Your Unbiased Advisor: RMD

Showing posts with label RMD. Show all posts

Friday, January 6, 2023

Find more cash

Finding more cash in 2023: fight recession

Being frugal can be fun. Your goal is to see how much you can save to protect yourself from any emergencies. For instance: Shop for less expensive car insurance. We saved after GEICO raised our premium for 2 cars and Umbrella liability by $230. Ask your cable guy to cut out what you have not been using. Do you still need whole life insurance if the kids are gone and you have a retirement fund? Invest your $3,000 tax refund. Stocks are on sale: 20% discount from 2021. Consider using low-cost index funds since your advisor/broker may be costing you up to 63% of your long-term accumulations. Paying 0.04% per year on your $500,000 portfolio instead of 1.5-2% means saving $10,000 a year; over $200,000 over 20 years. Is your mobile phone costing you more than $125 a month? There are less expensive alternatives. Slow cooker pot roast or meatloaf a week’s dinner at $20 total. Instead of buying a new car which loses HALF its value in the first 3 years, find your model in the used car section. Save $250 a month ($3,000 a year) in finance charges.

Save $3,000 a year: https://www.amazon.com/Insiders-Guides-Discount-Financial-Services/dp/143480593X

Why everyone should have two IRAs

Even if you have a pension (401k, 403b, DB) at work, you have more benefits and flexibilities with the IRAs. You can take deductions on your taxes or take monster gains in retirement tax-FREE. You could take the contributions for an emergency or starter home or education free of penalty. You can make contributions without age limit as long as you have income. You could create a legacy tax-FREE like life insurance or a retirement fund supplement. You could create an large fund for your non-working spouse. You could earn tax credits for your contributions. There are no required minimum distributions for one IRA. You can use much lower-cost mutual funds. Cost is the best predictor of investment success. You don’t need a will or probate to pass on your funds to any beneficiary.

Begin Jan 23: https://www.amazon.com/Robbing-You-Blind-401k-fees/dp/1493588966/

Make sure your child learns how to invest the Buffett Way in 2023

Since it is difficult to predict your child’s future financial success, you can give them a foundation on which to build. The most important lesson of those living in retirement is that starting investing early makes life more secure. Since automatic investing from your checking account makes it easy to invest a small amount each month, begin by having $100-$250 sent to your low-cost mutual fund provider. Low-cost tax-FREE accounts mean you don’t waste your money paying commissions, fees, or taxes. Your kid’s account grows on 100% of your contributions. Investing $100 a month can grow to $1/2 million in 35 years using a 500 Index fund. At $250 a month, they have $400,000 in 25 years. Use a special investment account and they don’t give up 63% of their total accumulations. No income taxes mean they can keep 22% more.

Start here Jan 3: https://www.amazon.com/Give-your-child-leg-manage/dp/1096505355

Just don’t sell: if your accounts are down, you don’t have a loss till you sell

You only have a loss in your account if you sell. You don’t need to sell if you are invested for the long term in a balanced portfolio or fund. Look at the returns of the stock market over time here: http://www.moneychimp.com/features/market_cagr.htm. For the long-term investor, the stock market index has returned 11% per year. Even with loses of 37% in 2008, we have offsets of 32%, 22%, 38%, 28% gains in other years. If you pay 0.03% in annual fees, you compound your investments so that you end up with 10 times your total contributions over time. Yes, it takes time. We are investing in solid companies not gambling. We are not trading in and out from one HOT stock to the next. This activity costs more than it is worth unless you have insider information like our Congress people. So automatically investing $250 a month, $3,000 a year (average tax refund), $102,000 total in a low-cost stock market index can provide $1,111,555 in 34 years. This is Warren Buffett’s investment advice for the rest of us.

Start now: https://www.amazon.com/You-Beat-Wall-Street-professionals/dp/1986031373

You too can pay only $750 income taxes just like Trump

How did a millionaire Super Con Man pay only $750 on his income for federal income tax return? We now know that if you claim un-audited huge business losses, you can pay nothing to help the nation provide all the benefits as an American citizen. Plus you pay nothing for hundreds of secret service agents to protect you and your family, 2 well-stocked jumbo jets, 50 SUVs, 3 helicopters and rent in two big houses. You can use the idiosyncrasies of the US tax code to do the same. You can deduct everything you touch even your hair spray as a business expense loss that you can offset your income from pensions, SS benefits, and over a $million in tax-FREE income.

