Your Unbiased Advisor: Is a traditional 60/40 portfolio right for you?

Is a traditional 60/40 portfolio right for you?

Savers and investors who tell their advisor that they do not want to take excessive risk are usually given the 60/40 option—60% of their investments are in stocks and 40% are in bonds. If you pay an advisor to pick your stocks and bonds, this traditional portfolio may work for you and let you sleep through the night. When they quit working, their stock holdings are reduced to 30%. But what if you have not saved enough for the retirement you envision? Buffett has suggested a 90% stock 10% cash position for his eventual widow's retirement portfolio. This does not work for most of us since we don’t have the level of assets Buffett’s widow will have. Some of my readers operate on a LOW-COST 70/30 option in retirement since they have a balanced portfolio and large pension/IRA/SS income. Others have been lucky to rely on a “total return” strategy during one of the longest bull markets in history. They try to reduce their taxable income by buying non-dividend stocks like Buffett’s well-diversified firm with no commissions. They built emergency funds to pay for 2 years of expenses to survive a market drop. For most of us, the Target Date funds offer the best compromise for pre- and post-retirement portfolios. The key to success is low-cost funds or securities since we earn more when paying less.

https://www.amazon.com/Warren-Buffetts-Vanguard-Funds-Retirement/dp/1496148592

Should you invest 10% or 20%?

This is a constant question I hear. Answer: it depends. First, more savings is always better since we are living longer and the prices will be higher later. Talk of higher inflation is already moving money from bonds to stocks. Second, if we have time to invest (retirement is 5+ years away), we should be investing in stocks not bonds. Yes, the stock market has already gone up over the historical average of 11% per year but there is no alternative. Savings at under 2% per year will not even cover the price increases for one year let alone for our future. Third, given the historical inflation rate of 3%, we must invest in stock or balanced funds and the cheaper the better. There is no reason to pay 2% commission, fees, trading timing failures to someone who cannot guarantee inflation-beating returns. Most of us have not invested enough during out working years, so starting at 10% and increasing the percentage each time we receive a raise makes sense. Obviously, if your nest egg is low due to low returns or employment pause, you must increase it to stay on track for the future benefits of income. You can run simulations of your final nest egg balance and how long it will last here: https://retirementplans.vanguard.com/VGApp/pe/pubeducation/calculators/RetirementNestEggCalc.jsf

https://www.amazon.com/Your-Plan-Live-Age-100/dp/1548180793

Is AFLAC insurance right for you?

This pays you cash if your accident or illness is covered. You will not receive what you might expect given the premiums you have paid. The insurer pays claims at about HALF what you might expect to receive after your health insurer pays your medical bills. This is an insurance company and they determine how much your payout for an illness or accident will be. Not every situation is covered. For many folks, this is a “forced savings” product. That means you might be better off putting your premium into an emergency fund—a balanced mutual fund at low cost or high-paying bank CD. A disability policy that your employer pays means that the benefit you receive is taxable income to you.

https://www.amazon.com/dont-have-money-Financial-Emergencies/dp/1537636707

Will any of these 55 tax avoiders actually pay the 15% global tax?

The global minimum tax is a way to prevent large multinational corporations from shifting their profits to low-tax countries, such as Ireland (12.5% corporate rate) and Switzerland (8.5% corporate rate). Until now, this has been done by setting up subsidiaries in these tax havens. By maintaining a minimum tax rate of 15% in the vast majority of countries, there is virtually no place remaining (other than Kenya, Nigeria, Pakistan and Sri Lanka, which have not yet agreed to the rate) to shift profits to—particularly from intangibles (patents, trademarks, software, royalties on intangibles). Those who support the tax expect it will boost the global economy and incentivize multinationals to keep more profits—and the tax on them—at home. As it stands now, the tax would only apply to large multinational corporations. This means corporations with profits outside their borders exceeding $868 million. It would not impact the tax rate charged by the corporations’ home countries. Yet another layer of the global minimum tax is for the largest multinationals, with excess profits (profits in excess of 10% of revenue). The tax rate here would be 25%. The law has not yet been enacted by the U.S. So only the little people pay tax and the wealthy pay our Reps to keep it that way.

