Hope your 2020 was
as successful as some of our readers
Our readers use
Vanguard mutual funds because they are low cost and well diversified. As you
can see, even though oil ‘tanked’, growth around the world more than made up
for the loss. Readers maintained their long-term
average of over 11% for stocks and thus this year of pain didn’t hurt them
financially. Most readers did not panic and sell in the March market
collapse. International
Growth benefited by its top 5 holdings: Tesla, ASML Holding, Tencent Holdings,
Alibaba, and MercadoLibre. Some readers held only Target
Retirement funds and still earned about 15%. This confirms this new
investment strategy of holding just one low-cost diversified balanced fund
during our working years. This is a simple but effective strategy. We avoid
paying a broker and thus avoid giving
up 63% of our potential long-term nest egg. We keep more by paying less.
2020 Total Return Fund Long-term
Return Longevity
18.4% 500 Index 11.3%
since 1976
-30.8% Energy 8.5% since 1984
32.2% Extended
Market 10.7%
since 1987
12.6% Health 16.1%
since 1984
59.6% International
Growth 11.6%
since 1981
17.3% PRIMECAP 13.8%
since 1984
19.1% Small Cap
Index 10.6%
since 1960
8.5%
7.4%
14.5%
15.9% Average 11.4%
*
*Average Annual Returns as of
Avoid broker charges: https://www.amazon.com/Best-Robo-Advisor-Ultimate-Automatic-Management/dp/1537111957
Two
Rich
got richer in 2020; poor got poorer: Two Americas grew farther apart. Another
800,000 filed for unemployment last week. Some have stopped collecting but
there are still 11-12
million collecting unemployment. The extra federal benefits will run out
this week. The other
Socialism in reverse: https://www.amazon.com/Americas-Socialism-Rich-little-people/dp/1535218584
You can continue to subsidize your child’s life
Several readers needed to know what the options are for making sure their kids will continue to have an income even after they, the parents pass. Today the standard option is to pay a lawyer to make a trust of some kind and pay to update it every year and pay federal taxes every year. Some of us are not willing to spend big bucks so we need to consider all the options. Most people have a will that leaves their property to heirs. Many readers used to plan to leave the money they don’t need from their IRAs to heirs outside their wills to beneficiaries. A primary would be a spouse and the secondary or contingent bene would be your offspring. This was our plan until Trump’s party changed the law in 2019 to eliminate the ‘stretch IRA’ as it was called. Some readers have chosen an annuity to keep paying their kids after they are gone. However, the annuitant, as the kids are called, can then cash it in—taking all the money out at once. This causes a big tax bill plus there will be no more monthly benefits to live on. Some of us in retirement are thus exploring a special low-cost immediate annuity that does not allow full ‘surrender’ as it is called. Some or all of the benefit each month will be taxable after you, the owner, dies but at least your heir cannot waste a lifetime income. You could convert the IRA to a Roth IRA, paying all the taxes up to that time and leave the future monthly income with smaller taxes. This may solve your problem of providing your heirs with a monthly income for life. Annuities are priced by current interest rates. Example: $500,000 from a Roth IRA invested in an immediate annuity will pay a 40 year old $1550 a month for life.
Consider: https://www.amazon.com/What-your-RMD-much-spend/dp/1718946716
Social Security
benefits are taxable: delay as long as you can
If you file an
individual tax return and your total income is between $25,000 and $34,000, you
may owe income taxes on up to 50% of your Social Security benefits. Earn more
than that, and up to 85% of your benefits could be subject to taxes. If you
file a joint return and your combined income is between $32,000 and $44,000,
you may owe taxes on up to 50% of your benefits. Earn more than that, and up to
85% could be taxable. Even municipal bond tax-free interest is used in the
calculation. The easiest way to avoid paying taxes on your SS benefits is to
delay taking benefits while they grow
at up to 8% a year. After age
70 they stop growing. You can also stop being employed. Others have found
that they can self-employ and use their business expenses to offset their
income. This is the method our president uses to take $
millions of income yet pay little or no taxes. His businesses show a loss
that offsets his income of all types. For instance, he “gave”
away the forest near his New York mansion and claims a deduction because he
said the land could have been worth $ millions if it was developed. You may not
have a forest to deduct but you can lower taxes in retirement using a legal tax
shelter.