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

Retirement plan contributions increased

People can also put more money into tax-advantaged retirement plans in 2023. The amount that can be contributed to workplace savings plans such as 401(k)s is now $22,500, a $2,000 gain from 2022, and the amount of allowed “catch-up” contributions for savers age 50 and older now stands at $7,500, up from $6,500. Your 401k 403b contributions can cut your current taxes—you postpone them till retirement. On the other hand, the Roth version allows all your future gains to be tax-FREE. You lose the deductibility of current contributions but you gain the much larger tax benefit in the future. $22,500 invested in stocks for the long-term Roth means you can spend over $5 million in 30 years completely tax-FREE. It is time not market timing that allows your money to compound at 11% with little cost.

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

Tell your child, “You don’t need an advisor” to earn $1 million

“A blindfolded chimpanzee throwing darts at the stock listings can select a portfolio that performs as well as those managed by experts.” So says Princeton economist Burton Malkiel 50 years ago. Warren Buffett agreed and bet $1 million on the Vanguard 500 Index to beat 5 hedge fund managed by an advisor. “The future is inherently unpredictable.” That is why cost, not market timing or trading stocks or Wall Street gurus can beat a low-cost stock index fund earning 11% over time. Dr Malkiel admits he dabbles in stock picks for fun but the majority of his portfolio is still in the index.

Have cake and eat it too: https://www.amazon.com/Where-can-your-child-invest/dp/1492164240

How to make your retirement account last as long as you do

Your advisor/broker has probably made the usual projection, concluding that you must buy an annuity from their firm. You have resisted because losing control of your nest egg makes all of us cringe. There are other ways we crack more eggs than we should during retirement. So we lose the power to compound higher amounts we will need. Many of us will live longer than we think. Ignoring health concerns now can cost you more later. My readers are holding onto expensive life and disability insurance plans that they will never use. They may cling to their legacy home after the kids have already decided to live elsewhere. Other readers are using pricy drugs instead of effective generics. Some readers still believe that bank CDs and bonds are the only securities to own as they age in a volatile market. A balanced portfolio into retirement protects us from failure. A few readers have taken higher distributions than they needed from their retirement accounts. They are keeping their kids in the lifestyle they have assumed. My readers are very charitable: they give to everyone who asks instead of committing to a certain percentage of their income annually. This dilutes the effect of their giving. Better to support one or two important causes. Giving to all reduces future growth for important charities.

https://www.amazon.com/Not-Buy-That-Annuity-Guaranteed/dp/1466494573

?**********ACCOUNTABILITY**************?

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

The Path to Dictatorship: 2010-2030

Parallels of this era in the past may hint at our future: democracy breaks apart legally

Jan 21 2010 Corporations’ election-spending unlimited

Billionaires paid $881 million for votes in 2022 midterm elections

Nov 2020 Wealthy discredit election process

Nov 21 2020 Trump’s Plans for a Coup: criminal

Nov 21 2020: Trump plan: US Marshals seize voting machines

Jan 6 2021 Direct assault failed: guns & bombs ready

Trump engaged in a "criminal conspiracy" to stop Biden

“I don’t f—ing care that they have weapons”

Trump was “detached from reality”

Trump used mafia-style intimidation on the defenseless

Trump still terrorizing election woman

Parscale: “a sitting president asking for civil war.”

Trump: “Just say the election was corrupt and leave the rest to me”

GOP fascism: “RINO hunt armed; no bagging limit” J6 comm threat

Trump’s Supremes END personal rights & state laws except for weapons WMDs

Fascism: GOP to stop women leaving state for abortion

It’s not a court. It’s a junta: Two Americas

Trump: President Biden is 'enemy of the state'

Christian Nationalist Party (CNP) replaces GOP

Nov 8 2022 Trump’s “national revolution” failed

Nov 15 2022 Trump announces for 2024 to avoid lawsuits

Dec 3 2022 Trump: cancel Constitution rules so ‘I win’

Jan 2025 Dictator pardons himself: his Supremes agree

How Govt wastes our money:

Congress people retire to more lucrative job: making laws favor private firms: $ millions

Santos: GOP paid con man to beat NY Dem by lying just to switch a Dem seat in House

GOP to stop investigating GOP Reps’ bad behaviors: no jail for Trump’s Jan6 enablers

How Trump worked tax law to pay next to nothing in some years despite AMT min. tax GOP To Cancel Staff Unions: GOP makes the rules now: anti-American

We lose; wealthy gain: Taxing income only to $160K for Social Security leaves it short

House stopped working: no business; no bills passed; no decisions but we still pay them

Stay safe: IRS will not be auditing major tax avoiders under GOP: poor audited 5x more

Gun detectors outside House floor disappeared under the new Republican majority

SCAMS/SPINS:

Wild West in AL: you can pack without permit or background check. Concealed guns

SCOTUS mistake: “A well regulated Militia”: these mass killings NOT by militiamen!

