Tehachapi's Online Community News & Entertainment Guide
Tehachapi's Online Community News & Entertainment Guide
Sorted by date Results 26 - 50 of 73
The passage of the SECURE Act in 2019 effectively eliminated the stretch IRA, an estate planning strategy that allowed an inherited IRA to continue growing tax deferred, potentially for decades. Most nonspouse beneficiaries, including children and grandchildren, can no longer stretch distributions over their lifetimes. Moreover, proposed IRS regulations require most designated beneficiaries to take annual required minimum distributions (RMDs) within the 10-year distribution period if the...
Here are some things to consider as you weigh potential tax moves before the end of the year. Set aside time to plan Effective planning requires that you have a good understanding of your current tax situation, as well as a reasonable estimate of how your circumstances might change next year. There's a real opportunity for tax savings if you'll be paying taxes at a lower rate in one year than in the other. However, the window for most tax-saving moves closes on Dec. 31, so don't procrastinate. D...
If you worry about your retirement investments during market downturns, you're not alone. Unfortunately, emotions are often the enemy of sound investing. Here are some points to help you stay clear-headed during periods of market volatility. Markets can rebound Historically, even the worst bear market has bounced back and eventually gone on to reach new highs. In fact, since 1970, bear markets have lasted an average of 14 months. A chance to buy lower If you're investing a set amount of money...
Imagine stepping into an elevator and realizing that you're about to spend the 30-second ride with someone who could make your retirement dreams come true - if only you could explain them before the doors open again. How would you summarize your financial situation, outlook, aspirations and plans if you had 30 seconds to make an "elevator pitch" about achieving one of your most important goals? Answering that question, and formulating your own unique retirement dream elevator pitch, could help...
Index funds, which try to match the performance of a particular market index, have drawn increasing interest from investors, but traditional actively managed funds still hold more assets (see chart). There is ongoing discussion in the financial media about which approach is most effective, but there may be good reasons to hold both in a well-diversified portfolio. Here are some pros and cons to consider. A simple approach Index funds typically hold the same securities in the same proportions as...
Global economic growth is projected to drop from a 5.8% rate in 2021 to 3.3% in 2022, as the world grapples with repercussions of the Russia-Ukraine war and ever-changing conditions wrought by the pandemic. Growth forecasts of 3.3% for the United States and 2.4% for the euro area in 2022 (down from 5.6% and 5.2%, respectively, in 2021) reflect the prospect of supply constraints along with rising inflation and interest rates. China's growth is projected to slow to 5.1% in 2022 from 8.1% in 2021...
With more than 7,400 mutual funds to consider in the United States alone, some investors may feel overwhelmed by the thought of deciding which ones to select for their portfolios. At the same time, most mutual fund-owning households base their purchase decisions on these measures: historical performance (94%), investment objectives and risk potential (91%), and fees and expenses (90%).1 Fortunately, reading a mutual fund prospectus is a key way to learn important details about your investment...
Baseball stadiums are filled with optimists. Fans start each new season with the hope that even if last year ended badly, this year could finally be the year. After all, teams rally mid-season, curses are broken, and even underdogs sometimes make it to the World Series. As Yogi Berra famously put it, "It ain't over till it's over."1 Here are a few lessons from America's pastime that might inspire you to take a fresh look at your finances. Proceed one base at a time There's nothing like seeing a...
It is widely recognized that financial literacy impacts a person's overall economic success. In fact, studies have shown that individuals who are exposed to economic and financial education at an early age are more likely to exhibit positive financial behaviors when they are older (e.g., maintaining high credit scores, accumulating wealth). As a result, many states are requiring high school students to take a course in either economics or personal finance before they graduate.1 Whether you are...
Every year, the Internal Revenue Service announces cost-of-living adjustments that affect contribution limits for retirement plans and various tax deduction, exclusion, exemption, and threshold amounts. Here are a few of the key adjustments for 2022. Estate, Gift, and Generation-Skipping Transfer Tax • The annual gift tax exclusion (and annual generation-skipping transfer tax exclusion) for 2022 is $16,000, up from $15,000 in 2021. • The gift and estate tax basic exclusion amount (and gen...
After the wild ride of 2020, the U.S. stock market was relatively calm in 2021, but there was still plenty of volatility. There were 55 days when the S&P 500 index - generally considered representative of U.S. stocks - closed with a rise or fall of 1% or more from the previous day's closing price. And there were seven days with a change of more than 2%.1 The good news for investors is that the trend was generally upward, and the S&P 500 ended the year up almost 27%.2 But no matter which way the...
HENRY is a catchy acronym for "high earner, not rich yet." It describes a demographic made up of young and often highly educated professionals with substantial incomes but little or no savings. HENRYs generally have enviable career prospects, but many of them feel financially stretched or may even live paycheck to paycheck for years, especially if they are working in cities with high living costs and/or facing large student loan payments. If this sounds like you, it may be time to shed your...
