Tuesday, December 31, 2019

People expecting inheritances ask mean-spirited questions of financial planners, and some make it to Smart News

Marketwatch has some bizarre questions from readers about people’s rights with inherited property or property they expect to inherit.  Some of them sound like they come right out of “Knives Out” (the movie).

Here’s one about someone whose stepfather inherited his mom’s house (normally) but then remarried.  Can this person kick out the second wife after the stepfather dies?

It sounds like a mean question. Quentin Fottrell thinks so. 

The story was on Smart News today.

Maybe not such a happy new year. 

Tuesday, December 24, 2019

Seniors and even heirs getting into trouble with reverse mortgages

Nick Penzenstadler has been reporting in USA Today about many problems with reverse mortgages, such as an article now about clumsiness heirs experience with banks even when they want to pay them off, story here
Customers in lower income neighborhoods have been losing homes, especially since 2008, for minor problems (like not paying insurance premiums) after homes might have lost value. 

Monday, December 16, 2019

The "Bail-in" issue and bank deposit safety; "structuring violations"; grantor trust abuse

I still see occasional stories from mostly right-wing sites and papers that it’s dangerous for retirees to depend on banks, and that gold and silver or maybe even cryptocurrency is somehow safer (the way having a mountain ranch with plenty of guns is safer).

John Lawrence had written a story in 2015 for the San Diego Free Press,  explaining the process of going from “bail-out to bail-in” (post 2008), where a bank bails itself in by seizing deposits and letting the FDIC pay depositors up to $250000 – and warning that in an emergency the solvency of the FDIC could be in question. This was based on an IMF article in 2012 

The GSI Exchange, which trades precious metals, had made similar claims at the end of 2018 with less detail. 

Retirees will sometimes see spam-like emails warning them of these risks, and these could introduce malware.

Perhaps some investors could become concerned over instability arising from Trump’s recklessness, which could lead us into war – and the uncertainty about impeachment and the 2020 elections. 

Congress as a whole seems to remain reckless about debt ceiling and government shutdown issues.

The other big risk to some investors comes from asset forfeiture laws that allow seizure of money when money laundering us suspected, and when “structuring violations” (intentionally breaking large deposits down below $10000 per transaction to obscure the transfers) are suspected, as in this Forbes story.

Trustees of inheritances should be careful about misusing funds still in the name of the deceased trust (especially after merging into grantor trusts).  The deceased funds are not “yours” to do what you like with until properly distributed to “your” name. Typically they can be used to settle debts, pay for housing and provide supplemental health and dental care, but not for entertainment or unusual investment schemes.  Beneficiaries can sue trustees over these issues.

These concerns do play into the Left's conceptual challenges to the morality of "capitalism" on a personal level and accumulating wealth without working. 
NBC News has provided a story warning retirees of imposter scams, needs purporting to be from distant friends or relatives. 

Friday, December 06, 2019

Could inheritances be targeted for reparations taxation?

Should taxes on inheritances be entertained for the idea of paying reparations to some descendants of (black) slaves and, in some circumstances, indigenous peoples?

A paper in Qz in June 2017 by Chuck Collins at least makes a case, and mentions inheritances specifically toward the end of the article.  His suggested floor of exposure to additional tax (to non-black, non-indigenous) households is $5 million, still the general floor today.

His moral arguments are well articulated, and mention historical precedent examples of the Japanese internment during WWII, as well as Holocaust survivors. 

The Guardian has a June 2019 piece with opposing views by Ta-Nrhisi Coates and Coleman Hughes.
I am struck in my own life with the idea that inherited wealth is not as “valuable” as wealth that had been earned by one’s own labor, and typically there are strings attached or limitations in many trusts and probate outcomes.  I have been around SJ activism in the past that wanted to get rid of all inherited wealth.  Yet, the idea of “generational wealth” got mentioned at least once on Donald Trump’s “The Apprentice” series 15 years ago.

