Category Archives: Money

World-Class Inequality

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One of the persistent issues of the 2016 U.S. Presidential campaign was the wide (and growing) divide between the “haves” and the “have-nots”—variously expressed as a rising sentiment against the “one-percenters,” or as laments against the “hollowing out of the middle class.”

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Roth Conversions and Mandatory Distributions

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You probably know that the IRS requires you to start taking mandatory distributions from your IRA when you turn 70 1/2, even if you don’t actually need the money.  But can you do a Roth conversion at that late date, and thereby defer distributions forever?

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Retirement Contribution Limits Unchanged

retirement

In case you missed it, the contribution limits to your 401(k) plan, IRA and Roth IRA—set by the government each year based on the inflation rate—will not go up in 2017.  Just like this year, you will be able to defer up to $18,000 of your paycheck to your 401(k), and individuals over age 50 will still be able to make a “catch-up” contribution of an additional $6,000.  (The same limits apply to 403(b) plans and the federal government’s new Thrift Savings Plan.)  Your IRA and Roth IRA contributions will continue to max out at $5,500, plus a $1,000 “catch-up” contribution for persons 50 or older.

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The Election’s Impact on Your Portfolio

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By now, most voters have made up their mind about who they want to serve as their next President.  But what can they look forward to, from an investment and tax standpoint, if their candidate wins or loses?  How will the election affect their portfolio and future net worth?

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Taxes Up (but not so much as you might think…)

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If you think taxes are higher than their historical rates, well, it depends on how far back in history you’re comparing them to.  Take a look at the accompanying chart, which shows tax revenue as a percent of total national income for four countries—France, Sweden, the United Kingdom and the U.S.—since 1868.  The chart ends in 2008, and is taken from research by tax policy analyst Thomas Piketty.

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Costs of Living

cost of living

What is a dollar worth?

If you answered that it’s worth a dollar, you must be living in Illinois.  A research report by U.S. Bureau of Economic Analysis found that the prices for a particular basket of goods and services—food, transportation, housing and education—are higher in some states than others.  Illinois came in at almost exactly the average; a $100 bill will buy $100.70 worth of the items.  People living in the District of Columbia, the nation’s most expensive area, would have to pay, on average, $118.10 for the same basket of items.

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