FINANCIaL
FIELd NOTES
Why Average Life Expectancy Is Deceptive
There’s an old financial planning joke about asking a retiree when they would like for us to plan their funeral. It’s a bad joke but the reality is that when we are planning for a lifetime, we do have to make an educated guess on when that life might end.
I often get pushback when I suggest as late as 90 or 95. That pushback is fair given that the average life expectancy is about 77 – 15 to 20 years less than I would typically plan for. But average life expectancy can be deceiving. ..
Tax Reporting for Venmo and Other Transaction Services
Last year the IRS began announcing changes to the tax reporting requirements for transactions on services like Venmo, Paypal, CASH, and others. Their concern was that businesses were not reporting the income that they received on these services.
They were planning to reduce the tax reporting threshold for 2022 goods and services received from $20,000/year to $600/year, which would dramatically increase the number of people subject to the reporting requirements…
How the Media Creates “Experts”
I was recently listening to a podcast hosted by a few advisors who are also popular in financial media. One of them had recently been brought on by several media outlets to talk about one of their predictions for 2023.
As a way of establishing credibility, the media outlets cited one of his 2022 predictions that he got right – the S&P will have its worst year since 2008. Financial news outlets had subject lines that read something to extent of “this analyst who forecasted market downturn in 2022, now says...”
What is the Best Way To Save for Your Grandchildren?
I recently had a client tell me that they had been thinking about saving some money for each of their grandchildren but were unsure about the best way to do that. I’ve seen families over the years put off saving because they weren’t sure exactly how to go about that.
Start by asking yourself what you want the money to accomplish. Is it something specific like college or a first home, or is it more general like setting them up for success early in life?
Here are a few different ideas to consider…
Three Timeless Lessons from Warren Buffett’s Annual Letter
Last month Warren Buffett published his annual letter, which as usual had timeless pieces of wisdom in it. Below are a few of my favorites.
#1 - Focus on dividends and earnings during market downturns. In 1994 they bought $1.4M of Coca-Cola. Last year that stock paid them dividends of over $700M…
Why “Full Retirement Age” Is Not a Magic Date
For years when you would open your Social Security estimate, there would be a big number in the top right corner – the amount per month you were estimated to get at “full retirement age” (FRA).
There was a tremendous focus on this specific age, which resulted in many people assuming that was the ideal date to claim benefits…