Doctors, dentists and business owners with more than $321,400 of 2019 adjusted gross income have one last chance not to pass up on this tax and retirement planning opportunity.
The Fed cut rates again on October 30th, for the third time in 2019. What's it mean to your long-term financial plan?
It's notable that the stock market in 2019 has not suffered a 10% correction on worries about the China trade confrontation, the manufacturing slump or concerns about the U.S. political situation - three bad-news narratives currently haunting markets.
When you are halfway through your 70th year on the planet, U.S. law says you must start taking money out of IRAs, SEPs and SIMPLE plans, as well as 401(k), 403(b) and other U.S. Government qualified retirement plans. Only a Roth IRA account, which you fund with after-tax dollars, is exempt from federally-required minimum distributions (RMDs).
How much should you withdraw from your tax-deferred 401(k) or IRA, and in what form? Here's a brief summary of four retirement income withdrawal methods to help you optimize the decumulation of your retirement income portfolio prudently.
The American Opportunity Credit (for college students) and the Lifetime Learning Credit - for undergrad, graduate and vocational students - are the two education tax credits available from the federal government. Students can claim either of the two credits for schooling costs, or their parents can - provided they don't opt for married filing separately.
In the first and second quarters of 2019, productivity of U.S. workers surged. Meanwhile, the labor force participation rate was higher than expected by the U.S. Government's research arm, the nonpartisan Congressional Budget Office.
Negative rates abroad have driven down bond yields in the U.S. and could make the stock market multiple expand.
Negative rates abroad are driving down bond yields in the U.S., which could make the stock market multiple expand. Investing always carries risk, and current financial economic conditions are unprecedented. For the first time in modern history, you have to pay the bank to hold your money in Europe! You have to pay a bond issuer to hold your money. Here's a factual analysis of factors driving what's happening and how it might affect your portfolio.
For years, year-end tax tips were delivered in this space every September, but this year's story is a real cliffhanger. The twist in the plot is the pending tax legislation. Ironically known as the SECURE Act, an acronym, the legislation is officially named, "Setting Every Community Up for Retirement Enhancement." The bill is likely to cause frantic last-minute tax maneuvering at the end of 2019.
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Is The Inverted Yield Curve The Financial Fakeout Of 2019?
The day the yield curve inverted, on Wednesday, August 14th, stocks plunged and financial headlines turned grim.
Should you worry? Or is the yield curve inversion the financial fakeout of 2019?
"Longer-term rates below shorter term rates are a clear signal from bond investors that they think the United States economy is on the downswing," reported The New York Times' senior economics correspondent, Neil Irwin, "that its future looks worse than its present." But this widely-reported storyline in the financial press misses important context.
In the past, when the yield curve inverted, it was usually because investors saw fundamental economic measures deteriorating, but that's not happening now. Rear view mirror investing — assuming history will repeat itself — is not smart in current conditions, because unprecedented negative yields in Europe and Japan make the road ahead different this time.
At the same time stocks plunged on recession fears triggered by the yield curve inversion, the retail sales report from the U.S. Census Bureau in the 12 months through July surged 3.7%! That followed a 3.8% spike in June and a 3.1% rise in May. Since 70% of U.S. economic activity is consumer driven, the continued strength in retail sales extinguished recession fears. When consumers are spending like this, a recession cannot be unfolding.
The retail numbers are part of a growing body of evidence that the yield curve may be making a recession look much closer than it actually is. It's a broken indicator.
This doesn't mean the yield curve is not a useful forecasting tool. It just means it's not a useful tool in the current economic situation. A hammer can't fix every problem.
And things really are different this time because the current inversion of the yield is caused by an unprecedented condition: Negative yields in Europe and Japan, which are depressing yields on long-term U.S. bonds!
From a prudent professional's perspective, the inversion is a technical market problem of supply and demand and not a "real" economic problem. It's wise to plan on your retirement portfolio's fixed-income allocations yielding lower returns in the years ahead, but that doesn't mean the U.S. is headed for a recession. Fears about the inversion of the yield curve heightened stock market volatility but that does not mean the decade-long, expansion-fueled bull market is over. It seems likely to turn out to be the financial fakeout of 2019.
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