Your Wealth Reserve: 401k fees

Showing posts with label 401k fees. Show all posts

Friday, January 7, 2022

Mark the New Year better

Make the New Year better

Is automatic bill pay right for you?

There are severe penalties for not paying your bills on time. You will get hit with charges, interest and lower credit bureau scores in many situations. You also may be paying higher mailing rates. How do you avoid this situation? Your bank may offer auto bill pay. I have been using this for about 10 years. Using your checking or business account as the source, you set up a vendor account with the name and address of the entity you owe. My monthly house mortgage loan is paid to Quicken at the same amount each 1^st of the month. The bank posts this amount the Quicken’s bank by the 1^st automatically. I do nothing after I set the amount monthly. For credit cards with different amounts, I enter the amount when I get the bill and set the date I wish the amount to arrive at the card’s address. For all others (utilities, doctors, newspapers, insurance, and individuals), I decide the amount and time to arrive at their address. All I have to do is have all my income deposited directly into my checking account. Some times I have to move money from my savings to my checking for emergency bills. Sometimes I have to reimburse my daughter and (she me) via direct transfers or Zelle. Her account is at the same bank but I can do a transfer to another person at their bank for large fee. The best part is I have monthly records on paper and any period totals digitally. I can also find and print any transaction during the past 12 months. I don’t pay extra for auto bill pay since the bank has my money from direct deposit. In fact I have saved over $50 since starting.

More ways to save: https://www.amazon.com/Save-3000-every-year/dp/1500681571

You need a tax-FREE account so your retirement income is FREE

This book will show you how to: Create a $2,000,000 tax-FREE Retirement System. Use the best legal tax shelter: no taxes . . . ever. Tax-favored over a 401k even with a match. Protect your family and assets with your System. Borrow from your System to pay for large purchases. Buy whatever you need without going into debt to others. Self-insure manageable risks—invest the premiums saved. Buy financial services at wholesale prices—save $3,000 a year. Manage your System in 1 hour per year. $2 million nest egg can produce $160,000 a year in retirement. $1 million produces $80,000 income FREE.

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

New Year fresh start for your kids/grandkids

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. We have used this 'Wealth Reserve' as I call it to have funds to use low-cost high-deductible insurance, to buy two homes and 5 cars with higher down payments or cash, and now to receive $2,500 a monthly in a retirement supplement. Your kids use the Buffett investment strategy for any amateur. Buffett recently proved his method, though simple, beat the strategies of the best hedge funds. Start with only $1,000.

Start in 30 minutes: https://www.amazon.com/Give-your-child-leg-manage/dp/1096505355

2022: another stock market high?

You may have noticed that your 500 index fund returned about 29% last year. Your real estate index fund provided 40% return. Like 2019, 2017 and 2013, these highs might start convincing you that an average for this period of 17% might continue. Using the 500 index would have quadrupled your retirement nest egg. But before you get greedy, you might want to move some of those gains to a balanced account like Wellesley Income Fund. This low-cost managed fund has provided steady income to retirees since 1970. This balance of stocks and bonds could help you through the anxiety of 2022 since the Fed (US gov money manager) will stop pumping up Wall Street firms and will increase interest rates soon. This situation has already changed market forecasts so you know we are not likely to be so lucky in ’22. Remember the cardinal rule of managing money, especially in lower return periods: low-cost beats high-cost in every period.

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

What is your retirement dream?

Travel, hobbies, family, business, volunteer, keep favorite job, other? No matter your dream your first concern is health. Our dream can motivate us to save for the time when we don’t NEED to work at a job for money. Thus there are folks who have prioritized saving over spending, even when family obligations are great. Take the story of the Howell family highlighted in a recent Money newsletter: the Howell's could save 21% of salary and put kids thru college. Randy retired at age 56 from a variety of labor and management positions with United Parcel Service, and LuAnne worked as a school secretary. They enjoy hiking and other outdoor activities. However, without a health plan from work, it is doubtful they could have retired early to do what they wanted to do. For other folks, what happens when their health requires them to interrupt their plans? Our health system is a ‘for profit’ system so that my health needs are in conflict with the industry need for profits. I, NOT them, will suffer when I can’t afford to maintain my health. My dream is crippled while they earn more. The need for affordable health insurance becomes the No 1 priority for America.

