Your Money & Your Life Podcast

Another round of retirement changes are on the way after President Biden passed SECURE Act 2.0 into law on December 23rd. While we’ve been anticipating this legislation for a while, we didn’t know exactly what we be in the final bill.

Retirees and pre-retirees need to spend some time with their advisor to discuss what this legislation means, how it might impact you, and what planning opportunities this could open up.

Here’s some of what we discuss in this episode:

• The required minimum distribution age moved back again. (4:11)
• The complications with taxes surrounding Inherited IRAs still remain. (11:41)
• Significant changes to workplace plans (17:10)
• An update on the New Jersey ANCHOR program (21:45)
• Don’s overall opinion on SECURE Act 2.0. (27:57)

Get in touch with Don and learn more: https://doncashpodcast.com/

Market volatility became the norm in 2022. In this episode, we will be discussing the ups and downs of the last year, from volatility to celebrity news.

Here's some of what we discuss in this episode:

• Current inflation and the outlook for next year. (5:19)
• Examples of volatility throughout this last year. (14:47)
• Big events/drama that happened in 2022. (20:34)

Get additional financial information: https://doncashpodcast.com/episodes/

We are heading toward Christmas and The New Year at lightning speed. We are only weeks away from 2023. 

It looks like we came off Black Friday and Cyber Monday with lots of shoppers and over the past week we have had better-than-expected economic data, yet the stock market has dropped. What are we to make of that??

Right now, all of the pundits are trying to read the tea leaves (so to speak) about what is likely to happen at the next Federal Reserve Meeting this week.

Oddly enough, it seems like bad economic news – higher unemployment, weaker consumer spending, and home sales are good for the stock market. It means the Federal Reserve is likely to hit the brakes on rate increases.

A few things to keep in mind as we head into 2023. 

The law pending in Washington to change the IRA rules yet again has not yet been signed into law. They are calling this The Secure Act 2.0, the changes are designed to do things like - 

Expanded access to retirement plans at work. Additional investment options; Increase savings. Simpler plan administration.

The big change for many people planning is a change to the age of the fist Required IRA distribution age from 72 to 73,74,75. This should be known as the “First Mandatory Income Tax Age” for your IRA. The IRS forces you to take money from your IRA and pay taxes. 

Will the Bill pass this year or next year?

So, what moves can people consider now in their end-of-year planning?

A few things come to mind when we do year-end planning with clients –

Roth Conversions – 

The historically low tax rates that exist now expire BY LAW in 3 years. We have an opportunity to move money from the tax later bucket (Traditional IRA) to the tax never bucket (The Roth IRA)

Strategize charitable deductions – 

Last year there was a $300 or $600 donation deduction for non-itemizers. NOT this year. However, due to the increase in the standard deduction in the 2017 tax change.  Currently, 87% of people take a standard deduction. If you are married it’s almost $26,000, If you are over 65 it’s about $29,000.  Why not consider “bunching” your charitable contributions?

What about gifting from an IRA?

That is a great move for someone over the age of 70 1/2 The gift is Called a Qualified Charitable Distribution 

Is this an option for you?

We hope you enjoyed your Thanksgiving and are looking forward to the upcoming holidays. 

Here's some of what we discuss in this episode:

• How economic news affects the stock market. (3:44)
• We discuss the first required IRA distribution age changes. (6:20)
• What to consider if you’re in a higher tax bracket or don’t plan on leaving wealth to family. (10:31)

Get additional financial information: https://doncashpodcast.com/episodes/

Happy Thanksgiving!

We wish you all the blessings of the holiday as we spend time with family and friends and gather for the long Holiday weekend.

As we rapidly move From Thanksgiving into the Christmas season and New Year’s Day (I can’t believe it’s almost 2023), we want to talk about finishing strong as well as touch on the difference between knowledge and wisdom, the big FTX scandal, and how good thinking affects our planning decisions and helps us avoid disasters.

The FTX bankruptcy is a huge scandal. It comes from the Theranos health technology outrage earlier in the year.

It’s pretty complex but comes down to the fact that a lot of smart young people, mainly only in their late 20’s ran the company and many smart hedge funds and investors lost a lot of money. It’s a collapse that rivals Enron and Lehman brothers.

FTX was basically a cryptocurrency exchange that traded a variety of digital tokens like Bitcoin, Ethereum, Dogecoin, and many others. The entire house of cards came crashing down last week. Billions of dollars just vanished overnight. The CEO, a guy called Sam Bankman-Fried AKA SBF is on the run somewhere in the Bahamas, Dubai, or Hong Kong trying to escape extradition. The young man who ran the company SBF started the company at age 27 only 3 years ago.

It went from a value of zero to 35 billion in 2 years. (1 st red flag) However, he was a super smart MIT graduate who dressed in ratty tee shirts, wore shorts, white sox, and sneakers with a mop of unkempt hair. He purported to “not care” about money and was interested in “Effective Altruism”, the idea of doing the best with money, which is a great idea. It attracted a lot of smart young people to the company and a lot of investors too. However, it was used as a front and type of “virtue signal” saying 'look at how good a person I am'.