Monday, December 02, 2019

NYTimes opinion piece shows how difficult Alzheimer's can be for other family members, even when largely behavioral

Jeneen Interlandi exposes “The Unending Indignities of Alzheimer’s” on p. A26 of Monday’s New York Times, as “editorial observer”.  This essay has been reproduced on many blogs and websites in full.

She presents a narrative about her father who, at 78, is diagnosed mainly because of behavioral problems, which actually got him kicked out of a senior center and which now mean he has to have 24-hour supervision.  But because he can dress himself and do some functions, the family can’t get indirect Medicaid payments which, in New Jersey, is managed by third party companies and insurance agencies for nursing homes.  I worked (for Bradford) on Medicaid MMIS for New York in the 1970s and I don’t recall a mechanism like this.

There could be a danger that a senior whose behavior is just eccentric or who is overwhelmed with housekeeping could be considered to present a problem for others in a community. 

My own mother was officially diagnosed by the neurologist (who was an O.D.) in the last year of her life (passed away at 97 in 2010) and one scan showed some plaque, but I believe most of her problems, which came on in the last two years of life, were due to congestive heart failure and aortic stenosis.

Thursday, November 14, 2019

Moderate presidential candidates could demand more from well-off retirees and appease progressives

When Deval Patrick, former governor of Massachusetts, jumped into the presidential race today “at the last minute” and was asked about the perception that he is a pro-business moderate, he answered (on CNN at least) that he was not afraid to make radical policy proposals and ask a lot of individual citizens.

I think you can imagine scenarios of what could be asked of retirees who are “better off”.

One obvious thing could be to accept means testing on social security as of some date, maybe even relatively suddenly.

Another would be to encourage families not to leave (as much) money to relatives but more to causes and charities.

One thing I’ve noticed. When estates do go through probate, if the wills said so, then the beneficiaries tend to wind up with full distribution.

It is common to avoid probate and speed up distribution to set up trusts.  This works faster in some states (like Virginia) than others (like Ohio).  But it is common to distribute some percentage, like 25%, to adult children, and leave the rest in trust for future beneficiaries (like non-profits and charities or disabled family members).  Attorneys, left on their own, are likely to write them up this way.
A progressive president might not just stop with the super rich on wealth taxes; he or she could try to encourage more generosity from the moderately well off (from the sociopathic baby boomers) .  For example, he could try to set up sponsorship and adoption programs for stranded migrants and encourage them to step up.  What about our own homeless?

Thursday, November 07, 2019

What's the difference between SSDI and SSI? New group explains in a video

Citizens Disability explains the difference between SSDI (Social Security Disability Insurance) and SSI (Supplemental Security Income).
SSDI is an “earned” benefit, and SSI is not.  But SSDI is a kind of “insurance”, and is not like an “annuity”.
SSI is more like a welfare benefit. It limits how much you or a family can have in disposable assets.
There are more details on one of my Wordpress blogs. 

Sunday, November 03, 2019

Public option annuity, and Social Security "hybrid" proposals; also troubles with survivors' benefits?

Mark Hulbert of Marketwatch presents a Social Security reform that would institute a “hybrid” plan that makes Social Security more like an insurance company annuity, as a supplemental pension with a “public option”. 

This idea is also discussed in July 2019 in The Atlantic by Ganesh Sitaraman (Vanderbilt) and Anne L. Alsott (Yale).    
Note the video below:  people have trouble getting Social Security when they have a survivor's spousal pension? 

Wednesday, October 23, 2019

Doctor says a lot of us look at the process of dying as shameful

Big Think has a video “We’re Looking at Death All Wrong.  Here’s Why”.

He talks about personal shame in being sick or incapacitated, and that people should be open to the idea that disabled people can enjoy intimacy.

The speaker is Dr BJ Miller, author of “A Beginner's Guide to the End: Practical Advice for Living Life and Facing Death”. 

Tuesday, October 22, 2019

Should an adult son who takes care of mom pay rent too?

Carolyn Hax, in the Washington Post today, Style Section, page C8, has an interesting letter about filial piety of adult children, here
A daughter complains about her brother’s living with elderly mom and taking care of her while not paying rent.
I didn’t pay it (2003-2010).  A bit of a moral dilemma?