Health insurance first: https://www.amazon.com/Health-Insurance-ONLY-right-policy/dp/1480125083

Is using a 401k brokerage account right for you?

New research by Empower shows that while the average age of participants using the brokerage account is higher than average, the effect has to do with older participants having higher incomes and balances rather than just because they are older. This makes sense from the view that buying individual securities when you already have a nest egg built up provides some further diversification or specialization. One reader had 80% of their 401k money in a low cost S&P 500 index while they continued to buy DMYI which is involved in quantum computers. This arrangement is sometimes called a “hub and spoke” strategy. Any loss in the spoke does not destroy the wheel.

https://www.amazon.com/Best-Both-Worlds-Spoke-Investments/dp/1533307326

Which used cars to buy now?

Vehicle dependability is at an all-time high, according to the J.D. Power 2021 U.S. Vehicle Dependability Study. Owners of 2018 models reported on the number of problems they have had. Lexus, Porsche, Kia, Toyota head the list. Rover, Jaguar, Chrysler come in last. By the way, Jeep, Dodge Chrysler, is now stellantis. Because of the lack of chips for new cars, used car prices have gone up to meet the demand. However, if you are looking for a bargain, you need to compare this list to the list of vehicles from iSeeCars that depreciated more than 1.3 times the 39.1% average three-year depreciation for all vehicles. This list shows that Audi 6, Ford Fusion Hybrid, BMW 3, and Volvo S60 lost the most value. In 3 years, these cars lost over HALF of their value. However, one vehicle shows up on both lists: Lincoln MKZ. The Lincoln MKZ was discontinued after the 2020 model year, which shows that demand isn’t high for this vehicle perhaps because it isn’t as luxurious as its competitors. However, at $21,500, the used Lincoln may be a bargain since you have some dependable lux at a reasonable price. Avoid flooded ones. Shop around for insurance. High deductible reduces premium. Save $22,000 over time.

Ask for each discount: https://www.amazon.com/Vehicle-Insurance-Beware-Double-Coverage/dp/1480027634/

Are buying art, wine, gold the right investments for you?

Many internet blogs run by journalists provide misleading investment advice to sell clicks to other for profit sites. Example: 6 Brilliant Ways to Build Wealth After 40 Misleading advice 1: Invest in art that has outperformed the S&P by over 180%. Claiming that wealthy people make huge profits, the authors don’t cite which art they mean and how much the rich paid for the art. 2: Get $10 by starting to invest in Apple, Tesla, Amazon. The fees for investing small amounts may take all your profits and won’t build wealth. A free index account of the top 500 stocks may build wealth over time using the Miracle of Compounding. 3: Buy gold from a dealer to avoid volatility. The authors don’t explain that gold prices fluctuate too. The dealer fees may also take all your profits. 4: Shopping for car insurance can save you money but you need to shop the carriers directly not from the editors of this blog. Each carrier has their own discounts/rates. 5: Buy wine from their firm for an investment return of 10.6%. Speculating on bottles of wine is not smart no matter what “sommelier knowledge with AI-driven algorithms” they use. 6: Stop overpaying for stuff online. Using a browser extension, you can save on some goods. However, when I used it I found that the pop up usually shows the same price on Amazon or at another site but without adding in the shipping costs. Since I have paid for shipping with Prime, the alternative was misleading and I needed to create another seller account. 7: Invest in real estate and art through a 3^rd party to earn “passive income.” Low-cost index accounts with no 3^rd party fees provide these important diversification asset classes. However, the authors don’t explain the fees charged on the interest income paid.

