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Repeated Tax Reforms Raise The Risk Of Doing Nothing
The U.S. Tax Code has been reformed more and more over the past few decades. From 1940 to 1979, 24 major tax laws were enacted, compared with the 40 years from 1980 to 2019, when 63 major tax revisions were enacted.
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Boomers Working Past Age 65 Are A Surprise Boost
Americans over age 65 are staying in the labor force more often than expected, brightening the U.S. economic forecast and the outlook for U.S. stocks.
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Study: Wall Street's Tactical Methodology Isn't Working
Wall Street firms spend a great deal of time and money trying to forecast relative performance of stock sectors, styles, markets and asset classes, and on convincing investors to buy their advice. However, a comprehensive new study indicates Wall Street's tactical approach is unwise.
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Three Major Investing & Tax Planning Trends For 2020
2% U.S. Growth & Low Rates. The latest indication of what to expect on interest rates and economic growth came on December 17th, 2019, in an interview with Robert S. Kaplan, President and Chief Executive Officer, Federal Reserve Bank of Dallas. "We expect, again, 2%-plus growth, 2% growth for next year, unemployment rate around 3½%.," Mr. Kaplan told the Council on Foreign Relations. "We'll have some firming in inflation gradually toward 2%. And I think with that profile, I think the right-at 1 ½-1 ¾ fed funds rate, I think the right thing for us to do is stay right where we are unless something changes materially on the upside or the downside." In addition, on December 11th, the Federal Reserve released its latest expectations for growth, inflation, and unemployment for 2020, which are highlighted in the chart.
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SECURE Act Is Law: Last Call For 2019 Tax Savings
We've warned about the SECURE Act's effects on retirement income planning in previous articles over the past nine months, and this is a final call to action. If you're in any of the following four retirement income planning situations, you have one last chance to reduce your tax bill by acting before January 1st, 2020:
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Performance Anxiety: A Leading Cause Of Investor Dysfunction After Age 55
Are you nearing retirement and worried about your portfolio's performance? Do you fear outliving your money?
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How Worldwide Demographics Affect Your Portfolio
While China, Japan, Germany, and other major economies are grappling with a decline in their working-age population in the decades ahead, the U.S. working-age population is expected to grow. Since growth in the size of the labor force is one of the two determinants in economic growth, it's a key fundamental factor that will shape the future of financial markets. This is a key fundamental affecting long-term personal financial plans. It's important and it has practical consequences on retirement portfolios.
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Financial Lifeboat Drill For Mustering In Emergencies
Put yourself through this brief lifeboat drill, to prepare for things suddenly going wrong. Everything may be fine right now, in the eleventh year of the economic expansion. That's a sensible time to test your ability to muster the resources to respond to a range of emergency scenarios.
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Hiddenomics™ Challenge: Find The Leading Economic Indicators
The leading economic indicators (LEI) are part of this picture, but this quiz will help you see the forest for trees. Just like this picture of change, the economic picture is always changing right in front of us, making it hard to see even the most obvious trends unfolding in front of us.
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20-Second Year-End Tax Planning Quiz For Pre-Retirees
If you're in your 50s or 60s and own an interest in a business or professional corporation, knowing the answers to these four questions can lower your 2019 federal tax bill sharply, while jumpstarting a tax-advantaged retirement income plan.
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Financial Briefs
Repeated Tax Reforms Raise The Risk Of Doing Nothing
The U.S. Tax Code has been reformed more and more over the past few decades. From 1940 to 1979, 24 major tax laws were enacted, compared with the 40 years from 1980 to 2019, when 63 major tax revisions were enacted.
The Tax Cuts And Jobs Act was signed into law in December 2017, and now the SECURE Act, which was signed into law in December 2019, has significantly changed 2020 rules affecting IRAs and estate planning. With the $1 trillion current budget deficit and soaring U.S. Treasury long-term debt, another new tax law in 2021 is very possible.
The SECURE Act has made tax planning more important to retirement income decisions, IRA beneficiary choices, lifetime annuity income, lifetime wealth transfers, and estate planning as well as investment opportunities open to affluent and ultra-high net-worth individuals.
Strategic tax planning is boring and detailed, and the vast majority of people are too busy with other priorities, creating inertia that stops most people from learning what to do. Consequently, most people often do nothing.
Despite the effort to simplify tax laws since the 1980s, the repeated revisions have made the tax code more idiosyncratic. Tax planning is much more important in wealth management now and the cost to individuals of doing nothing about tax planning has risen, upping the value of strategic tax advice about retirement income planning from a professional.
This article was written by a veteran financial journalist. While these are sources we believe to be reliable, the information is not intended to be used as financial or tax advice without consulting a professional about your personal situation. Tax laws are subject to change. Indices are unmanaged and not available for direct investment. Investments with higher return potential carry greater risk for loss. No one can predict the future of the stock market or any investment, and past performance is never a guarantee of your future results.
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