Monday, October 21, 2019

What is "Medicare Part C"?

Amazingly enough, I had never heard the term “Medicare Part C” used by HHS, to refer to Medicare Advantage Plans, until this morning in an ad on CNN.
Here is HHS’s page on the term

I could give a personal reaction that ten-fifteen years ago, while mother was still alive, yes, I would get calls asking if I wanted to pimp or sell Medicare Advantage somehow.
I haven’t thought I needed it (or "earned it").

The dental coverage sounds interesting.  I got my implants in 2013 at age 69-70.  Would some of this have been covered?  (But I had a major problem at the end of 2004, when I was just 61, before Medicare.)

Some of the other benefits, like gym memberships or training or nutrition counseling, do I have time for that?

The video above comes from Blue Cross and Blue Shield of Texas, on US 175 in Richardson, whom I worked for indirectly as CABCO (Combined Medicare A and B Consortium) in Dallas from 1979-1981.  The project flopped because of political infighting among the plans.  (They didn’t listen to me – and what I proposed is what everybody does now.)  I once had a regular job interview in Richardson in 1987. 
And Dallas is reeling from a tornado this morning – which was actually rare when I lived there (1979-1988).

Friday, October 18, 2019

Study suggests too much brain activity can shorten life span

A new paper in Nature suggests that people who use their brains less intensely in later life may live longer.

Time magazine has picked up in the story in an article by Jamie DuCharme. 

The longevity parameter seems to be a separation between living into the high 70s or 80s, and getting into the upper 90s.

On the other hand, brain activity might both discourage or abet dementia, according to the genetics of the individual.
Generally, people with strong social and local ties live longer.  But there may be exceptions with some kinds of individuals (like with Aspergers).

Wednesday, October 16, 2019

Elder abuse by family members can be detected by banks and reported

Susan Tompor has a revealing article today in the Detroit Free Press about the elderly being scammed by their own relatives. 
Banks and financial institutions are paying more attention to this possibility than they used to. Particularly common is misuse of a power of attorney.

Banks file reports of suspicious activity to regulators, and the average fraud is around $48000 to the report.  Family members may not realize that banks have systems to detect unusual activity.

Tuesday, October 08, 2019

Economic Invincibility channel reports on CEO's living off defaulted pensions

Martin Goldberg (“Economic Invincibility”), has a shocking piece “Why CEOs Live on Welfare”.

Martin takes apart the supposed private corporation pension failures and deferrals to the PBGC as a hidden ruse for shareholders to increase value or for CEO’s to practically embezzle the money.
Martin, who has said he would phase out his politically oriented YouTube posts, still continues to play the role of a different kind if Tim Pool, a conservative who is willing to go after misbehavior and excesses on the right.  Most of his videos, though, are aimed to help consumers help themselves.

Monday, October 07, 2019

Should retirees consider the Peace Corps?

Should older Americans considering radical volunteering, like in the Peace Corps?

The Peace Corps has an article from Jan. 6, 2017 (that was before Trump’s inauguration) on volunteering in Moldova, Europe’s poorest country. 

I looked into this back in 2002 after my “end of career” layoff, post 9/11, in December 2001. 

The article makes it appear that the language training will be the most difficult for older people.  It is much easier to learn foreign languages, especially those not related easily to English (that is, other Romance or Germanic languages) when a child.  Look at “Paul’s” Language Focus series on YouTube.
In my case, it would mean shut down of all my online channels, and I would not have a practical chance of resuming them when I returned.  It would seem like a life-concluding payback.

Monday, September 30, 2019

Specific form of dementia called "LATE" is documented in very elderly

Sci-show offers a perspective on a little recognized form of dementia called LATE, for late onset.

It is generally limited to persons 80 years old or greater and has to do with a very specific plaque formation process in several brain areas as a subset of the better known processes.

My own mother had this problem starting at about age 93 (she died at 97 in 2010).  However it appears that it was exacerbated by aortic stenosis and congestive heart failure.  She also had undergone triple coronary bypass surgery at age 85 in 1999.  There are various reports that CABG sometimes leads to some cognitive issues. 