Regulator FDA helped drug maker Biogen get quick OK for Aduhelm at $56K/year

Washington elite proves TWO Americas: voter fraud: elite gets no charge; poor gets jail

IRS data prove TWO Americas: highest earners pay lower taxes than the affluent do.

Recall 42,000 Beetles: they have potentially dangerous Takata air bag inflators: bags kill

SCAM: iRobot’s Roomba J7 series robot vacuum caught taking pictures of you on toilet

Megan Hess CO caught fraud: selling body parts without permission: 20 yrs jail

Peloton caught failure report hazards: fine no jail for people/pets pulled under treadmill

John Lopez caught fraud: promised clients his 'algorithm' guaranteed 10% returns: jail

Proud Boys go to trial on sedition charges: coup sedition instigators go free

Credit Acceptance caught lying cost of credit; trick into high-cost loans on used cars.

Chase caught suing borrowers: deceptive affidavits and other documents “robo-signing”

Oil up last month; gas up this month: drillers screwing Americans for ’22 bonus payouts

1 lb butter up .50 cents in one week at my superstore: is dairy making more or grocer?

Fewer cars, bigger profits: prices rise for new: electronic/gadgets send us back to dealers

Jobs

26 Work-From-Home Jobs That Pay $100,000

New House Speaker: Top Con Man Trump, de facto head of the GOP already

Who owns your account now?

POSTPONING TAXES: SELL NOW, PAY LATER

You can postpone taking RMDs longer but that could mean greater tax bills later

Federal Reserve shows people used cash for only 20 % of purchases in 2021.

Miracles:

Christian nationalism overlaps provides cover for white supremacy: Jesus was not a racist

Alaska’s Arctic Waterways Are Turning a Foreboding Orange: global warming warm up

Alex Rodriguez finished shoveling own driveway?: large area, shovel sticker new maybe

No ’22 bank robberies: Denmark reported cash use had almost halved from 2017 to 2021

Our Universe is Mind-Blowing

Light is both a particle and a wave depending on how we look at the light.

I don’t think that there is any such thing as a position or a velocity of a particle.

Everything (galaxies to stones) in universe made of subatomic energy ‘vibrations’

A subatomic ‘particle’ is the smallest possible vibration (quantum) of a quantum field.

Mass–energy equivalence: E=mc^2. At the smallest level; Everything is moving a little

Energy into matter: scientists converted light energy directly into matter in one step

Physics Nobel Prize: “entanglement” 2 particles share info instantly at a distance

“It may be that gravity and quantum mechanics are exactly the same thing,” Leonard Susskind

Gravity might induce the collapse of quantum vibrations into 1 quantum state—our world

There is no TIME at this level because of force fields come and go in all directions.

Universe expanding: events may not come together like they did before.

Inside protons, neutrons, it is the fields of the virtual particles that creates its mass.

Gold made from neutron stars: collisions produce more neutrons:79 protons,118 neutrons

The proton is so complicated science still finds new energy entities/forces every year.

“Empty space is a boiling, bubbling brew of virtual particles that pop in and out of existence in a time scale so short that you can’t even measure them.” Space expanding.

The electricity we use comes from the field around the wire not from election itself.

Scientists build 'baby' wormhole as sci-fi moves closer to fact: inside quantum computer

