Amid all the talk of pension plans' demise, one type of defined-benefit plan is growing fast. Cash Balance Plans are gaining popularity among business owners and medical practitioners who are behind on retirement savings.
Kiplingers reports that many business owners are turning to these plans to turbocharge their retirement savings. Cash-balance plans have generous contribution limits that increase with age. People 60 and older can sock away well over $200,000 TO $300,000 annually in pretax contributions. In 401(k)s, total employer and employee contributions for those 50 and older are limited to only $57,500. Steve and Sinclair review the fundamentals.
After claiming responsibility for the Paris terrorist attacks, ISIS apparently has a new foe, according to Fortune Magazine and other outlets.
Hacker collective ANONYMOUS posted a video Saturday on YouTube in which it declared a cyber war on ISIS (Islamic State In Syria). In the nearly two-and-a-half-minute video, a person wearing the group’s signature Guy Fawkes mask read a statement in French promising that the hacktivist organization would attack ISIS in cyberspace with the ultimate goal of weakening the terrorist organization.
Reports are that 5500 twitter accounts have already been shut down, but police are saying that is not necessarily a good thing. Cyber-clues are important in tracking criminals. Steve and Sinclair review the background of the "hack-tivist" group, Anonymous.
In the Q & A Segment, CFP Murray Titterington and CPA Nick Stefaniak join the A-Team to review and recap Social Security claiming rules and tax scenarios that crop up when one spouse is working and the other is retired.
Obamacare is in full swing. Tax penalties are rising for not having the insurance and the cost of premiums are going up. One big problem: People are making mistakes on the Health Care Marketplace. Without a doubt, choosing a plan can be daunting. A shopper in the Affordable Care Act marketplace can choose from 40 plans on average.
Medicare is also a challenge. A typical Medicare beneficiary can choose from nearly 20 Medicare Advantage plans and 30 standalone prescription drug plans. In selecting plans, consumers are prone to mental shortcuts that often lead to poor choices. Plan labels like the gold, silver, or bronze can fool people. To some, gold sounds better than bronze even if it isn’t. Steve and Sinclair review an investigative report citing several recent studies by high level researchers.
In the Q & A segment, Steve reviews how to prioritize your retirement strategy, and why starting with cash flow liabilities (your total spending) is the most intelligent and simple place to start. Learn key questions your advisor should be reviewing with you to build your plan.
In the 20th Century, nearly 80% of full time employees with more than fifteen years on the job retired with a pension. Today, its closer to 20% and falling. The defined contribution 401k has taken over the defined benefit pension plan. Why? Its much cheaper for the company.
A survey released earlier this year by benefits consultant Aon Hewitt of nearly 250 employers representing 6 million employees found that, of the roughly three-quarters who still offer a defined benefit pension plan, a third were closing them and another third had frozen them.
Of the companies with plans that remained open, 14 percent of companies said they were "very likely" to close them this year, 9 percent said they were "very likely" to freeze them and 5 percent said there were very likely to terminate them. Companies terminating plans typically offer participant a lump sum payout to replace the monthly defined benefit income. Steve and Sinclair review a CNBC report. In the Q & A segment, CPA Nick Stefaniak joins the A Team to discuss year end tax planning and a special offer for Mastering Money listeners and clients of IQ Wealth.
Is your estate plan in order? Do you need a review or update of your living trust, power of attorney, or health care directives? Are your beneficiaries in order and would you like to better understand how a spendthrift provision in your trust could be a benefit? An AB Living Trust is a good start, but an up to date complete package is needed.
The death of comedian Robin Williams provided interesting estate planning issues that address these issues. Although he was hugely successful in movies and television, Williams spoke of financial problems in the years before his death. He had reached a net worth of over $100 million dollars in his prime, according to sources, but two divorces and fewer movie roles had reportedly depleted his assets to approximately $50 million, left completely to his kids in their teens and 20s, plus a home in Tiburon valued at $29 million, left to his wife.