Sunday, September 22, 2019

What happens when an inherited account is itself an IRA? Be careful with this

Susan B. Garland has a warning article in the Sunday New York Times, “Losing an Inheritance Is Easy Because Saying No Is Hard”, link

But the article doesn’t go into the fact that if it came from a trust it is likely to behave differently than from probate.  Trusts often allow partial distribution to the main beneficiary in less than a year, but typically 75% of so are supposed to be left for future needs.

When the original deceased’s name stays on the (irrevocable) trust, the beneficiaries are often the true “owners” of real estate which one beneficiary has a right to live in.  Sometimes if it is sold, the original beneficiary must still live in owned, not rented property.

But as the article notes, inherited property should be treated carefully, and sometimes doesn’t allow the freedom of something you had “earned”.

Strings used to be attached, and that has been less so recently, but may become more common again in our woke culture. 

Sometimes a beneficiary is left with a child to raise (or children).

In the past, some beneficiaries had to be married by a certain time (the 1999 movie “The Bachelor”) but that isn’t common now.
The article warns to be careful to make sure than an inherited account is not itself an IRA.  If it is, it should be distributed according to schedule similar to your own, otherwise you own tax on the entire amount if it is (inadvertently) taken out of IRA status.

Saturday, September 14, 2019

Candida auris now a serious threat in many nursing homes

This has been reported before, but Matt Ritchel and Andrew Jacobs are reporting in detail on repeated incidents of a fungal infection, candida auris, outbreak in nursing homes, in booklet-length coverage this week in the New York Times. 
The infection is said to be highly contagious and drug-resistant, but doesn’t seem to affect healthy people with normal immune systems, it seems opportunistic.  The same seems true of meth-resistant staph.  It is more common in New York, New Jersey, and Illinois.  Overuse of anti-fungal and antibiotics is blamed. Global warming might lead to the fungus’s spread.

It’s becoming a bigger problem as severely debilitated people live longer than in the past.
The possible changes in sanitation of workers in health care could get, well, interesting. There are also cleaning robots that zap, well, rooms now with ultraviolet.

My own mother was cared for at home by agency caregivers, eventually round the clock, for the last 18 months of her life (she spent four days in hospice before passing away in December 2010 at 97).  I was fortunate that she had ample resources to pay the $90000 or so it cost for this period (just because my father had been a conservative investor for four decades and understood compound interest).

But I was contemplating nursing home care would be necessary starting in 2011.

Tuesday, September 10, 2019

AARP reports substandard hospice care for some Medicare patients

Christina Ianzito has a report in the AARP Bulletin in July 2019, “Many hospices offer Medicare recipients substandard care”, link.  

The problems seem to occur mainly with in-patient.

A patient can normally be admitted to hospice care with a life expectancy of six months or less.
My own mother was admitted to in-home hospice care in Arlington VA in November 2009 and lived thirteen months.  She spent only the last four days of her life in the Capital Hospice center in December 2010.

Tuesday, September 03, 2019

Updated information on Medicare coverage of kidney disease

I got an email requesting me to cover the latest information on medical care for End Stage Renal Disease (ESRD). I hope it’s not ironic, as I have my own mandatory Medicare physical (including EKG and 12-hour fasting blood work) Thursday.
The site is MedicareFaq, and here is the fact sheet. 
President Trump recently signed an executive order changing the priorities in kidney treatment, trying to encourage more transplantation opportunities and home care, as opposed to dialysis centers.  There have also been recent similar changes in Canada, as covered in a film called “Journey Home” on Amazon which I reviewed on a Wordpress blog recently. 
The FAQ sheet refers to rules regarding how soon you start a transplant after going on Medicare.  I’m not sure what the point of the rules is.

Organ donation is talked about a lot more today (as in social media) than when I was coming of age, and it is possible to give one kidney and live on the other one.

There is another article (on MedicareFAQ) on hemodialysis which shows a cannula and fistula on the forearm.