You may not have heard much about this company, but your kids and grandkids know about it and may have been sucked into it. FTX ran ads all over social media and spent tens of millions of dollars on Super Bowl Ads with celebrities pitching the scheme. (Tip – Tom Brady doesn’t know much about Cryptocurrency)

How do people get sucked into these things?

Often, it comes down to understanding the difference between Knowledge and Wisdom and not asking the right questions. Wisdom is defined as the quality of having experience, knowledge, and good judgment often developed over many years of living.

Many of us have lived long enough and saved diligently over a long period of time and made mostly good decisions that have averted these types of scandals. (Some have not) However, when it comes to scams like FTX many young people in our lives fall victim to the lure of technology, easy money, and the story of saving the world by “effective altruism”. The wise people ask questions and many just know from experience if something looks and seems too good to be true.

Be sure to ask the right questions.

Finally, let’s reflect this week on all of the good things that we are thankful for like living in this country, family, friends, freedom health, and remember and help those who are struggling without these things.

Happy Thanksgiving!

Don

For those who liked to read “Cliff Notes” in college here are the themes and time stamps:

• Have you heard about the FTX scandal? Here are the details. (5:50)
• How people fell for FTX and why you must be careful not to confuse knowledge and wisdom. (12:12)
• Sometimes wanting to believe in something you shouldn’t, can get you into trouble. (14:56)

Get additional financial information: https://doncashpodcast.com/episodes/

The elections are over! (At least most of them are) Now what?

It seems like, over the past month, we have been bombarded with nasty political ads or commercials by Joe Namath, Jimmy JJ Walker, and Tom Selleck pitching Medicare plans. At least the political ads are over for now (except for Georgia). We just have to put up with the Medicare ads for the next month.

In this episode, we discuss the election results and the effects on our planning for the remainder of this year and into 2023. Can you believe it’s only 6 weeks away? It looks like the next two years will bring a solidly divided government. What will that mean to you and your family?

I’ll bet you didn’t know – Every year since 1950 after a midterm election, the stock market has gone up regardless of the party in power! Past performance is no guarantee of future performance (You knew I would say that). Of course, this year came with a very volatile market; interest rates, a war overseas, and soaring inflation, and it’s left many anxiously attempting to search for answers.

Let’s take look a look at history and some facts that might bring some clarity for the future.

Here’s some of what you’ll learn in this episode:

• Here we discuss how the market changes during elections. (7:15)
• How current issues and market changes reflect history. (12:52)
• Some big changes you should expect in the future. (20:00)

Additional resources: 

https://www.prnewswire.com/news-releases/despite-recent-sp-losses-of-nearly-25-federal-government-still-requires-retirement-withdraws--nationally-recognized-ira-expert-donald-w-cash-interviewed-by-the-wall-street-journal-301670524.html

You’ve probably seen the commercials with the legendary quarterback, Joe Namath or Tom Selleck and William Shatner (Captain Kirk). They are selling Medicare Advantage plans letting us know that now, October 15th through December 7th is open enrollment season. So, what is a Medicare Advantage plan and should you get one?

On today’s show, we are going to discuss Medicare with expert Ray Martin. This will be our 2nd annual show with Ray. We will be covering the different types of plans, premiums, and tips you should be aware of as you reach age 65 and beyond.

Medicare is great for retirees but it can be confusing to navigate. Ray Martin joins us today, the author of The Nuts and Bolts of Medicare, to explain the basics of Medicare and open enrollment. 

Signed into law in 1965, around 10,000 baby boomers join Medicare every day. Through the years Medicare has expanded into a comprehensive and successful medical plan. There are now multiple parts of Medicare including Medicare supplements.

What is Medicare “A” and “B”? These are the original foundational parts of Medicare. “A” will cover your hospitalizations, even elective surgeries. You are paying for part “A” through your working years. How much they take out of every paycheck depends on your pay. 

“B” is going to cover your doctor visits, specialist appointments, lab tests, physical therapy, and more. You’ll pay a monthly premium for this plan and it’s usually around $170 per month.  Believe it or not next year in 2023, the premium is going DOWN to $165. I can’t think of many things that have come down in price over the past year. Certainly, we will all accept the relief. However, the premium could be much higher for higher-income earners. 

Part “B” is going to cover about 80% of your medical costs. These general parts of Medicare cover a lot of medical costs, but there are gaps that can lead to big financial bills if you are not careful. That’s where supplemental coverage can come into use.

What they call “Medigap” are supplemental plans that can help cover gaps in your basic Medicare plan. 

The other option is what Broadway Joe, Tom Selleck and Captain Kirk are pitching – Medicare Advantage. When you sign up for an advantage plan you are signing over your Medicare benefits to the insurance company. In exchange for the plan, you will get coverage through an insurer like Humana (For example). You’ll want to do your research and make sure this type of coverage can support you and where you would like to receive healthcare in the future. Always get and read over your summary of benefits!

Part D is the newest section of Medicare. It’s critical to be sure to match the plan to your specific situation, particularly the medications that you need. 

A great resource is www.mymedicare.com or https://www.ssa.gov/medicare/. You can also call the toll-free number 1(800)772-1213. Make sure you understand the flexibility and limitations of the Medicare open enrollment season. 