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

973.746.2014

http://www.theinsidersguides.com/

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

Cancel: 'remove me' to admin@theinsidersguides.com

Friday, September 23, 2022

new advisor/broker rules

Your RMD will tell you how much you need in retirement

When you save for retirement in a 401k, 403b, IRA, or other deferred taxation account, you will need to pay the tax when you retire using IRS rules. The required minimum distribution (RMD) will be about 4% of your total of all your deferred account balances every year beginning at age 72. The formula recalculates each year based on your previous year’s balances and your rising age. Your mutual fund company or broker will do the calculation so you don’t get a penalty for a mistake. However, to answer the question how much do you need to save, you can use this handy AARP calculator. https://www.aarp.org/work/retirement-planning/required-minimum-distribution-calculator.html. Here is an example: If you’re 72, for example, the distribution period is 25.6 years, based on the US life expectancy. Then divide your balance by the distribution period. Let’s say you have a combined $100,000 in your tax-deferred retirement accounts. $100,000 divided by 25.6 is $3,906.25, which is the amount you must withdraw annually. If you are in the 25 percent combined state and local tax bracket, you’ll owe $976.56 in taxes on your RMD. The tables change as well as the US life expectancy, so don’t use this calculator to determine your RMD for yourself. You can take your RMD out of one account, or take bits from each one, so long as you withdraw the required minimum. You can take more.

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

It can’t get much worse

The S&P 500 growth-leaning stocks are down 22% YTD. If you are concerned you should buy this index in a low-cost fund since over most history, this index has regained its strength within a year. The exception was 1973 when the whole banking system collapsed. We don’t have that imbalance this time. The stock market has fallen back to the level it was in March on 2021. More likely the high employment and thus consumer demand will help provide impressive future returns. The alternative is taking your losses and moving money to 3% CDs for 15 months. No one knows for sure so when your brilliant advisor suggests an alternative be sure to query their analysis. Keep in mind that low-cost index returns have been tested over time: “In every single time period and data point tested, low-cost funds beat high-cost funds.” That goes for every sector of the economy too.

It’s your money: https://www.amazon.com/Best-Predictor-Investment-Success-Cost/dp/1502524082

Ideas that wreck our investment success

“I hold on to losing stock because I must wait to recover my losses.” This means we are too emotionally attached to a fantasy. “My stock pick rose 10 days in a row. I’m a genius picker.” This means you had beginner’s luck and look out! “My pick’s success prove that my next one will also be a success.” This means your luck is derived from a growing market where all boats rise with the tide. “My picks were also chosen by the Journal. I must know something about picking winners.” This coincidence means another of the millions that follow stocks saw what you saw. “My last 3 picks have been losers so my next pick will win.” This means you are a gambler not an investor. “I got a bonus at work I did not expect so I am blowing it on this stock.” You are a gambler. Take Buffett’s advice and become an investor in great companies for the long haul.

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

Ideas that ensure investment success

Investment success is defined as reaching your goals long-term. Investing is not gambling where you are looking for a short-term windfall. Investing in the companies that make things or add value to the world require commitment to putting money into expansion with the hope of gains later on. US companies as measured by the stock market price and dividends have shown compounding wealth at about 11% per year on average over time. History of annual gains are recorded here. From 1871 to 2021 the growth rate is 11%. When you compare the stock market returns to other asset returns, you find the equity index holds at 11% while the gains for different assets are much less. Equity accounts managed by ‘professionals’ earn more for all time periods. Costs matter. Over 30 years the difference is stark: 11.06% vs 3.79%. Thus the ‘safest’ investment is a stock index fund that is continuously funded in order to maximize the “miracle of compounding.” Contribute $9 a day, $250 a month and own $2,000,000 in about 40 years. Use a tax-FREE account with a low-cost stock index and pay no taxes on your gains.

https://www.amazon.com/New-American-Retirement-System-Reserve/dp/1461030072

Cut taxes in retirement

If you feel you are paying more tax now than before you retired, consider these options. First, you must pay income taxes on the money you saved in a tax-deferred account at work. You may also have to pay tax on your Social Security benefits. So you may be able to convert a portion of your IRA to a tax-FREE future by staying in your current tax bracket. Your tax preparer can help with this calculation. Second, tax on capital gains is lower than on income so take some gains. Third, consider not selling assets this year. Fourth, plan charitable giving so you maximize your deductions. Fifth, delay taking or making taxable income. Rental real estate or other self-employment is a great way to defer taxation. Sixth, switch investments to non-dividend paying securities that diversify your portfolio. Buffett’s Berkshire Hathaway is one with many different subsidiaries. Market index funds are tax efficient.

https://www.amazon.com/Pay-No-Taxes-Retirement-legally/dp/1507527977/

Employees say they don’t want traditional “retirement”