It is now possible sometimes for HIV-negative gay men (with a sufficient period of abstinence) to do a living kidney donation as well as blood, although this is infrequent.

Thursday, August 29, 2019

Does assisted living really preserve independence?

Geeta Anand offers an op-ed in the New York Times, “How not to grow old in America” and the belief that physical self-sufficiency until you die is a myth. 

The article attacks the assisted living industry, which he says offers little hands-on assistance.

However, I know that an aunt in Ohio did get bathed every morning.  She passed away there (under hospice), she never went into a nursing home.
Assisted living facilities do put Alzheimer’s patients in separate wings that are supposed to be locked.

Sunday, August 25, 2019

A tale about filial piety from Utah

Joshua Fluke has a video where he talks about his own exposure to filial responsibility.  This apparently happened in Utah.
His dad was laid off from a job after 28 years, and set up his own business in the same area.  Then the employer sued his dad into bankruptcy and eviction from his apartment, and so he took his dad in.
Then the employer fired him because they found someone cheaper, a better “deal”.
Then he lost both of his own jobs.  And more stuff happened.
The title is “Why I won’t work a developer job anymore.”

He explains how he has to live off of YouTube ads, and is making it that way. 

Thursday, August 22, 2019

If you have a trust, and want to invest in a small startup, do you need to be an "accredited investor"?

Just a note about investing in a new LLC. 

I put in $100 through Wefunder in a startup Internet company I am interested in, and got an email asking if I am an accredited investor.

The qualification was a minimum net worth in assets not counting real estate, and a minimum income (AGI).  In 2015, the minimum standards were set to be gradually lessened, as the video explains.

This idea seems to matter if you have money in a trust. For qualification you count only what is really “yours” right now.  Any money you invest must have your name only, not the name of the person inherited from, as it is not yet distributed and legally belongs to the beneficiaries.  It can only be invested if approved by a committee of beneficiaries.
Later on, we'll compare this to crowdfunding. 

Sunday, August 18, 2019

Startup helps retirees compare financial planners in their areas

There is a new startup founded by a recent Princeton University grad, “Smartasset”, to help retirees compare financial advisers in their area.

Here is their own story
A few times, especially around 2005, I was approached by life insurance companies to train to become financial advisers, having spent 12 years with ING-Reliastar. I heard the pitch about playing golf when you wanted to. 

Friday, August 16, 2019

Caregiver shortage severe in some states as immigration tightens, life spans increase

Several papers, including the Washington Post, recently carried a report on a developing critical shortage of eldercare workers, as in this story by Jeff Stein. 

The report mentions a Fitch rating for states where 20% or more of the population is over 65. 

The report states that adult children of elder parents with money and the ability to pay for care (as my mother did, especially 2009-2010 until her passing in December 2010) wind up doing it full time hands on as workers are not available.

This is especially difficult is medicine is more able to prolong life under severe disability (especially Alzheimer’s, was well as heart) than it was in previous decades. There are guidelines where hospice care starts and treatment is palliative.

It’s pretty obvious that legal immigration restrictions will reduce the supply of home health workers.
In my case, hiring agencies did very that caregivers where here legally and eligible to work.
Last night, Donald Trump told some seniors that only he could protect their social security and retirement savings, saying their 401(k)'s would disappear if he didn't get re-elected.  He also fat-shamed one person. 
Wikipedia attribution for picture of Mt. Katahdin, Maine. PD by Jan Kronsell 

Monday, August 12, 2019

What happens to an estate when no executor has accepted the job?

An eldercare and trust attorney, in a recent newsletter, notes that anyone may serve as an executor of an estate after sixty days from the death of the subject.  This situation can occur if no one has agreed to serve as executor before the death of the person.  Executors can typically collect about 6% if the value as compensation (on top of what is left to them).  Typically a counsel takes up the job and charges for it.  It’s about like real estate.

It is also said to be advisable to invite beneficiaries (when they are real persons) to the home of the deceased, if possible, to select personal items, like cookware or garments, in a fair manner.
I don’t have a named executor yet who has accepted (this has been discussed on my Wordpress channels).  But this does not seem to be critical. 