Being confident in your healthcare future is a big part of being confident in your overall retirement plan.

Here’s some of what you’ll learn in this episode:

• The government announced the inflation increase in Social Security accounts, and it’s the largest number in 40 years. (1:41)
• How Health Savings Accounts work with Medicare. (12:15)
• What you need to know about the Income-Related Monthly Adjustment. (22:01)

Additional resources: 

Medicare Resources:

http://martinassociatesmedicare.com/book/

https://www.kiplinger.com/retirement/medicare-costs-to-go-down-in-2023

https://www.kiplinger.com/retirement/medicare/medicare-open-enrollment-starts-now-what-you-need-to-know

https://faq.ssa.gov/en-us/Topic/article/KA-01951

Weather enthusiasts and retirement planning worlds collide… Each Fall we spend a lot of time watching and listening to the news and the Weather Channel getting reports of developing hurricanes and are treated to lots of updated graphics to bring us a refresher on how hurricanes work. So, let’s take the opportunity to see what we can learn about retirement planning from a discussion about hurricanes.

In this episode, we will talk about the volatility of the market. Are market dips something you should be wary of? What global events cause market changes? Let’s dive into some of the things that often make us lose focus as we invest for retirement.

Here’s some of what you’ll learn on this episode:

• Why you need to accept that the value of the stock market will drop at some point. (6:11)
• You must be careful not to be influenced by the wrong people. (10:44)
• Here are some things you should look out for over the next few months. (16:26)

Additional resources: 

The “You Earned It, You Keep It Act” -

https://www.govtrack.us/congress/bills/117/hr8717

Workers leaving the workforce: 

https://www.nytimes.com/2022/05/19/business/economy/older-workers-labor-force.html

IRS Loses records –

https://www.crapo.senate.gov/news/in-the-news/weekly-column-why-did-the-irs-destroy-30-million-paper-returns

Emergent Intelligence –

https://unanimous.ai/emergent-intelligence-from-a-jar-of-beans/

Sir Issac Newton Stock Loss –

https://physicstoday.scitation.org/doi/10.1063/PT.3.4521#:~:text=However%2C%20he%20did%20lose%20a,a%20good%20bit%20more%20besides.

In a normal year, just one of these topics would be significant news for us to discuss, but 2022 is filled with headlines that impact retirement planning. On this episode, we’re going to provide an update on inflation and the indicators to be watching, share stats on the early retirement trend, and give you the truth on the latest proposed legislation that impacts Social Security.

Here’s some of what you’ll learn on this episode:

• What’s the latest on inflation? (3:31)
• Stats on the early retirement trends we’re seeing. (8:07)
• What other effects have we seen due to COVID? (9:16)
• The considerations you need to weigh for early retirement. (13:02)
• The details on the ‘You Earned It, You Keep It Act’ and taxes. (15:46)
• What’s the catch to this new Social Security legislation? (18:55)
• Phil’s big takeaway from this bill as it relates to retirement. (20:31)

Additional resources: 

The “You Earned It, You Keep It Act” -

https://www.govtrack.us/congress/bills/117/hr8717

Workers leaving the workforce: 

https://www.nytimes.com/2022/05/19/business/economy/older-workers-labor-force.html

Washington recently passed the Inflation Reduction Act, which on the surface appears to be aimed at solving the inflation problem. But there’s much more inside the bill, including a few different items that directly impacts financial planning. We’ll break down this new legislation on the podcast and highlight other laws that might be on the way.

Here’s some of what you’ll learn on this episode:

• Don’s initial thoughts on the Inflation Reduction Act and how it impacts individuals. (5:10)
• Why the SALT cap was being discussed a lot in New Jersey. (7:37)
• What we need to know about the SECURE Act part 2. (10:21)
• Required Minimum Distribution age pushing back even more? (15:37)
• How to calculate RMDs from inherited IRAs and personal accounts. (19:16)

Inflation Reduction Act resources – 

https://www.ncoa.org/article/what-the-inflation-reduction-act-means-to-older-adults

https://www.morningstar.com/articles/1109390/the-inflation-reduction-acts-impact-on-retirees

NJ Property Tax Freeze – https://www.state.nj.us/treasury/taxation/ptr/

For more, visit us online: http://doncashpodcast.com

For economic geeks like ourselves and those old enough to remember, this week will be seen as the anniversary of one of the greatest bull markets in history. It was on August 12, 1982, that the Dow Jones Industrial Average dropped to its low of 777 (lucky number) —almost precisely where the Index had closed in January 1964, more than 18 years earlier!

Here’s some of what you’ll learn on this episode:

• Human nature doesn’t change and we’re still prone to the same financial mistakes today that we were back then. (5:10)
• The issues the dealt with through the 60s and 70s seem remarkably similar to what we’re experiencing now. Guess what coming out of those tumultuous years? (7:49)
• Why proper diversification could have produced really good returns during The Lost Decade to start this century. (11:25)
• The major mistakes that we make when we’re near or in retirement. (16:40)

Visit us online: http://doncashpodcast.com