84% of employees say they want ‘financial independence’ not traditional concept of retirement. 55% say they would give their employer more personal data in return for personal financial strategies. However, employers don’t really want to provide strategies for their workers. They already have shifted the burden of ‘financial independence’ to workers by canceling paid pensions. Now some employers are not even meeting basic fiduciary requirements in their 401k plans. Workers must decide on the amount of contributions for a comfortable future income stream. They must also choose which investment options to use in their savings’ plans. However, because workers are not able or capable of making these complicated decisions, employers are essentially wiping their hands of this responsibility. Actually employers do not want ANY responsibility for their workers future financial success or failure. Workers have had to sue employers just to be fair with their savings plans. Employers sell workers the most expensive version of their company stock, the most expensive mutual funds, and the investment options most beneficial to the plan administrator or broker.

https://www.amazon.com/Robbing-You-Blind-401k-fees/dp/1493588966

Advisor/broker must follow the new communication rules

They can’t lie/misspeak to us anymore:

Includes untrue statements and omissions;
Includes unsubstantiated material statements of fact;
Includes untrue or misleading implications or inferences;
Fails to provide fair and balanced treatment of material risks or material limitations;
Fails to present specific investment advice in a fair and balanced manner;
Cherry-picks performance results or otherwise presents performance in a manner that is not fair and balanced; or
Is materially misleading.

They have to keep a record of what they communicate by any means. The modernization of archaic regulations has seen digital platforms enter the SEC’s jurisdiction, and compliance demands are about to increase drastically. They can still talk a great game so we may need to record a call.

?**********ACCOUNTABILITY**************?

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

The Path to Dictatorship: 2010-2030

Jan 21 2010 Corporations’ election-spending unlimited

Nov 2020 Wealthy discredit election process

Nov 21 2020 Trump’s Plans for a Coup: criminal

Nov 21 2020: Trump plan: US Marshals seize voting machines

Jan 6 2021 Direct assault failed: guns & bombs ready

Trump engaged in a "criminal conspiracy" to stop Biden

“I don’t f—ing care that they have weapons”

Trump was “detached from reality”

Trump used mafia-style intimidation on the defenseless

Parscale: “a sitting president asking for civil war.”

Trump: “Just say the election was corrupt and leave the rest to me”

GOP fascism: “RINO hunt armed; no bagging limit” J6 comm threat

Trump’s Supremes END personal rights & state laws except for weapons WMDs

Fascism: GOP to stop women leaving state for abortion

It’s not a court. It’s a junta: Two Americas

Trump: President Biden is 'enemy of the state'

Nov 8 2022 Trump’s “national revolution”

Jan 2025 Dictator pardons himself

How Govt wastes our money:

Migrants lured onto MA flights: false promises of housing and jobs: Nazi trick Jews too

Even TX GOP Cruz says kidnapping people is illegal: Hitler got popular by this trick

Northern states will send homeless population to deSantis’s warm climate for winter

Can a TX sheriff really indict FL gov DeSantis for migrant ‘relocation’ program?

Conspiracy Theorists Want to Run America’s Elections

NJ Court Strikes Down State Law That Gave Millions in Tax Breaks to Casinos

Fed: loss of jobs price we pay for higher inflation from huge corp profits

Can Congress actually reform the vote count process: Trump’s next ‘coup’

Trump will delay his legal jeopardies until GOP prez can shield him from prison

Aimee Bock MN caught theft $200 million for hungry kids’ food: fake docs

John Davis MS caught diverting federal funds for needy to own projects/friends

Are we really ready to soldier another foreign war? We declined fighters for Ukraine

SCAMS/SPINS:

GOP sex trafficker Gaetz sought pardon BEFORE arrest: only guilty need pardon

Trump OH rally of his Q “army”: uncanny resemblance to the infamous Nazi salute.

Trump warned last year about stealing US documents by his lawyer: dictator’s act

Trump’s immigration plan: bus murderers, rapists, criminals to Dem cities in 2019

GOP NM candidate offers chance for firearm for $100 donation: getting serious

GOP plans to reduce Social Security benefits: Congress can’t fix scheduled cuts 2034

Biden thinks ‘pandemic is over’: my town is giving Boosters for Covid weekly deaths

Biden calls the Queen “decent”: ‘people need decent homes’

Boeing caught misleading investors, public re: safety of 737 Max: kill 346, fine no jail

Shawn Everett Good NC caught Ponzi and laundering: promised low-risk

Morgan Stanley caught failing to secure personal data of millions of customers fine

Waddell & Reed caught for overcharging: keeping clients in wrap fee accounts fine

John Mendes, CA caught profit insider trading on friend’s info of acquisition fine

James Arthur McDonald Jr. CA caught risky trading lost $millions for clients

SCAM: 10 top scams on teens: media, shop, ID, contests, grants, debt, auction, ‘freebies’

SCAM: Geek Squad service renewal is fake ignore and call the Geeks on your contract

SCAM: 42% of people still pay for subscriptions they don't use.