Saturday, August 03, 2019

Can doctors force seniors to stop driving? Can seniors rent cars everywhere? The moral debate over the risks for others that come with (your) "privileges"

You’re over 65 and on Medicare. (I just passed 76.)  Your doctor insists on another physical every 6-9 months to renew your blood pressure medication. Could your doctor, based on a finding, submit a report to the state causing you to lose the right to drive?

Likewise could a car rental company, when you land at an airport, refuse to rent based on age?
Nine states have laws that require physicians to report conditions that could cause driving safety issues.  In four of these, the laws encompass conditions besides the most obvious, like strokes and seizures. Eye problems would also matter, obviously.

Triblive has a report of a typical case from Pennsylvania, dating back to 2012 (link) 

There are medical conditions that might indirectly create a risk.  Some people with heart arrythmias might be more susceptible to sudden stroke, like when driving. In the long run, this creates a moral conundrum:  should seniors who are functioning well be goaded into surgeries (pacemakers or even bypass or stents) on the theory that if they continue to drive, a sudden event could cause risk for others?

In a moral sense, this is a bit like the reach of the gun control debate and the reach of the Second Amendment, because collectively gun ownership increases the risk that any random person, even in a school in an affluent area, could become a shooting victim – David Hogg’s crusade.  There is not constitutional right to drive, but there is a practical necessity to retain social independence.  I can see a parallel in the moral thinking.

I found a similar article for Canada, where the fact of single payor for everyone may influence the moral debate. 

Some countries in Europe (mostly smaller ones) impose age limits on car rental, and apparently Mexico imposes one of 75.  (Renting one there is not too good an idea anyway.) Here is Autoslash’s reference
My own mother last drove by herself in July 2009 to the Safeway and back. I allowed it, even though she had had a minor stroke and now had intermittent caregivers.  I never allowed it again. She passed away in December 2010.

Tuesday, July 23, 2019

Trump, Pelosi apparently agree on debt ceiling

Well, good news.  Trump and Pelosi cooperated and made an agreement on the debt ceiling issue, to suspend it until July 31, 2021 (as if the coincidence with a Major League Baseball trading deadline matters).  NPR reports. 
Trump actually announced the deal on Twitter, and the upbeat tone is a bit surprising. Hope there are no untied strings attached to trip and fall on. 

Update: July 24

Robert Costa and Mike DeBonis of the Washington Post make an anology to the film "Thelma and Louise" and note that the Republicans, under Trump, are less ideological about the debt ceiling than they were a few years ago (with Boehner and the grand bargain of 2011). 

Monday, July 15, 2019

Could the "woke" left manipulate a coming debt ceiling deadline (before Congress returns in September) to demand means testing of the wealthy now?

Mnuchin warned that the US will run up against the debt ceiling before Sept. 9, 2019, when Congress returns from vacation.

Bloomberg warns that the “woke progressives” may try to hold the debt ceiling hostage to get their way, whereas in the past we worried that Trump could hurt people and send them to the shame of beginning on GoFundMe to get his way.

While most legal arguments seem to say that (despite Flemming v Nestor) the Social Security Trust fund is likely to remain protected and safe, there is a bit of a concern about people with inheritances. 

The Woke Left could try to raid them with rather sudden implementation of means testing as a stunt.  
  When you inherit something you didn’t earn it, so it can be taken away from you and you make not get it back. So much for the rule of Law with the radical Left.

Update: July 16

Catherine Rampell has an article "Abolish the debt ceiling now", no strings attached, today, in the Washington Post opinion pages, here

Thursday, July 04, 2019

Anderson Cooper says he doesn't believe in inheritance -- could he use his to run for president?

Anderson Cooper, the meticulous and openly gay journalist who has a major evening show AC360 on CNN, and whose political views tend to be centrist and moderate (relative to the Democratic Party) has said that he doesn’t believe in inheritance, after learning he had inherited most of his late mom’s $200 million estate. 

