Is inflation really a threat to your money?
Current
media spin is using inflation fear as a theme. Prices
have risen because the economy is gaining strength after a pandemic shut
down. Sure inflation exists. But it is a threat only if you are holding tons of
bank CDs and bonds with low interest yields. Banks and bond issuers will have
to bump up payouts to sell their new bonds so the old ones will be worth less.
If you are holding a broad spectrum of stocks in a low-cost account, you will
continue to enjoy
the high earnings (stock market up 10% in ‘21). Do you really think Apple,
Amazon, Google, Facebook, etc will stop growing and be defeated by 2%
inflation? They will just raise prices to cover higher costs. For instance,
Amazon has already
increased revenue by raising the cost of selling my books. For most of us
long-term investors, stocks are the safest investment strategy. Stocks will
protect us from inflation since the average
return of 11% is greater than the 3% inflation rate. Plus, since we invest
in tax-free accounts, we earn an extra 25% by NOT paying income taxes on our
withdrawals. 11%-3% = 8%. 8% is greater than 2% CDs/bonds.
Go tax-FREE: https://www.amazon.com/New-American-Retirement-System-ReserveTM/dp/1461030072
Most of us regret not having emergency fund
We
all have financial regrets—few high school students learn how to manage and
grow their assets. There is a simple tax-free way to grow your emergency fund
at better rates than a bank CD. Bank CDs are safe but you lose money to
inflation over time. Saving for the unexpected means not cashing in your
savings for a new
Playstation. Opening a tax-free account for $1,000 with a low-cost
target-date fund can provide $15,000
after only a few years of saving. You contribute $10,000 over time and you
have $10,000 available when you need it. You pay no income tax, penalty or
default interest. If you have no emergency, your money grows tax-free for
years. Even if you add no more money to this fund, you could easily have
$500,000 when you stop working. When you start saving early in your life, you use
time to build wealth. You let the Miracle
of Compounding work for you. You
put in $10,000 and receive $500,000 tax FREE. You can not find a better
investment plan than that. And there is money there when you need it. You have
a Wealth Reserve for life.
https://www.amazon.com/Your-Wealth-ReserveTM-Tax-FREE-Investment/dp/1484954882
GOP asks us working people to pay more
“Uncollected
taxes equal the total taxes paid by
the lower 90% of taxpayers.”
According to 5 IRS commissioners, the wealthy don’t pay their taxes. In
fact, by not
paying their fair share, we and our
kids will end up paying for their $2 billion tax break. Those who don’t pay
taxes increased
their wealth by 55% this past year. Now the GOP complains about the deficit
when asked to pay for the infrastructure bill which will create more jobs. Most
corporations have had a fantastic year and keep
more of their profits. In fact, most large
American firms pay little or no taxes because they are able to claim their ‘home’
is in a
foreign country where taxes are lower. For some companies like Amazon we
pay for their refunds. Other corporations have paid Congress for sweet
deals and are actually subsidized by
our tax dollars despite big profits. Congress needs donations for elections
so members don’t dare touch the tax laws. This is the American version of
socialism: Socialism for the rich: the rich take the profits while we pay
for the deficits created by gov tax breaks. Congress is full of millionaires.
They make the laws. As Mitch says, Congress will “turn America into a socialist
country." Already gives money to rich.
https://www.amazon.com/Americas-Socialism-Rich-little-people/dp/1535218584
Is this tax avoidance scheme right for you?
This strategy is called a syndicated
conservation easement. It is a land deal that the IRS says is often an
abusive tax shelter. Congress created this “incentive” in 1980 for
owners who pledge to never develop their properties. Through a broker, you join
other investors to buy large acres of land and promise never to develop it. You
get a whopping tax deduction of as much as five times the amount invested.
This is one of the tax avoidance schemes that Trump
is being investigated for on his upstate NY property. He claimed he
does not pay taxes because “I an smart” during the election. The IRS
Commissioner Charles Rettig told a Senate panel last month that 28,000
taxpayers are under examination, some for similar land deductions. $21 billion
in tax deductions are now being challenged. This tax avoidance strategy may be
right for you since the rewards are much greater than the costs if your
deduction is disallowed. Most investors never face jail and would have to pay
tax later rather than now. Legal staff is available to help you avoid ever
paying your taxes. With IRS’s current lack of enforcement staff, working
Americans are more likely to pay the taxes you avoid than you are. Working
Americans can avoid paying your taxes by using their own legal tax shelter.
