An interesting article by my friend Janet Tyler Johnson …..
I’m sick of politics. I’m glad the election is over. I wish our politicians were focusing more on job creation than fighting about something they should have solved two years ago, but here we are.I really believe this fiscal cliff talk has as much to do with politics than anything else. And the media is having a field day since the election is over and there isn’t a whole lot of other stuff to talk about.
via The Fiscal Cliff — My Take.
President Obama’s Affordable Care Act, which was deemed constitutional Thursday by the Supreme Court, includes some major tax changes that will take effect next year. Here’s a refresher course on how sweeping health-care reform will impact individual taxpayers like you.
Right now, the Medicare tax on salary and/or self-employment (SE) income is 2.9%. If you’re an employee, 1.45% is withheld from your paychecks, and the other 1.45% is paid by your employer. If you’re self-employed, you pay the whole 2.9% yourself.
Starting in 2013, an extra 0.9% Medicare tax will be charged on: (1) salary and/or SE income above $200,000 for an unmarried individual, (2) combined salary and/or SE income above $250,000 for a married joint-filing couple, and (3) salary and/or SE income above $125,000 for those who use married filing separate status. For self-employed individuals, the additional 0.9% Medicare tax hit will come in the form of a higher SE bill.
via What ObamaCare Means for Your Taxes – SmartMoney.com.
As retirees and their planners adjust to the ‘new normal’ – a world of lower-than-average returns for the foreseeable future, many have questioned whether the historical safe withdrawal rate research is still valid. After all, if returns will be below average in the coming years, doesn’t that imply safe withdrawal rates must be below average as well? In point of fact, though, safe withdrawal rates do not depend on average returns in the first place; the worst safe withdrawal rates in history that we rely upon are actually associated with 15-year real returns of less than 1%/year from a balanced portfolio! Accordingly, given current bond yields, dividend yields, and inflation, if the current environment for today’s retirees will result in a “new record low” safe withdrawal rate, the S&P 500 would still have to be no higher in 2027 than it was in 2007 or even 2000! On the other hand, merely projecting equities to recover to new highs by the end of the decade or generating a mid-single-digits return would actually represent an upside surprise, allowing for higher retirement spending than 4.5% safe withdrawal rates!
The inspiration for today’s blog post is some recent conversations I’ve had with other planners, who have questioned whether the safe withdrawal rate research is still relevant in today’s low return environment. “In the ‘new normal'”, the planner usually states, “returns are likely to be lower than historical averages for both stocks and bonds. Doesn’t that mean historical safe withdrawal rates are unrealistic?”
“Not at all,” I reply, “Because historical safe withdrawal rates aren’t based on historical averages. They’re based on historical worst case scenarios.”
read the complete article here: http://t.co/ABg2nMN3
In between goals is a thing called life, which has to be lived and enjoyed. http://t.co/iS4AqVIA
Looking to increase your retirement savings rate? @hourlyplanner tells how to eat the elephant one spoonful at a time. http://t.co/ccqlKhMs
We already know that aging takes its toll on us physically. For a while, we can almost fool ourselves into thinking the effect is minimal but this illusion is hard to maintain when we use an objective yardstick to measure the decline.
For instance, I feel like I hit the golf ball just as well as I did 10 years ago but my handicap tells me otherwise. Similarly, I don’t run nearly as fast as I could 20 years ago; not that it feels that way but the stop watch doesn’t lie.
Getty ImagesAt 19, Norwegian chess genius Magnus Carlsen became the youngest player to ever to top the list of champions.
Is it possible that our mental abilities also start to diminish a lot sooner than we think? If we look around us, we can find some objective benchmarks that suggest this is indeed the case. Take playing chess for example, which seems like a purely mental pursuit. Surely players keep on improving year after year with more experience and practice. One would think a wily 60-year-old should be able to trounce a callow 20-year-old who has the same potential. A look at the world chess rankings tells a different story.
via Investing: Do it like a 20-year-old | Retirement | Personal Finance | Financial Post.
If I ever found myself making one of these financial moves, I’d be frightened for my financial future:1. Having kids and no life insurance. If you die without life insurance, your kids will, at a minimum, be stuck with your funeral bill. Get a simple term life insurance policy, even if it’s just $100,000.2. Living without any health insurance. There’s a lot of noise about health insurance premiums being un-affordable. Don’t let that sway you from checking rates and looking into a high-deductible plan. If you can afford your iPhone and car payment, you can afford health insurance. This could be the difference between a $10,000 medical bill and a $1,000,000 medical bill.
via 13 Money Moves That Scare the Heck Out of Me.
Check out my article on setting goals on The Wall Street Journal’s Wealth Manager blog: http://t.co/0Sn5JFSt
The Resource Circle http://t.co/3QF0A1v3 I believe this can be a great conversation piece. — Nathan Gehring (@nathangehring)