Media encouraged people to cook chicken in NyQuil teens end up in emergency or die

Credit check: AnnualCreditReport.com is free: credit score from most cc providers.

Recall: Nissan pickup trucks: they move automatically (no driver) in park

Tesla recall 1.1 million vehicles windows don’t close in crash

Putin orders up 300,000 more reserves plus prisoners recruited to die like heros

Putin's Top Priest Tells Russians Not to Fear Death Amid Mobilization: just leave Putin

Jobs

Rich people got PPP bonus for not keeping workers employed

Scam jobs: pay fee, shopper, entry, envelopes, med billing

Jobs no current citizens want to hold: immigration is vital to future US survival

Ask for raise: Office work costs twice as much as home working

Who owns your account now?

3% interest for 15 mo CD: no minimum: emergency fund idea

10 Places to Get Free Online File Storage

National Parks entry is free on Sept 24 and Nov 11: https://www.nps.gov/findapark/index.htm

Best Free Antivirus Software for 2022: you have no excuse not to protect your data

Are the iPhone 14’s big changes worth another $800 + tax? Shakes, cut/paste, black out

Miracles:

Poverty in richest nation overcome by special programs for deadly sickness: wealthy too

photovoltaic glass: convert almost any glass sheet or window into a PV cell.

Cooling without electricity: future without warming outside?

Queen’s last trip in photos in case you couldn’t make it to London:

Gaza farmer unearths Byzantine-era mosaic

Above law: Trump could declassify with Executive Order: none for nuclear code/docs

Cancer death rates fall steadily in the US, with more survivors than ever

Light is both a particle and a wave depending on how we look at the light.

I don’t think that there is any such thing as a position or a velocity of a particle.

Everything (galaxies to stones) in universe made of subatomic energy ‘vibrations’

A subatomic ‘particle’ is the smallest possible vibration (quantum) of a quantum field.

Mass–energy equivalence: E=mc^2. At the smallest level; Everything is moving!

There is no TIME at this level because of force fields come and go in all directions.

Inside protons, neutrons, it is the fields of the virtual particles that creates its mass.

“Empty space is a boiling, bubbling brew of virtual particles that pop in and out of existence in a time scale so short that you can’t even measure them.” Space expanding.

The electricity we use comes from the field around the wire not from election itself.

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

973.746.2014

www.InsuranceAdvisorsNetwork.com

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

Friday, July 8, 2022

Cutting recurring costs can save you a fortune

Can you take out 10% of your nest egg each year?

Some baby Boomers think their advisors would recommend this amount to be withdrawn each year in retirement. “Today’s low yields on bonds and high equity valuations mean ‘retirees are unlikely to receive returns that match those of the past,’ Morningstar says.” Fidelity said that over the timeframe of about one century, a 4.5% withdrawal rate would have lasted throughout a 30-year retirement in about 90% of the periods analyzed. Because that is an average, you must consider your specific situation before assuming you can spend 4.5% each year. Low earnings, inflation, your health and your family longevity must be factored into your best case scenario. If the bulk of your retirement funds are in qualified accounts (traditional IRA), your mutual fund or brokerage firm uses the IRS RMD worksheet to do the calculation for you. Their tables use an average withdrawal rate of less than 4% of your previous year’s combined total qualified funds amount each year. Thus, if your investments shrank, your RMD amount will be lower. You need to learn the factors that change your prudent annual spending amount.