During your working years, you’re accustomed to living on an income from your job. When you retire, the income from employment ends. Social Security provides a steady income, but it probably isn’t enough to meet your retirement income needs. An annuity is an option that can provide a stream of income during retirement. With most annuities, there are usually two choices available to generate a steady income: annuitization and lifetime withdrawals from a guaranteed lifetime withdrawal benefit. Her...
According to a March 2021 survey, an estimated 2.8 million Americans ages 55 and older decided to file for Social Security benefits earlier than they expected because of COVID-19. This was about double the 1.4 million people in the same age group who said they expected to work longer, presumably due to pandemic-related financial losses.1 Many older workers were pushed into retirement after losing their jobs, and others may have had health concerns. Still, it appears that work-related stress and...
Here are some things to consider as you weigh potential tax moves before the end of the year. Defer income to next year Consider opportunities to defer income to 2022, particularly if you think you may be in a lower tax bracket then. For example, you may be able to defer a year-end bonus or delay the collection of business debts, rents, and payments for services in order to postpone payment of tax on the income until next year. Accelerate deductions Look for opportunities to accelerate...
During March 2021, the widening availability of COVID-19 vaccinations, signs of improving economic conditions, and a third, $1.9 trillion stimulus package brought about more optimistic growth projections. Even though a healthy economy could be good news for many businesses and the financial markets, rising inflation expectations caused a multi-week sell-off in U.S. government bonds that pushed up longer-term yields and sent the Nasdaq Composite Index into correction territory on March 8, 2021.1...
Debt poses a growing threat to the financial security of many Americans - and not just college graduates with exorbitant student loans. Recent studies by the Center for Retirement Research at Boston College (CRR) and the Employee Benefit Research Institute (EBRI) reveal an alarming trend: The percentage of older Americans with debt is at its highest level in almost 30 years, and the amount and types of debt are on the rise. Debt profile of older Americans In the 20-year period from 1998 to...
As the beneficiary of an inheritance, you are most likely to be faced with making many important decisions during an emotional time. Short of meeting any required tax or legal deadlines, don't make any hasty decisions concerning your inheritance. Identify a team of trusted professionals Tax laws and requirements can be complicated. Consult with professionals who are familiar with assets that transfer at death. These professionals may include an attorney, an accountant and a financial and/or...
For the past decade, U.S. stocks have outperformed foreign stocks by a wide margin, due in large part to the stronger U.S. recovery after the Great Recession. In general, U.S. companies have been more nimble and innovative in response to changing business dynamics, while aging populations in Japan and many European countries have slowed economic growth.1 Despite these challenges, some analysts believe that foreign stocks may be poised for a comeback as other countries recover more quickly from...
If you lose a job, switch employers or step into retirement, you might consider rolling your retirement plan savings into an IRA. But this isn't your only option; it could make more sense to keep the money in your previous employer's plan or move it to your new employer's plan (if allowed by the plan). You could also cash out, but that's rarely a good idea. Withdrawals from tax-deferred retirement accounts are taxed as ordinary income, and you could be hit with a 10 percent tax penalty if you...
Buying a home is a long-term commitment, so it's not surprising that older Americans are much more likely than younger people to own their homes "free and clear" (see chart). If you have paid off your mortgage or anticipate doing so by the time you retire, congratulations! Owning your home outright can help provide financial flexibility and stability during your retirement years. Even if you still make mortgage payments, the equity in your home is a valuable asset. And current low interest...
Qualified retirement plans, such as IRAs and 401(k)s, have many rules, and some of them can be quite complicated. Take the following quiz to see how well you understand some of the finer points. 1. You can make an unlimited number of retirement plan rollovers per year. A. True B. False C. It depends 2. If you roll money from a Roth 401(k) to a Roth IRA, you can take a tax-free distribution from the Roth IRA immediately as long as you have reached age 59½. A. True B. False C. It depends...
When it's time to prepare the next generation for a financial legacy, you might want to bring your family members together to talk about money. But sitting down together isn't easy, because money is a complicated and emotionally charged topic. Rather than risk conflict, your family may prefer to avoid talking about it altogether. If your family isn't quite ready to have a formal conversation, you can still lay the groundwork for the future by identifying and sharing your money values - the...
As people move through different stages of life, there are new financial opportunities and potential pitfalls around every corner. Here are common money mistakes to watch out for at every age. Your 20s & 30s Being financially illiterate. By learning as much as you can about saving, budgeting, and investing now, you could benefit from it for the rest of your life. Not saving regularly. Save a portion of every paycheck and then spend what's left over - not the other way around. You can earmark...
Every year, the Internal Revenue Service announces cost-of-living adjustments that affect contribution limits for retirement plans and various tax deduction, exclusion, exemption and threshold amounts. Here are a few of the key adjustments for 2021. Estate, Gift and Generation-Skipping Transfer Tax • The annual gift tax exclusion (and annual generation-skipping transfer tax exclusion) for 2021 is $15,000, the same as in 2020. • The gift and estate tax basic exclusion amount (and gen...