Pay your fair share:
https://www.amazon.com/Pay-No-Taxes-Retirement-legally/dp/1507527977
Is buying stock in the next Apple directly right for you?
Regulators have just announced that we can cut out Wall Street bankers and buy the next Apple directly. No more IPO stock being sold only to the elite by Wall Street bankers. Wall Street controls who is offered the next explosive stock. However, in 2018, music streaming business Spotify Technology SA was the first major company to go public via direct offering. Direct listings had also been limited to companies wanting to give early investors or management the opportunity to cash out by selling stock. Cutting out the middleman has been a strategy for many successful consumer products like Tesla cars. Is buying an untested company stock right for you? This is a read gamble since new issues often rise quickly and then crash after insiders/speculators take profits right away. This strategy also assumes that you can research the company fundamentals quickly. As we all have learned, gambling is fun IF you win.
Invest wisely: https://www.amazon.com/Buffett-Bogle-Holy-Bible-Investment/dp/1523693045
If you are over age
70.5 your RMD for 2020 was waived.
If you already took an RMD in 2020, can you reverse it? “Technically, the distribution can’t be reversed,” says Schwab expert Hayden Adams. “However, according to new guidance from the IRS in Notice 2020-51, you can re-contribute the amount back into your retirement account as long as you do it by August 31, 2020.” Unfortunately, you can’t reverse the tax withholding, but depending on other factors in your tax situation, the IRS could refund the withdrawal when your 2020 return is filed. Your tax preparer will need to follow new instructions to do this. It might be easier to pay the tax on the few months you took your required minimum distributions in early 2020 since you may have had taxes withheld anyway. We must resume automatic RMD in 2021. We may resume deducting IRA contributions from income if you have earned income. With the (SECURE) Act there is now NO age limit on contributions as long as we have earned income (even self-employment income). Instead you can create a tax-FREE fund for your future by using the special IRS account: a legal tax shelter.
https://www.amazon.com/Trump-Tax-Shelter-Avoid-taxes/dp/1985448300
Tax prep for 2020 income is different
RMD
retirement income waived. Higher
standard deductions. Higher income tax brackets. Higher
contribution limits for (some) retirement accounts. Unemployment
compensation is taxable. Charity
deduction without itemizing. Higher cap on Social Security
payroll taxes. All income above $137,700 avoids the 6.2% tax so the more
you make the less you pay. All capital gains and dividends are taxed at lower rates than our earned income so
the more you live on dividends and gains the less you pay. Most high income
executives take most of their pay as un-taxed deferred compensation—usually at
lower rates. For instance, Warren Buffett with $86.8 Billions
pays only 17.7% in taxes
while his staff pay over 33.9% of their compensation. So the more you make,
the less you pay. Yet the millionaire
Congress denies helping most Americans during their hour of need after
providing one of the largest
tax breaks in history to the rich just 2 years ago.
Pay only your fair
share: https://www.amazon.com/Tax-Credit-Class-use-your-credits-ZERO/dp/1539462382
**********ACCOUNTABILITY**************
Like 1776, this
period is a test
of democracy—We
rejected the "American
fascist"
Our ‘Truth
and Reconciliation Commission’?
Healing
America begins with admission: 340,000 dead
Dictator’s advisor: “we
want them infected”
Dictator
sitting on 55% vaccine: 3,000+ die per
day
no stimulus, no unemployment, no eviction extensions
How Govt wastes our money: Our
Representatives gave 3.7 Trillion to the wealthy!
