiduciary rule so the DOL said it won’t enforce ‘prohibited transactions’. Sellers will go back to selling annuities to 90 year old widows as they did before. Lawsuits have been brought that allege that certain insurance companies and banks target elders and use scare tactics to pressure seniors into investing their life savings in deferred annuities, which can make the seniors’ savings inaccessible for 10-20 years, can carry exorbitant surrender charges and severe tax penalties, and can create complicated estate problems after death. Appealing, yet misleading, sales pitches to seniors often describe annuities as “guaranteed” and compare them to having money in the bank that is “safe” but pays a better return. Confusing language in the annuity contract often obscures the devastating fees involved if money needs to be withdrawn as the senior citizen ages. Additionally, many of these annuity products are sold by agents being paid significant commissions for such sales, creating a potential conflict of interest. Don’t settle for poor products. Use firms that put your best interests first.

Use the Best for YOU: https://www.amazon.com/Fiduciary-Rule-BEST-dont-settle-anymore/dp/1530980275

Is it worth making a financial plan?
People who make a financial plan are more likely to be ready for whatever our economy throws at them. Companies and their jobs can come and go in a very short time. Even though it seems that people who want to work can find a job in today’s market, our situation can change quickly. If there are tons of jobs in another region, can we just pick up and leave? Most people need time to adjust—move or find another job. This takes an emergency fund. According to a Schwab study, 65% of people who plan have one; 24% of non-planners do not have one. People who plan are less likely to live paycheck to paycheck. They feel financially stable. Making a plan does not require you to hire a financial planner or open a brokerage account. It takes just 2 weekends.

Make a simple but effective plan: https://www.amazon.com/Simple-Financial-Life-paycheck-paycheck/dp/1441499326

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Make

~~America~~

, “The Don” Great Again

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