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

Help your child, grandchild get started on a $1 million fund

They will need a million dollars since inflation can reduce the buying power by 50% in just 20 years. Since common stocks have the best history of keeping ahead of inflation, a broad portfolio has the best chance of delivering steady returns. Since 1871 a basket of stocks (dividends reinvested) has provided 11% returns. Ordinary inflation is 3% not 8.6%, so right now stocks are cheap. If you show your family that an 11% long-term return can turn $250 a month into $1,000,000 in about 34 years, they will not be try to beat the market with fast trades through a $0 commission broker. Show them the math: $250 per month for 34 years costs $102,000 in contributions. They earn $898,000 in dividends and capital gains. If they use their special IRS tax-FREE account, they avoid about $225,000 in taxes when they take their money out to live on. Remind them that Warren Buffett bet a million dollars on a low-cost market index fund to beat 5 super stock pickers. Buffett recommends you use the Vanguard 500 Index Fund. Why? You can give up 63% of your returns when you use a broker. And if they trade to beat the market they may end up with the historical broker account average of 3.79% not 11% a year. That’s $208,865 instead of $1,021,768 after 34 years.

https://www.amazon.com/Give-your-child-leg-up-manage/dp/1096505355

Quickest ways to save $3,000 a year

The Federal Reserve's 2019 Survey of Consumer Finances (released in 2020) found that the average, or mean, account was just over $255,000. The average cost of using an advisor or broker was 1.5% a year or $3,825. Since most financial sales people can NOT guarantee higher performance than the actual markets, most of us are better off leaving our money in a low-cost index account. Managed accounts earn only 3.79% vs 11% for an index account. For specific money management solutions, a one-time fee-only planner provides better advice since it is unbiased. Moving accounts is easier since a trustee to trustee transfer is usually free and not a taxable event. Another way to save $3,000 a year is canceling a loan to the US government. The average tax refund was $3,304. You will not incur a penalty if you owe less than $500 each year. So if you reduce your paycheck withholding by $250 a month, $125 a pay period, you will be able to increase your investment account by $250 a month. This creates $3,000 a year or about $200,000 extra in your investment account in 20 years.

https://www.amazon.com/New-American-Retirement-System-Reserve/dp/1461030072

Cutting recurring costs can save you a fortune

During this period of high inflation, it is important to note how much certain expenses really cost. Just as I noted above, saving $3,000 a year on your money management can really put huge amounts into your account. One reader was paying 2% of their nest egg each year for their advisor to check their statement quarterly. They moved their money to Vanguard and accumulated an extra $350,000 during their pre-retirement years. They were not only giving away 2% a year, they were losing the gains from that money. This “tyranny of compounding costs” applies to all of our recurring costs. We used to pay extra insurance premium for collision coverage on all our vehicles. We paid $ hundreds year after year until we realized our coverage would NOT pay enough to repair our older cars. This fact led us to take our policy apart so we paid only for the liability required by law. We did not need standard mileage, collision, comprehensive, gap, towing, temporary rental, health care, disability, accidental death, dismemberment, personal injury protection (PIP) and uninsured motorist coverage (UM). We then went through all expenses—cable, internet, life insurance, periodicals, etc to find more savings.

Save big: https://www.amazon.com/Get-What-You-Pay-financial/dp/1492384100

Another way the wealthy avoid taxes we can’t

One of the easiest ways the super rich can avoid taxes is by having the assets they donate to a tax exempt organization appraised for very very high amounts. Today Trump’s favorite property appraiser was asked to stop holding up the investigation by the New York Attorney General. Trump took a $21 million tax deductions on his tax returns by having his appraiser value the forest in front of his mansion in upstate New York so high: it’s impossible by law. Our Congress people let folks like themselves reduce their taxes by claiming a deduction for their $million gifts. They give art, land, houses that they have appraised at future or improbable values. Trump promised he would not develop the forest on his property in his retirement years. That development is not possible. This is one reason Trump is under investigation. His appraiser based the value of his property on the possibility that 24 mansions would be built and sold. Local officials have laws against such a venture. Rich people in the area don’t want the ‘low-life’ crowding the back roads and markets. So if the appraisal was faked, Trump will owe New York and USA millions of dollars. Trump’s lawyers may delay paying for years. He may end the IRS probe in 2024. Meanwhile, don’t pay the shortfall for the rich.

Use your tax-Free IRS account: https://www.amazon.com/Tax-FREE-Wealth-How-laws-free/dp/1475089236

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

The Path to Dictatorship: 2010-2030

Jan 21 2010 Corporations’ election-spending unlimited

Nov 2020 Wealthy discredit election process

Nov 21 2020 Trump’s Plans for a Coup: criminal

Nov 21 2020: Trump plan: US Marshals seize voting machines

Jan 6 2021 Direct assault failed: guns & bombs ready

Trump engaged in a "criminal conspiracy" to stop Biden

“I don’t f—ing care that they have weapons”

Trump “detached from reality”