Your Unbiased Advisor: Guaranteed income for life at NO cost

Never bet against America

Warren Buffett: Never bet against America; nothing can stop this nation. The stock market is having a sale. Everything is reduced 13%-20%. In the past, almost every time the market was down, it came back up the next year:

2018 down -4.41% 2019 up 31.74%

2015 down 1.31 2016 up11.93

2011 down 2.07 2012 up 15.88

2008 down -37.22 2009 up 27.11

2005 down 4.79 2006 up 15.74

2002 down -22.27 2003 up 28.72

1994 down 1.19 1995 up 38.02

Unless you speculate, play the market, or time the market, you can put time and the Miracle of Compounding on your side. Over time, you earn 11% in a low-cost market index fund. And now you can make it tax-FREE for retirement.

You only have to be patient: https://www.amazon.com/Miracle-Compounding-Turn-day-into/dp/1470176513

Some economists predict recession

What kind of portfolio is best during our current special circumstances of recession and inflation and worldwide supply disruption? There is no easy answer so our best position may be to stick with a balanced mix of equities and debt. Most of my readers are sticking with the low-cost funds tracked by Vanguard’s Target Date offerings. Some retirees are relying on the blend of Vanguard’s Wellesley Income Fund with 60% bonds. Relying on low-cost investments makes sense since they prefer to limit their costs during a period of uncertain investment gains or losses. Some more adventurous investors are sticking with the 10 choice funds they have relied on for 10-20 years. We call them the Vanguard Top Ten. They include Energy, Health as well as large and small caps at a reasonable cost.

Low-cost beats high-cost: https://www.amazon.com/Vanguards-Top-Ten-mutual-funds/dp/150073909X

What is the minimal amount needed to get an advisor’s help?

In 2018, we needed help in creating a financial plan. We needed to know whether we would have enough money to fulfill our goals in retirement. We still had a mortgage so we wanted to know if we could stop working. Did we need to keep working to pay off the house? We needed to know if we would have enough income to live after retirement and take a vacation. We needed to know if the assets we owned would provide enough income from the IRS’ required minimum distributions. Since we had to take our RMDs and pay taxes on that amount each year, would we have enough to live on? Could we take out more for special events like a new car, vacation and emergency medical procedures? We interviewed three advisors in the area. We were declined by each because we did not have assets worth over $1 million. Advisors usually take 1-1.5% of your assets. They need at least $10,000 a year to answer our questions. I asked one what she recommended to get help with a plan. Luckily she told me about a financial planner nearby. We met and provided reams of financial information to the planner. She completed a respected software program that made estimates of our income and expenses to age 95. It showed the probabilities of making our goals and income and expenses each year. It provided the answers we needed. Probabilities are not guarantees so we kept our assets working for growth and income so that we maintain a margin of error in case there is a long recession. We paid less than a $1,000 for a 50 page plan and 2 face to face meetings. We are happy not to have to pay an advisor for the next 30 years: $300,000 saved for more vacations.

Avoid the fees: https://www.amazon.com/New-American-Retirement-System-ReserveTM/dp/1461030072

Tax deductions you can take to lower taxes

These are ways to reduce income and thus tax without itemizing. The standard deduction was increased to $12,950 for single taxpayers and $25,900 for married couples filing jointly. Charity cash gifts up to $300. Contributions to IRA for each of you up to $6,000 $7,000 for ages over 50. Contributions to Health Savings Account but you have to use a high-deductible plan. Student loan interest. Educators for supplies. Alimony for some. Self-employed health insurance premiums. Other deductions available:

Child tax credit.

Child and dependent care tax credit. ...

American opportunity tax credit. ...

Lifetime learning credit. ...

Adoption credit. ...

Earned income tax credit. ...

Some readers don’t take the IRA retirement deduction now so they can avoid taxes on their retirement income in retirement. They use a Roth IRA—a tax-FREE account for working people. They create a ‘Wealth Reserve’ for life.

https://www.amazon.com/Your-Wealth-ReserveTM-Tax-FREE-Investment/dp/1484954882

Guaranteed income for life at NO cost

Annuities cost a lot. There are 5 to 8 fees charged by an insurer and their agent to guarantee your peace of mind income. Most annuities will provide a monthly income for your life and your spouse. For an extra fee or higher cost, they will provide a COLA cost of living increase so that your purchasing power is not decreased over time. This is important since inflation of 3% can rob you of HALF your purchase power in 20-25 years. There are better solutions for maintaining a guaranteed income. First, Social Security will increase your income based on inflation rates. In 2022, recipients have an increase of 5.9% in benefits. If you waited to age 70 to start SS benefits, you have a very good low-cost annuity with COLA for the rest of your life. Second, if you have an IRA, pension, or other tax-advantaged account, you will be forced to take withdrawals and pay the taxes due each year. For most of us, this means taking an annuity-type payment stream for the rest of our lives. Because the amount is recalculated each year, over time the amount stays ahead of inflation since our principal is still invested. Third, for some, this means heirs can continue the income payments until the principal is exhausted. If your IRA, pension or other account has been invested with a large mutual fund family like Vanguard, you are receiving payments correctly calculated free of extra charges.

Go low-cost annuity: https://www.amazon.com/What-your-RMD-much-spend/dp/1718946716

Have you taught your child how to make tax-FREE money?

Make sure you teach your kids how to create wealth the easy way. My parents were not investors. At my first job, I had no clue which investment option to use for my 401k contribution and company match. The HR person told me to put it into the 'safe' stable value fund. That was the worst choice at my age I learned later when I got my securities licenses. If I had followed their advice I would have ended up with $150,000 instead of a Wealth Reserve of $877,233 about 33 years later. I have used this 'Wealth Reserve' as I call it to have funds to use low-cost insurance, to buy two homes and 5 cars with higher down payments or cash, and now to receive $2,500 a monthly in retirement supplement. Now your child can build an account that provides tax-FREE retirement income too.

Time is on their side: https://www.amazon.com/Give-your-child-leg-up-manage/dp/1096505355

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