Use the workers’ shelter: https://www.amazon.com/New-American-Retirement-System-ReserveTM/dp/1461030072
Help your graduate avoid paying for tax cuts/subsidies for the rich
High school and college graduates need the best gift you can give
them: a future of tax-FREE income. Get them started now since your gift can
grow a THOUSAND times its value over time. For instance, $50
invested now can provide them with $20,000 when they need it later. Since
you have started your grad off with this special IRS-approved tax shelter
they will find it easier to keep saving/investing the right way. They will end
up with a tax-FREE retirement. They can create a $500,000
tax-FREE account. Some
young people have grown their accounts to over $1 million by investing $167 a
month while they work. They will pay NO taxes on their wealth. They can avoid
future tax increases. They can boost their savings by 30% just with the
fed/state tax savings alone. And if they need a home down payment or business
start up fund, they can use the contributions tax and penalty FREE.
Perfect gift: https://www.amazon.com/Tax-Shelter-Young-Americans/dp/1500426520
Lessons of investing great David Swensen
The legendary
head of Yale endowment passed away this week. He changed ivy investing at
many schools by developing a much wider asset mix to try to steady the flow of
capital for scholarships and expenses. Over his tenure at Yale his asset picks
returned 12.4% per year on average with dips during the trying years of 2008-09.
What can we learn? During this period—1985 to 2020—the stock market index
fund you owned earned 13.02%. The Vanguard’s equivalent earned 13%
after 0.04% fees. Swensen invested new money in new types of assets. He
relied on the Miracle
of Compounding—reinvesting dividends and interest to match the S&P 500
index over a long time. His last 10 years grew $100 to just under $300. Our last 1, 5
and 10 years’ returns were also exceptional: over 13%. He was not a fast
trader. His portfolio included many of the stars that are represented in the
top global corporations of today.
Invest like a pro: https://www.amazon.com/Best-Robo-Advisor-Ultimate-Automatic-Management/dp/1537111957
How can you and your spouse agree on a spending plan in retirement?
Just like planning the family vacation, you both need to
discuss your future money situation. If your spouse has a different vision of
retirement, if you don't agree on financial issues or you avoid them
completely, then conflicts are inevitable. Left unattended, these problems may
become so serious that they threaten your relationship. Most of us have fights
over money—usually spending habits and dishonest dealings. Actually 29%
of divorced boomers said they ended their marriage due to disagreements about
money. You have to discuss where all money comes from and goes in a
detailed way. Exactly how much is being spent in a month by both of you is
important to know. Buying secret lottery tickets or secret food/liquor stores
is just the beginning. If you are not used to sharing this info, you will not
be able to know how much to spend in retirement. Sure you both could agree to
keep a certain amount for secret purchases, but you must be careful. You both
must agree on the investing strategy in retirement. So when the market falls
temporarily, you have a plan (emergency fund) to still keep spending on
essentials. If you are subsidizing a child, you must agree on how much and for
how long. Otherwise you both could end up running out of money too soon. Your
discussion should include the cost of aging or healthcare changes. Do you have
a reserve to cover those costs? Finally, make and update your wills, power of
attorney, health care directives and final passing arrangements.
Make plans together to stay together: https://www.amazon.com/What-your-RMD-much-spend/dp/1718946716
Can you withdraw 4% from your nest egg annually?
Financial advisors often fall back on this old rule as a
guide to retirement income. This rule was created by William Bengen with data
from the 80s when lifespans were shorter and advisors did not have computer
software to provide a comprehensive retirement plan. Those assumptions are null
and void. You can determine your rate of withdrawal based on your needs not
your advisors’ guesswork. One of the assumptions that can throw off your
expected retirement income is that your portfolio needs to be in fixed
income—CDs, bonds and annuities. This has proved to be dangerous for you but a
safe harbor for advisors. Advisors are not likely to be managing your money for
the rest of your life. They can only guess what will happen in the next 1-3
year window. You are safer using the growth and income strategy that Warren
Buffett recommends.
https://www.amazon.com/4-Retirement-Rule-Wrong-Lifestyle/dp/1492218960/
Is life insurance EVER a “great” investment?