Use Compounding: https://www.amazon.com/Miracle-Compounding-Turn-day-into/dp/1470176513

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

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

The Path to Dictatorship: 2010-2030

Sedition: Trump’s plan to keep power

Trump co-conspirators charged?

Terrorists send Congress to floor

Cheney: Trump or truth

725 terrorists charged

US civil war II

How Govt wastes our money:

Congress fails to pass law against abusing women: no votes since 2013: NRA blocks it

Sedition: ‘speech that incite people to rebel against the government’: Trump incites Jan 6

Sedition: Trump called on his "MAGA nation" to "rise up" against President cost $30 mil

SCAMS/SPINS:

Kids with Covid fill hospitals: unvaccinated; 378 children admitted per day

GOP Jordan claims booster not effective but NO facts more Trumpers die for lie 840,000

TX tells Navy it has no jurisdiction over antivaxxers despite orders: 35 may kill hundreds

TX bans books on race and sex they don’t like in secret meetings: teens buy own books

NJ caught negligence in deaths of 100+ veterans in state-run facilities: fine $53 million.

Surprise medical bills now illegal: Just say ‘no’ to med providers who spring bill on you

Call a taxi: ambulance rides $450 or more are exempt so we still face surprise bills.

Teva Pharmaceuticals caught providing opioid leading to deaths of 500,000 users

Rich need a raise?: Time to raise prices on Covid tests, treatment, vaxx, swabs, etc

Manchin decides Dems not break GOP block vote rights: takes McConnell’s job

GOP halts Voting Rights Act: states block vote expansion: Trumpers hold key jobs

Only 1 Republican showed up to remember the 1^st and only attack on our government

Most Americans don’t think state GOP will accept Dem win: GOP war for Trump

24^th Dem quit House: GOP win without a fight

725 terrorists charged: most convicted rioters received no jail time: ready for 2^nd attack

Trump terrorist attacks covid vaxx clinic shouting “murderers” 1 hospitalized from hate

"There’s a demand for misinformation; so people are always gonna find a way to get it."

21 million Americans believe violence is justified to overturn the 2021 US election

75% of insurrection supporters: Dems trying to make US “obedient” Third World voters

40% GOP: “violent action against the government" sometimes justified: 2^nd civil war

30% Americans think Biden illegitimate elected president: 30% think election fraud

Sedition not charged because Jan 6 attempted coup was run by white supremacists

Trump’s TX recount: 0.0006% discrepancies: Biden did not win TX: Trump lost votes

Putin hackers behind election probe of Dominion Voting Systems in cities w/o machines

Western allies fear erosion of democracy in US: riot, insurrection, or armed coup?

Ivanka, Don Jr caught in subpoena by NY attorney general: long delay tactic; no jail

Prince Andy says 17 year old has already been paid for his sex: $500,000 voids her suit

Mel Trump is selling her hat: needs money; divorce? They lost their shirt on Wash hotel

Marlboro cigarettes changing image: “moving beyond smoking” to smoking in space

HeartWare pump taken off the market after years of problems: still in chest of thousands

Allen Giltman CA caught selling fake CDs from fake websites: $50 million

John Piccarreto NY caught Ponzi fraudulent promissory notes $20 million prison 7 yrs

Susan, William Harris caught stealing funds from special needs folks prison 47,15 yrs

Petra Gomez Jakeline Lumucso caught prep fake tax returns $25 million prison 8 4 yrs

Kent RE Whitney CA caught investment scam at his church $33 million prison 14 yrs

Jeff Carpoff CA caught fake mobile solar generators Ponzi $1 billion prison 30 yrs

Richard Terabelian Ayvazyan CA caught $10 million Covid relief funds prison 17 yrs

Private equity–backed RIAs had a 147% increase in advisors misconduct after takeover.

