The Democrats’ Tax Plan Would Raise Capital Gains and Corporate Tax Rates
Monday saw the release of the Democrats’ full tax proposal, which details their plan to pay for expanding access to paid family leave, education, and healthcare, as well as efforts to combat climate change. The proposal is expected to provide more than $2 trillion in new revenue over the next ten years, mostly from high-income households and companies, and the House Ways and Means Committee is expected to vote on it this week.
Are You Among the 99% Following a Faulty Retirement Plan?
The following is an excerpt from Momma’s Secret Recipe for Retirement Success, by Dan Ahmad, Jim Files, and Jack Canfield. Get your copy here!
Many retirees do not have their assets allocated properly to give themselves the highest probability that they can receive a high level of consistent income, will never run out of money for as long as they live, and will never suffer a big stock market loss like 2008 again.
In a previous blog, we described in detail the differences between Stage One of Retirement Planning – Asset Accumulation, and Stage Two of Retirement Planning – Income Distribution and Asset Preservation.
When you meet with your financial advisor, even after you’ve retired, the conversation will often be focused on your portfolio. Your advisor may talk about:
The growth of your portfolio (even though it actually hasn’t probably grown much).
How the market is doing “so well” and you need to ride the wave.
How you are diversified by having your 20-30 mutual funds.
Adding bonds to the portfolio, if you are worried about risk.
How you are in it for the long-term and no matter what, you should “ride out all market volatility.”
How they have the best money managers.
How they will get you high rates of return.
Maybe they will throw in some technical terms like alpha, beta, Sharpe ratio, and standard deviation.
How it’s best to defer IRA distributions as long as possible, until age 70 1⁄2, to minimize income taxes.
The advisor might say you are now invested moderately, or conservatively, but they probably don’t define what this means in potential losses. So, your advisor says “moderate” or “conservative,” and you are thinking “low risk,” even though your current portfolio could lose -30%, -40%, or even -50% or more. In many situations, the risk is caused by the portfolio’s primary focus on growth.
How to Manage Common Challenges in this Phase of Life
At Peak Financial Freedom Group, we work with people every day who are preparing for retirement. We talk about when they’d like to retire, any goals they have, and what they envision their retirement lifestyle looking like. We review things like assets and liabilities, and we discuss cash flow. We use conservative risk-reduction strategies to help them protect their investments and provide the opportunity for growth. In short, we help our clients start working toward achieving the financial freedom they desire so they can enjoy a retirement free of money fears.
Alongside all this financial preparation, though, we have found that it’s also important to prepare your mindset for retirement. It represents a significant life change – and a massive psychological shift, too. That’s why you shouldn’t go into this phase of life unprepared from any standpoint. So, let’s discuss a few common mindset issues, and what near-retirees and recent retirees can do to overcome them.