https://www.amazon.com/Americas-Socialism-Rich-only-little-people-pay/dp/1535218584

Wealthy folks avoid taxes by claiming dual citizenship in city, beach, mountains

You have your choice of 25 capitals and cities around the world where you can acquire residence through investment migration programs. The places are ranked according to 10 main categories that represent the most pressing relocation considerations: lifestyle, tax, education, real estate, health care, security, infrastructure and stability, as well as COVID-19 safety and the relevant investment migration program. All 25 locals are proactively welcoming foreign investors, and while some are clearly leading the pack, each has its strengths and particular appeal. And special companies will help you make it happen. Zurich, St. Helier, Lisbon, Rome, Monaco, Cyprus, Athens, Malta, Kuala Lumpur, etc. Avoid bad weather and taxes.

https://www.amazon.com/Your-Hidden-Wealth-Reserve-Reduce-Taxes/dp/1540435148

Is working as long as you can right for you?

One of the biggest regrets some folks have is not seeing their co-workers on a regular basis. Many say they plan to get together but somehow it never happens. The benefits of working, even part time, are many. Many feel lost in retirement since their lives revolved around their mates at work. ‘Friends for life’ is how they describe those they have seen for 5, 10, 20 years. Unless you are working in a coal mine or warehouse, you should stay connected to your network. 1^st health benefits of seeing your group and receiving health care benefits can’t be discounted. Working requires using your body parts. The old saying, “use it or lose it” is true for many retirees. You may enjoy many more years with family and friends when you are active. You don’t have to gym or golf or run to stay healthy according to new research. Walking is fine. 2^nd because you are called upon to make decisions—any decision—you will ward off the onset of some possible memory or dementia problems. You won’t get stuck watching TV, playing computer games or staring at the monitor all day. You may even increase your skills in case you want another career. 3^rd you can spend more money. In fact, adding more to your nest egg will provide you with peace of mind. Your SS benefits will be greater since every year you do NOT take benefits adds 8% to your payout. You can work and take extra benefits after your Full Retirement Age without penalty. After age 70, your benefits do not grow larger but they may have doubled from the amount you would have received at age 62. If you are still working and contributing to FICA after FRA, your benefits are recalculated each year. So instead of $1,463.80 a month you could receive $2,975.00. Eventually, you will have to withdrawal funds from your 401k, IRA, etc so you need to plan your spending.

https://www.amazon.com/What-your-RMD-much-spend/dp/1718946716

Can you live on dividends alone?

Some investors accumulate enough stocks that pay dividends they can live on them as retirement income. The list of so called Dividend Kings provides a broad selection of stocks with a solid history of dividend payments. You know many of these firms already: Coke, 3M, J&J, but there are many not well known. Now you have mutual funds and ETFs of these stocks. The downside to ever increasing dividend income is dividend tax. To become a Dividend King, a company must have at least 50 consecutive years of dividend increases. Because of that high standard, it likely doesn’t come as a surprise that only an exclusive list of firms make the list. In 2021, there are just 31 Dividend Kings. This strategy provides the value tilt to your portfolio—growth stocks are light on dividends. “Dividends can offset losses if the market is declining and help with inflation.”

Make your plan complete: https://www.amazon.com/Your-Retirement-Spending-Plan-enough/dp/1461084016

**********ACCOUNTABILITY**************

Like 1776, this period is a test of democracy—We rejected an "American fascist" once

Our Jan 6 ‘Truth and Reconciliation Commission’

“The coup is ongoing”

Sentence for overthrow government: free to do it again

Judge: “attack on democracy ... unparalleled in American history.”

GOP aided and abetted the coup attempt

Supremes: overturn 700-year tradition restricting weapons in public?

How Govt wastes our money:

Manchin cancels paid leave for family health: women have baby on lunch break?

Manchin demands getting his way or gut services and structures: coal pays $491,949