Jobs

Nevada fires unvaccinated higher ed employees after mandate left in place

Walmart to hire 3,000 drivers as it expands home grocery delivery: put fridge for you

37 Bed Bath & Beyond stores are closing

Who owns your account now?

Mortgage rates rising: refi before Fed raises rates: 1.750% 15 years

Avoid delay in tax refund: enter the exact amount of Child Tax Credit: look it up at IRS

AT&T and Verizon delay new 5G service: why pay more for no better service: airports

Student loan borrowers will have an extra 90 days to begin repayments

Removing all your personal data from internet data brokers can be time consuming

Miracles:

10 year old refused Alexa challenge to shock herself in outlet: Jeff’s fun is deadly

Nuclear war “avoided” say world powers: Gee, I feel better: what did we have before?

We need more air: Seed-dropping drone can plant 40,000 trees a day

GA to allow everyone to carry gun without a license or background check or training

Pope wants more children

Child abuse: 300,000 children were taken in marriage by older men: still legal in US

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

Montclair, NJ 07042

973.746.2014

www.InsuranceAdvisorsNetwork.com

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

Friday, October 29, 2021

Is your 401k robbing you blind?

Survey: “I wish I had learned more about financials”

Many respondents wish they had taken the time to learn more about financial products. We are all very busy and don’t get a chance to learn more about making and keeping money. And yet, for many, the amount of money we have later makes a big difference in our lives. I was lucky. After working a few different jobs, including managing a small health bureau in NYC government, I managed a small operation in a Wall Street firm. I had a crash course in annuities, mutual funds, and insurance. I learned about the products brokers and advisors sell to the public. The most important lesson I learned was which products to buy and which to avoid. I have put that information into short reads that most folks can follow and succeed with. Unless you are wealthy and need special tax advice, I found that the simple products are best. You can understand them and pay much less than those products and services with all the fees, commissions and charges my industry uses to get rich. Pay less; keep more.

Take your discounts: https://www.amazon.com/Insiders-Guides-Discount-Financial-Services/dp/143480593X

Is Impact Investing right for you?

Social and environmental focus while you grow your portfolio sounds good. But most companies you may support are not pure plays. For example, Ben and Jerry’s was famous for its social and environmental concerns but it is owned by Unilever of UK which has a questionable environmental history. Labels such as socially responsible investing and impact investing are often used synonymously, alongside other terms like ethical investing and sustainable investing. They usually refer to a similar idea: Using your investing dollars to make a positive difference in the world. But my idea of “positive difference” and your idea can be different. For instance, some investors with particular religious ideas may invest in companies like Hobby Lobby since they have a strong religious mission. One of those missions is Museum of the Bible, a non-profit run by the Green family. Internal staff had warned that some items bought by the Museum had dubious provenance and were potentially looted from Iraq. Several shipments of the artifacts were seized by US customs agents in 2011, triggering a years-long struggle between Hobby Lobby and the federal government that culminated in a 2017 civil forfeiture. As a result of the case, Hobby Lobby agreed to return the artifacts and pay a fine. 3,800 items seized from Hobby Lobby were returned to Iraq in May 2018. In March 2020 the Hobby Lobby president agreed to return 11,500 items to Egypt and Iraq. It may be better to “invest” in your local charity (tax deduction improves your return) and leave your portfolio with “passive” investment guides.

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

Is a SPAC right for you?

This type of investment is in the news because Trump is using a Special Purpose Acquisition Company to raise funds for his promised media firm “Truth Social.” A SPAC is like a reverse IPO—managers raise funds from investors to speculate on some project in the future depending on the amounts they raise. A special purpose acquisition company, Digital World Acquisition Corp, had two hedge fund investments until it announced it was helping Trump, who was impeached after being accused of inciting the Jan. 6 attempted coup. At the announcement of the SPAC with Trump’s venture, its share price zoomed higher. SPACs, also known as blank-check companies, are created to raise capital from public equity markets and then use that cash to merge with a private company that has or will have an actual operating business. Thus the two hedge funds probably profited from the news by selling ahead of the actually work with Trump. As usual, most of us were not able to buy and sell at the right time to make a profit without prior information about this event. We are better off taking Buffett’s advice.

