Friday, May 28, 2021

Is getting paid to move your 401k right for you?

 

Are you paying too much for your 401k or 403b at work?

Most employers keep the fees hidden so many working people have no idea. Some think their pension plan is free. Larger employers must keep fees low since many have been sued for charging excessive fees and kickbacks to themselves. However, if you are working for a small or non-profit employer, you are probably being scalped. Depending on which investment option you have chosen in your plan, you could be losing money. Fixed (no loss) investments like stable value funds may earn 2% or less. If inflation is 2% as it is now, you are losing money. Worse, some non-profits offer pension plans run by insurance agents. My wife was losing money in her tax-deferred annuity plan and was charged a surrender fee when she tried to transfer it to a low-cost provider. Many plan participants are urged to invest conservatively when hired so their life-time nest egg hardly grows at all. You may end up with less than $200,000 instead of accumulating $500,000. John Bogle, founder of Vanguard, said “the tyranny of compounding costs” is overwhelming. You may be giving up 63% “of what you would have had.” If your contributions are matched by your boss, this may overcome the high costs. Otherwise you are better off using the IRS-approved tax-FREE account.

Pay less; earn more: https://www.amazon.com/Robbing-You-Blind-401k-fees/dp/1493588966

 

Why is it critical to start investing as early as possible?

Why are the rich getting richer during this time when so many don’t even make the minimum wage? Part of the answer comes from the idea of compound interest. Warren Buffett swears by compounding: “MY WEALTH HAS COME FROM A COMBINATION OF LIVING IN AMERICA, SOME LUCKY GENES, AND COMPOUND INTEREST.” For those of us who invest in order to have enough money for retirement, time is critical. Buy buying the stock of profitable companies, we can earn about 11% a year over time. The stock provides dividends which buy more stock. Because of profits, each share is valued at a higher level each year. These two combine to make the value of our money double in about 7 years. If we invested $9 a day for 40 years starting at age 20, our account would show $2.1 million. If we waited to start investing until age 40, it would cost $82 a day to reach that amount. Time investing takes the place of cash. The rich who already have $2.1 million at age 60 might have $4 million by age 70. If they had $4 million at the beginning of 2020 when they lost their jobs, they would have over $5 million now just by holding on to their low-cost stock index fund that increased by 45%.

Follow Buffett’s advice: https://www.amazon.com/Warren-Buffetts-Vanguard-Funds-Retirement/dp/1496148592

 

Will Biden’s tax increase on capital gains hurt or help you?

This question will come to you during the next year. Consider this: the rich don’t live on wages that are taxed like we do. Many use family money to buy assets like commercial buildings. As the assets appreciate, there are no taxes on the rents. There are loans. The loan interest is paid by the rents. The loans finance the lifestyles of the rich—homes, cars, planes, servants, etc. The loan proceeds are not taxable. They actually get an interest deduction on the money they live on. To buy a bigger building, they don’t pay tax on the sale like you would because the IRS thinks the new building is just an exchange. Some like Mr Romney set up partnerships offshore so the lower taxes paid by the partnership actually offset taxes owed on other income. He also exploited the IRA rules to delay taxation on the gains from the companies he launched at Bain. The wealthy pay less than HALF the taxes we pay. The rich use gifts to charities they create or control to offset income also. The wealthy employ professional tax advisors to reduce/eliminate their income and capital gains taxes. Some use offshore tax havens to avoid the taxes we pay. If you don’t have capital and profits, Biden’s taxes may reduce all our tax increases.

Reduce your taxes legally: https://www.amazon.com/Tax-Free-Living-2012-strategies-build/dp/1477452702

 

Is getting paid to move your 401k right for you?

Some financial service firms will pay you up to $3,000 to move your pension to their self-directed IRA. Why do you think? Good will? Charity? No, it is because they want you to pay their fees for the rest of your life and beyond. However, read the small print—you have to let them hold your $1.5 mil to get $3,000. Such a deal! Over the next 30 years of your retirement, you may pay them 1-2% which will be over $100,000 for an average size 401k. One of my readers shared his story: $500,000 IRA rollover which costs 1% a year over 20 years in retirement equals $100,000 in fees he gave up to his advisor. I helped him transfer his money to a low-cost provider which cost him $2,000 a year not $5,000 a year. Consider better options for you not your advisor.

https://www.amazon.com/Best-Robo-Advisor-Ultimate-Automatic-Management/dp/1537111957/

 

Best stocks to own for the coming years

When you look at your most recent investment statement you should be delighted. The stock market is up 45% for 1 year; 17% for 5 years; and 14% for 10 years. The long-term average is 11% before your advisor’s charges and fees. My readers are telling me that they are buying more Apple, Amazon, Facebook, Google, JPMorgan, Visa, Home Depot, and other large companies. They are avoiding crypto for now. They want to continue to enjoy the benefits of an expanding economy and they feel unsure about new trends. Most of my readers are investing for the long-term—retirement or retirement income for their future 20 or 30 years. Most of them are not fast traders. They take their IRS-required minimum distributions by withdrawing dividends and selling shares across the entire portfolio. They don’t know which stock to hold. The future of each stock price is unknown. They are planning to live to age 100.

https://www.amazon.com/Warren-Buffett-Your-Investment-Advisor/dp/1518690963

 

Is a 529 college savings plan right for you?