Millionaire congress ignores voters: WH does nothing; we pay for vacations; power plays
60% of GOP/Trump tax cuts went to the top 20%; the corporate tax rate slashed by 40%.
McConnell
decides not to help America’s poor/unemployed: GOP
ran deficit for rich but not us
Millions
go to food banks for 1st time: McConnell: Congress
has provided enough pandemic aid
Commander vetoes own defense bill so he can sue Twitter: no raise/housing fix for troops
Louie (the Bull) Gohmert (R-Texas) sues Pence to nullify Biden win: waste court’s time
Sen Hawley MO Trumpist to vote to nullify our votes: Trumpists try delay for Coup
Seat belt mandate in every state saves lives yearly: life you save with mask may be yours
Luke Letlow, GOP Louisiana, died of covid-19 : Pelosi praised service to country
Judge orders GA GOP to stop purge of Dem voters before senator elect re-vote:
SCAMS/SPINS:
Is
a pardon the same as not guilty? Gen
Flynn lied a lot: FBI: will
USSR clients pay him now?
Trump’s
“virus is hoax” was lie: 340,000 dead: Sen
Ernst, Graham ‘hoaxers’ took vaccine; Why?
Saudi
ruler sent woman
to prison for 6 years because she drove her car: Trump agreed
America:
world’s largest death dealer:
Domestic terrorists
occupy DC hotel ready
to help dictator remain in power in WH
Secret
Service agent switched out due to political persuasion: Biden has old team
back
Omni Financial caught
violating military allotment rules: fine no jail
Snow Teeth Whitening
caught
claiming protect against virus as well as dark
teeth
Miracle Farming caught raw apricot seeds or
kernels do NOT cure cancer: B-17 is fake
Tesla owners last
year cited an “alarming
number of car fires”: start spontaneously.
Home Depot ceiling
fans recalled: blades
could spin off while twirling
Chase ditches
Expedia for own Chase portal: book a flight
completely free using points
PPP
loan forgiveness rules changed twice: tell accountant to measure
twice, cut once
Review
529 plan rules change: 2017 tax
reform bill and Secure Act.
Recall dog food: Sportmix
pet food products cause illness/death from corn mold.
IRS: Easy Steps to Protect Your Computer and Phone and Avoid Phishing Emails.
IRS: Free special ID
protection PIN goes on your return so scammers
can’t take refund
IRS: Previous tax
returns available online: https://www.irs.gov/individuals/get-transcript
Is it a scam? Check AARP scamline 877.908.3360.
Check
IRS: https://www.irs.gov/newsroom/dirty-dozen-part-1-taxpayers-should-be-on-the-lookout-for-these-scams
https://www.irs.gov/newsroom/dirty-dozen-part-2-thieves-work-all-year-to-scam-taxpayers
Check Social
Security: https://blog.ssa.gov/
Safeguard data:
ConsumerReports help: https://securityplanner.consumerreports.org/
Jobs
Jobs in high demand:
IT,
accounting, financial, health care, education, training
Millions
out of work: unemployment up; shoplifting
up; burglary down
Who owns your account now?
Spend your FSA dollars before they die or carry over to next year.
Time to downsize vehicles: 3 best used: reliability, safety and long-lasting value.
Miracles:
Science finally
trying to limit our mosquito bite itch: how
do they find my skin?
Kids! Math and
playing Othelo
can keep you healthy: Kane Tanaka, turned
118 in Japan.
Good
events of 2020: former teacher used yard for small group of children Wildside
Academy
We can apply for
Medicare online: https://blog.ssa.gov/apply-for-medicare-online
We can apply for
Social Security online: https://www.ssa.gov/benefits/retirement/
We can apply for
health care online: https://www.healthcare.gov/
IAN
41 Watchung Plaza,
B242
973.746.2014
www.InsuranceAdvisorsNetwork.com
Alerts available at http://dankeppel.blogspot.com/
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