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

Is a 401k loan a good deal?

Yes, but. 401k money is your money. It may seem like a no-brainer to borrow your own money in a pinch. However, this loan is probably the most expensive loan you will ever take. When you take money from your future nest egg, you are taking giving up one of the most valuable things you own. You can replace the money you take but NOT the time your money is using to grow. Example: $10,000 missing from stock market growth for 30 years can cost you $198,373. That is how much more you would have if you left the $10,000 in a market index fund earning the average 10% per year. Your $10,000 earns dividends and earnings on reinvested dividends. Sure you could tell yourself you will pay the $10,000 back in a year, but few borrowers actually do. Many plans require repayment within 5 years. If you fail to repay there is a penalty plus income taxes. If your employment ends with a loan outstanding, you may have an immediate repayment demand. However, with the pandemic job upheaval, taking the loan was seen a necessary and that loan may never get repaid. Many will just start over when they are employed again. The loss of the time in the market can never be made up.

You may have to work longer. https://www.amazon.com/Your-Plan-Live-Age-100/dp/1548180793

Is your 401k robbing you blind?

If you have been able to continue to contribute to your employer savings plan during this critical time, congratulations. If you have been able to contribute more than the plan’s default savings rate, Double Congratulations. During this bull market, many have been lucky to double their plan balance. A simple low-cost index mutual fund has risen over 16% a year in the last 5-10 years. Others have not done as well because they used the default investment option of their employer. Usually the other options come with higher expense ratios, and thus have not benefited employees as much. Some firms have been sued because the employer options have been poor or compromised. Of course, employees can contribute more in order to gain a higher employer matching amount. However, the low-cost investment option usually provides a higher retirement balance than a higher contribution amount. The BEST strategy would be to pay the least fund and plan fees with the highest employer match. This combo—least cost; maximum contribution; highest match—helps you reach your retirement number faster.

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

How you can hurt your credit score and report

Car rental: If you use a debit card, a rental company may check your credit history. Confirm the reservation with your credit card to avoid the unnecessary credit inquiry. Then, settle the final bill with your debit card upon returning the vehicle. Cutting credit card: If you close a credit account, you may raise your credit utilization ratio—percentage of your total being used—which is bad for you. If you use $5,000 of your total credit of 15,000 and then cut one of your other $5,000 cards, your ratio is now 50% not 33%. 30% is better. Missed payment: if you miss a rent or car payment, your delinquency may be reported to the credit bureaus. Disputed bill: if you are not happy with a bill, the vendor can ding your credit for failure to pay on time. Breach a contract: refusing to pay a membership you don’t want gives the company reason to hurt your credit. Unexpected bill: you need to negotiate a payment plan instead of ignoring valid assessments. Apply too many times: each loan or card application is a red flag to creditors. Just because you can apply does not mean you should. Each car dealer will check your credit if you are shopping so shop online first. Use credit wisely so you always have it for emergencies.

https://www.amazon.com/Money-Scams-financial/dp/1505437962

Why do we need to subsidize the billionaires?

Walmart family members have billionaire legacies from the founder, Sam. And yet, we US taxpayers must subsidize them to earn more. Why? For many years, we have had to provide food stamps (SNAP) and other financial help (Medicaid) to their employees to give them a living wage. Walmart employees receive $ billions in US food subsidies. About 70% of the 21 million federal aid beneficiaries worked full time, a GAO report found. This means the Walton billionaires would have earned less if they paid a wage high enough so we taxpayers did not need to make up the difference. McDonald’s was among the top five employers of Medicaid enrollees in five of six states and SNAP recipients in eight of nine states. Other notable companies with a large number of employees on federal aid include Amazon, Kroger, Dollar General, and other service and retail giants. Many employees are paid about $10 per hour or $400 a week BEFORE taxes. The federal poverty level is $26,500 so many employees of the billionaire companies qualify for US subsidies. Many employers pay NO taxes to cover this federal aid. Many wealthy people have already reduced their tax bill with tricks. We subsidize the rich since they profit from paying less than a living wage to most of their employees.