Although he used a trust rather than a simple will, there still were many open ends and a lingering legal battle between his kids and his wife that he had not intended. What happened can be instructive for anyone arranging their affairs with any size estate. Steve and Sinclair review key elements and attorney opinions. In the Q & A segment, estate planning attorney Richard Dwornik and Certified Financial Planner® Murray Titterington with IQ Wealth join the A-Team to discuss special needs trusts and spendthrift trust provisions. PS: see if you can spot the flaw in segment 2 and email us!! Steve@IQWealth.com
Some economists are starting to whisper the "R" word--recession. While it doesn't appear to be on the immediate horizon, its important to remember that the last recession began in December of 2007, but economists only knew that by looking back, after the fact. They officially called the recession of 2008 a full year after it startted. Since World War II, recessions have occurred an average of every five years. The current expansion is more than six years old, beginning in July 2009.
Meanwhile, globally, copper prices keep falling, hitting a new six-year low on fresh signs of a slowdown in China. Economic weakness in the world’s biggest copper consumer has led to reduced demand for the metal, which is used in everything from iPhones to refrigerators and pipes. Shares of mining companies have also suffered. It has directly hit economies like Australia and others. Steve and Sinclair explore multiple reports in the Wall Street Journal regarding the historic deflationary trend worldwide, keeping interest rates very low.
In the Q & A segment CPA Nick Stefaniak joins the A-Team for a lively quiz on tax planning. Fun and informative!
Just over five years after it began offering rides in San Francisco, Uber now operates in 342 cities spread across more than 60 countries. It’s the poster child for the so-called sharing economy, employing some 327,000 freelance drivers in the U.S. and hundreds of thousands more around the world. Almost overnight, it is a $51 billion global company. But it's tax scheme allows it to pay virtually no taxes, since it operates on royalties out of the Netherlands, where royalties are not taxed. Steve and Sinclair review an exploration of Uber's controversial business model reported by Fortune Magazine.
In the Q & A segment, test your knowledge with a financial quiz from the Wall Street Journal.
Cars bursting into flames are never a good thing. So when a Tesla Model S ran over a metal object in Kent, Wash., in October of 2013 and burst into flames, owners, potential customers, investors, and company executives got worried. But rather than a massive recall, costly repairs, and a big financial hit to the car maker, Tesla was able to correct the problem with a software command to all of its cars on the road. A federal investigation into safety was closed four months later, with no recurrences. Tesla is one of many companies finding 21st century solutions to 20th Century problems. The goal: "friction-free" capital--money, labor, and information flowing quick and smooth at less cost.
Geoff Colvin, editor and writer for Fortune Magazine delves into other companies doing the same. Sinclair and Steve review key revelations. In the Q & A, Steve explains how reliance on bonds paying 5% to 8%--as they did in the 20th Century--is a losing proposition in the 21st Century. Interest rates have been cut in half and retirements have doubled in length. Here's what to do about it and some important points to consider about your current portfolio.
In segment 4, The A-Team honors the 240th birthday of the U.S. Marine Corps. We listen to Johnny Cash doing "This Old Tattered Flag". We think you'll like it.
On a Manic Monday when stocks opened down and the Fed is talking about raising rates, what are the smartest moves you can make with your money right now? Eliminating mistakes is job number one. Finding value is job number two. Markets are already near all time highs and interest rates near all time lows. Its an important time to take inventory in your own portfolio.Not everyone wants to own precious metals, but if you do, this may be an opportune time. For example, gold is back at a price point investors could only have dreamed about five years ago. Gold expert Nick Grovich reveals key opportunities in gold, platinum and silver in segments 2 and 3.
In segment 4, Steve reviews the research reported in the Wall Street Journal about why your smart phone could be making you a dumber investor. According to research by Dr. Shlomo Benartzi, a professor and co-chair at the Anderson School of Management at UCLA, paying too much attention minute to minute or day to day means you are going to see the market being down 47% of the time. If you automatically sell when the market is down, you are doomed to failure. It leads to a trader's mentality rather than an investing mentality. Steve reviews a smart way to avoid reacting to TMDTQ (too much data too quick), and getting your retirement plan on strong footing.
According to a study of 4,500 Dutch consumers in the Journal of Economic Psychology, unhappy people save less, spend more and have a higher propensity to consume. It's not just overseas--Americans are spending at a pretty fast clip says the University of Utah. Researchers are finding that we are all spending money--often more than what's coming in--for a new set of reasons.
What drives us—the majority of people in fact-- to spend too much even when we seem to make all the right moves? Steve and Sinclair review an intriguing report from the Wall Street Journal. Then, in the Q & A segment, Steve reviews his method for addressing all of a client's liabilities, and the step by step process involved in building a durable retirement income plan, while also growing capital.