If your state does not match the Fed’s deductibility feature, you can open any state 529 plan. You pay no taxes on the earnings in your plan. You can open multiple 529 plans, and you can roll over your funds from one into another 529 plan once every rolling 12 months. Check the Morningstar Top 529 College Savings Plan Rankings. Utah and Michigan are top plans and pay bonuses. You can accumulate more in your plan by opening the account yourself—brokers take fees annually. You can set up the plan even before you or your adult children have a child. There are many options if the plan is not tapped right away for education for the intended person. Eventually, if you or someone else does not use the funds for an education, the plan is like an IRA—tax on earnings and 10% penalty. So you could use the plan to grow funds tax-deferred if you have maxed out your IRAs. Check options to pay for college: https://www.amazon.com/Education-Funding-Save-right-plan/dp/1482549956/

 

Minimize taxes on your retirement income

You found out that Social Security benefits are taxed—up to 85% of that income could cause you to hit the next tax bracket. A little planning can help you control when you are taxed on income in retirement. Unless you are really wealthy and can put most of your nest egg in tax-FREE municipal bonds paying 1%, you need a little knowledge to avoid the worst. The premium for the Medicare Part B program goes up at different income levels. If you try a Roth IRA conversion, you could trigger higher taxes on other income. Capital gains taxes are increased for higher income years. Reducing future IRA withdrawals (RMD) may be possible with a qualified charitable distributions QCD processed from your IRA. Control taxes: https://www.amazon.com/What-your-RMD-much-spend/dp/1718946716

 

 

Where is that refund?

The Internal Revenue Service reminds taxpayers that the most convenient way to check on a tax refund is by using the “Where’s My Refund?” tool at IRS.gov or through the IRS2Go Mobile App.

Where is the stimulus 1 or 2? If you did not receive stimulus 1 or 2, start filing here: https://www.irs.gov/newsroom/recovery-rebate-credit.

Stimulus 3? https://www.irs.gov/coronavirus/third-economic-impact-payment

 

 

 

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

 

 

Like 1776, this period is a test of democracyWe rejected an "American fascist"

 

Dictator steals reporter’s correspondence

 

Ted Cruz consulted by Jan 6 terrorist beforehand

 

When ‘Truth and Reconciliation Commission’? 

 

 

How Govt wastes our money:

Can the Treasury find the money of tax cheats? Congress will find new ways to help rich

Most Americans don’t want unemployed to receive extra $300 week:

Even if Biden finds source of COVID. it won’t bring back almost 600,000 dead

 

GOP reverses AZ vote on wealth tax: voter decision ignored; voter pays more taxes

 

SCAMS/SPINS:

California Auto Finance caught charging interest late payment w/o notice

AZ GOP using “auditor” that will find election count errors to ‘prove’ Trump Big Con.

Fake news circulated by conspiracy promoters to disrupt US life

 

Trumpists rewriting history of failed Coup: terrorist clubbed police to stop Congress acts

Trumpists planned Congress reverse electoral vote that day: not ‘riot’ or ‘insurrection’

Trumpists relieved Biden supports keeping Trump obstruction memo secret from public

 

Trumpist Green calls Pelosi mask protection like Holocaust mass killings of millions

COPS BEWARE: Texas allows anyone to use guns: no license, untrained, anyone!

Does Qualified Immunity rule attract bullies who like to beat people up?

 

Not for your kids: Vehicles that have a bad accident record

Ebay cars are for sale but not with Ebay guarantee: scams galore!  Better web sources

Scam: crypto is the hottest scam around: fake currency investment at a ‘discount’

 

Why firms pay ransom instead of using the file backup they already paid for

CEO pay jumped 16% in pandemic 2020 while average worker compensation rose 1.8%.

 

What the wealthy are buying now: diagnostic toilet replaces doc visits?

Budget Hearing Aids caught making false claims for products

Affection scam: get weekly pay to be lover is not real: empty your account results

 

Scammers Target Families Who Post Missing Persons on Social Media

Frontier Communications caught misrepresenting Internet speeds

 

Edward E. Matthes caught using fake investments promised high returns; 5 years prison

Emil Botvinnik FL caught churning clients’ funds to increase his income

Driver Loan caught misrepresenting the risks associated with their deposit product 

 

Phone apps that hog memory and drain battery rated

Work at home scams: it sounds easy but that is why it is a scam

Catholics may bar Biden from Host: his politics not God determine Heaven or Hell?

 

Wormuth confirmed as first woman Army secretary — then she was unconfirmed

 

 

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

IRS tips to avoid scams: https://www.irs.gov/newsroom/tax-scams-consumer-alerts

 

Is it a scam?  Check AARP scamline 877.908.3360. BBB Scam tracker

 

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

Find tax preparer: https://www.irs.gov/tax-professionals/choosing-a-tax-professional

 

Check Social Security: https://blog.ssa.gov/

Safeguard data: ConsumerReports help: https://securityplanner.consumerreports.org/

 

 

Jobs

Biden fills lost positions: Gov hiring: good pay, benefits, pension, no layoffs,

Job managers spend 6 seconds per resumes: write yours for those 6 seconds!

 

Who owns your account now?

Health care coverage affordable with ACA special enrollment to Aug 15

 

Miracles:

Microscope trick helps create pic of atom despite fact we can’t ‘see’ ‘particle’ atom.

We know atom components are not particles but energy clusters that move.

Why some people are limited: any amount of alcohol causes brain damage

 

Nine states now have 70% of adult residents with at least one vaccine shot

Blind regains some sight using special protein and a virus

 

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

MontclairNJ   07042

973.746.2014

www.InsuranceAdvisorsNetwork.com

Alerts available at http://dankeppel.blogspot.com/

 

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