Socialism, American style: https://www.amazon.com/Americas-Socialism-Rich-little-people/dp/1535218584

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

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

Our Jan 6 ‘Truth and Reconciliation Commission’

Extremists: “FBI Instigation of January 6th”

Bannon to Congress: F…You

Trump to Congress: F…You

Frmr military & police plan gov overthrow

TX attorney general: Biden overthrew Trump government:

Congress fails on voter rights

How Govt wastes our money:

One coal Congressman sends us into climate disaster: last chance before GOP deniers

VA GOP promises to keep kids from reading books the GOP doesn’t like: Trumpists win

One millionaire decides no wealth taxes: Biden plan to rebuild US collapse: Fair share?

Military spending increase after Afghanistan: $46 Billion wasted on broken systems

Wasted tax dollars: 4 agencies paid to do ‘intelligence’ failed in Afghanistan exit

Congress allows wealthy to avoid IRS tracking large transfers to avoid taxes

Congress allows drug prices to escalate even more: Our reps profit from the increases

SCAMS/SPINS:

Save the children: Delta “plus” variant more transmissible: Stop deaths at 750,000

Children lower risk of serious illness from COVID, but they are likely to spread it.

COVID 19 is the sixth leading cause of death among 5-11-year-olds.

Judge: SW pilots must get vax so airline can make ‘safe work environment” per contract

BEWARE gov workers/police: they ignore vax mandate: we assume they have Covid

NYC police die from Covid still resist vax: 60 so far: NYPD workers dead

72% of unvaccinated workers vow to quit if ordered to get vaccinated

Kyle’s judge already decided case: victims must be called ‘rioters’ ‘looters’

TX man kills man parked in his driveway: claims ‘self-defense’ as car flees.

Fake messages to raise hate: prices, guns, Covid vax,

Fake Covid vaccination certificate purchased so folks can travel: BEWARE

Steven Gallagher OH caught $1 million pump and dump "old-school boiler" fraud

Trustmark National Bank TN caught redlining loans Black and Hispanic neighborhoods

Ann Vick CO caught stole $3.2 million Ponzi scheme promissory notes option tradeing.

Hospitals caught overcharging routine procedure by label ‘emergency’ $16,221.26 birth

Fast food may contain plastic: health problems for old and young, reproduction etc

Employers caught winning all mandatory arbitration employee customer grievances

Flooding Earth's orbit with thousands of new satellites makes your next ride dangerous

HATE maker: Trump warned on social media that looters in Minneapolis would be shot.

Weapons were found in the cars of Jan 6 terrorists: Trump asked them to stop Congress

Jobs

Scams on employment opportunities: 16,000 folks claim fraud

Record number of jobs abandoned: business earnings skyrocket

Employers calling back workers they pushed out just a year ago: work for peanuts?

Who owns your account now?

Medicare Advantage: JD Power survey best plans

Post office: cash paychecks gift card: Washington, Baltimore, Falls Church, the Bronx

Miracles:

Coal burn or Car idling?: CO2 levels in the atmosphere reach a 3 million-year high

Drought-stricken California lashed by heavy rains, flooding and mudslides

Vaccine for breast cancer: trials begin for worst cancer type

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/

Wisdom comes only thru suffering Aeschylus

IAN

41 Watchung Plaza, B242

Montclair, NJ 07042

973.746.2014

www.InsuranceAdvisorsNetwork.com

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

Friday, May 28, 2021

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

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