“For
some people, [permanent life insurance] can be a great investment” says one
sales person. “Above all, life insurance is most compelling typically as an
investment for high-net-worth individuals who are in a high tax bracket and are
dealing with taxable accounts,” he adds. Finally, this sales person admits, “you
already enjoy most of the tax benefits that are afforded cash-value life
insurance.” You are better off buying and holding a non-dividend stock so you
can avoid paying tax on your accumulations, just like permanent life insurance.
Cash
value life insurance is never a good investment. If you invest to grow
your wealth, your wealth becomes your legacy more efficiently than expensive
life insurance. Most of your premiums are going to the agent and the insurers’
profits.
Create your Reserves not the insurers’ Reserves: https://www.amazon.com/Life-Insurance-Need-Save-right/dp/1480002178/
Last chance to reduce taxes due May 17
If you owe, you have one last
chance to get a refund or reduce what you owe. Thanks to the deductibility
of a traditional IRA contribution, you may cut yourself a break. Instead of
owing the government, you could have a refund. The amount depends on your
situation. By opening or adding to your traditional IRA contributions for 2020
not 2021, you give yourself a retroactive refund. Yes, the IRS will receive a
contribution confirmation from your bank or mutual fund firm but at least you
have one less bill this month. Even though every tax preparation company can
get you an extension to file the paperwork, the tax itself must be paid by May
17. There
are rules.
https://www.amazon.com/Your-Wealth-Reserve-Save-year/dp/107028288X
Where is that refund?
The Internal Revenue Service today 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
Tax returns for 2020 are due May 17 not April 15 but the estimated
tax payments are still required on schedule. The IRS
will redo your taxes and send a refund if you paid tax on Unemployment in 2020
or you paid ObamaCare’s
excess advance premium tax credit repayment.
Have tax forms; will file … for FREE but WAIT . . .
If you have unemployment income, ObamaCare coverage you
don’t have to make payments. If you already filed and paid tax on your
unemployment income, IRS
says it will send you a refund of the tax automatically. DO NOT FILE an
amended return to obtain a refund on this tax. Taxes
due MAY 17. Input the W-2, unemployment, SS benefits, IRAs, pensions, RMD,
brokerage, etc. forms you have. You can file
for FREE online. If you didn’t receive a correct form, file a Form
4852. Usually filing your state return
costs as little as $15 unless you buy the Pro helpline. Avoid $300-400 paid
preparer fees—new IRS return
forms mean higher fees.
Retirees did not have to take their RMDs
in 2020 so taxes may be less: it was a good time to convert
IRA to Roth IRA for tax-FREE future. Unless you were self-employed, you
can’t deduct home office expenses of working from home. You can deduct as
medical expense all Covid
prevention supplies. Some states continue the health
insurance mandate and penalty unless you have an exemption. Since the IRA
contribution deduction has no age limit now, you may reduce your
income/taxes by making a contribution of up to $7,000. The standard
deduction went up to $12,400 single; $24,800 joint. Jan 15 last day to make 2020
estimated payments. You have to report your April/May and December/January
stimulus payments even though they are not taxable. Some of us receive a bank
credit; some a debit
card; some a check. Even if you don’t have to file, you should file so scammers
can’t use your SS number to mess up your IRS file. Tested
E file software ratings. Efile
Jan 15; IRS processing Feb 12.
E file avoids covid at your preparers’ office: https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free
What to do if you can’t pay by May 17?
Avoid the penalty for not paying estimated tax. Ask for an automatic
extension to file till October. If that does not work for you, you can
apply for a payment plan. An individual can setup an IRS installment plan if
you owe $50,000 or less and can pay back the amount owed in 3 years. If you are
a business owner, you can setup
an installment plan if you owe $25,000 or less. The IRS will charge a
one-time fee of $105.
If you own
less than $25,000 and can pay the amount owed within six years, ask the IRS
for a streamlined payment agreement. The IRS will charge a one-time fee of
$102.
Request an Offer in Compromise if you cannot pay the total
amount owed. This allows you to settle your tax debt for less than the total
amount owed if you will be unable to pay back the total amount owed within 10
years. The IRS will charge a one-time fee of $150. Given the pandemic economic
hardship, apply for the extension to file now: https://www.irs.gov/pub/irs-pdf/f4868.pdf
Special circumstances help: call the IRS Taxpayer Advocate
Service 1-877-777-4778 for free assistance.
More ways: https://www.irs.gov/newsroom/heres-how-people-can-pay-their-federal-taxes
IRS has $1.3 billion
refunds for 2017 tax returns
Unclaimed income tax refunds worth more than $1.3 billion
await an estimated 1.3 million taxpayers who did not file a 2017 return,
according to the IRS. “Time is quickly running out for these taxpayers. There’s
only a three-year window to claim these refunds, and the window closes on May
17.” If they do not file a tax return within three years, the money becomes the
property of the U.S. Treasury. Filing instructions are available on the IRS.gov Forms and Publications page or 800-829-3676.
You have 17 days to collect your cash!
**********ACCOUNTABILITY**************
Like 1776, this
period is a test
of democracy—We
rejected an "American
fascist"
One
woman vs The Big Con
Then they came for me—and there was no one left to
speak for me.
One person stood up to
McCarthyism too
Are
Christian Nationalists anti-democratic?
Crazy GOP: Jan
6 coup was “a normal tourist visit.”
First
active-duty service member charged over the Capitol attack.
When ‘Truth
and Reconciliation Commission’?
How Govt wastes our money:
Hackers
shut down pipeline to the East Coast: Let’s hire hackers--not
pay $5 million!
Banks to give credit
cards to those without credit: we
pay banks for defaults
SCAMS/SPINS:
McConnell
leads GOP against any Dem plan for jobs, votes, bridges, etc, etc 100%
Biden
will force unemployed to take jobs: GOP
states attack own voters out of work
Trumpist
judge reinforces evictions/foreclosures: 4 million must move
Trump
runs GOP via Quislings:
Fear of dictator’s wrath controls
next election
Can
old GOP be saved? Trumpists deny 2 party democracy: Americans voted him out
Healthcare sharing
ministries Aliera Sharity caught
misleading coverage; bills unpaid
TrumpCare policies
leave patients with big bills; insurers with big profits; called junk ins
Kiwanis
pays men sexually abused Centralia group home director staff other boys no jail
Trump
may be taken down by his money man like Al Capone: NY meets Al Weisselberg
Lawyers
take HALF sex abuse victim’s fund from Boy Scouts’ 95,000
claims
Hate/fear
used by media manipulator for profits: profit in the hate/fear since we
follow
10% plastic
recyclable only: industry redirects us from their polluting environment
Was
your iPhone hacked? 128 million folks data poached and Apple never told us
Aston
Martin switches to making SUV to repay new owner: fashion mogul Stroll.
Mark Lisser
Knightsbridge caught
selling fake IPO shares $2 million
Matthew Clason CT caught
stole $600,000 by inducing trust and using jt checking
“Gunfights
at the OK Mall” FL: when everyone has a gun; we all can get killed! Wyatt?
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
SC
goes back to firing squad to execute people: “more humane” lawyers say!
Business
buys vax for employees: back to work and more productive/profitable
Employers
who pay for your college education: a life saver for some
Fast
growing companies may help your career grow too
Who owns your account now?
Some
insurers are paying claims electronically: no more waiting for check to fix
it
Car brands your mechanic loves: Paying
$1200 a year in car maintenance?
Brexit
sending business from London to EU: London
headquarters to Paris, Milan
Advisors
earn $170,000 a year from you: paying 1-2%
a year erodes nest egg by 63%
Miracles:
Why men fear the
needle and don’t want vax protection for us
Miracle: 3
“old boys” with guns chase Black and kill him: blame
Black’s past now
1
million more Americans have health care: Biden opens the way for coverage
for all
Normal
life is OK w/shots except where local law/rules require controls says CDC
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/