Anderson can say he paid his dues as a journalist as a younger man by reporting from Southeast Asia.  Sebastian Junger can make similar claims with his own life.

In fact, Anderson’s knowledge of policy is so extensive that he could have been a logical candidate for president (joining Buttigieg?)   Could the fortune make him think about this? Should a journalist run for president? What if Sebastian were to run?

Market Watch, this morning, notes that most kids need their family inheritances to get through life, an unsustainable situation. 
Market Watch has another article showing how wealthier parents can help their kids earn inheritances.   Gloria Vanderbilt did it right with Anderson.
If you look at kids who do well (John Fish, Jack and Luke Andraka, Taylor Wilson-scientist) they all had parents who inspired them to be productive and think through their own goals, apart from tribes or the opinions of others – a bit of Ayn Rand individualism.  Fish has a video explaining that his father (in Canada) is a physics teacher, so that certainly gives him an edge.
I can remember, however, that some on the extreme Left want to expropriate and do away with inherited wealth.  I saw this with the People’s Party of New Jersey back in 1972.  It happened to Andy Ngo’s parents in Vietnam in the 1970s (as it went all communist in 1975). 

Saturday, June 08, 2019

Social Security Medicare premium processing error may leave seniors stranded; a financial planner explains Medicare premium means testing and how Roth IRA's can help

Retiree customers of some Medicare advantage programs may find out that they suddenly owe premiums because Medicare had not been properly deducting premiums from their benefit checks and sending them to insurance companies, typical story.

About 250,000 people are affected.  Some seniors might not have noticed and not have the money to pay the premiums.

The video above from Heritage Wealth Planning and Jack Scandlen warns about how Medicare premiums are means tested, which I remember hearing and had forgotten about.

He warns that if you are over 70-1/2 and don’t take out the required RMD (required minimum distribution) in time (your bank should to this for you automatically) with tax withholding, you can pay a 50% penalty.  The RMD is required except from any company you still work for.

Your RMD divisor goes down as you get older based on actuarial life expectancy. At 10:00 the video explains how the premium goes up with modified adjusted gross income. This is fairly complicated and may require a CPA to manage.  The speaker recommends Roth IRA’s

Saturday, June 01, 2019

Did you know you can work from home as a "virtual juror"?

To start out Pride month, well, a post for retirees:

Interesting list of telecommuting, work-from-home jobs for retirees. 

The Virtual Juror is interesting.  I didn’t know that lawyers hire them.

I do not want to be a fundraiser for a non-profit, because I’m staying away from playing favorites right now.

Thursday, May 23, 2019

Reason Magazine seems to have supported Social Security means testing for existing retirees

I saw this Reason article linked on Twitter, from Nic Gillespie and Veronique de Rugy, “Generational Warfare”, even with a cartoon picture of a gun (somewhat objectionable by today’s standards).

The writers maintain that wealthier seniors have more political clout and have convinced politicians to treat Social Security FICA contributions as like “annuity premiums” even though legally they are not.  They also see some seniors as almost sociopathic in stiffing the young with dead-ends and college debt, which is more like an argument from the Left. 

Flemming v. Nestor” had maintained that the FICA tax supports existing retirees, it is not your own savings.
So the authors seem to be calling for means testing even of existing retirements. 

I didn’t notice at first that this article dates back to 2012, sometime after the angry debt ceiling crisis in the summer of 2011 with all its partisan bickering.

I think that the article is an indirect argument for the privatization of social security benefits, even if that would be impossible without stiffing some retirees (Harry Browne had pointed that out in the 1990s).  And the political argument against privatization is, you guessed it, still about the Rich and the Poor (like the Tenderloin in San Francisco, shown above). 

Saturday, May 18, 2019

Be careful with working with inherited portfolios with old securities with no cost basis

I wanted to make note of another situation that may happen if you inherit part of an estate, and then decide to sell a security for cash.

I did that in 2017, and suddenly got a huge and incorrect tax settlement proposal yesterday, with about three weeks to answer.  

The problem is that the bond had been purchased before the person’s death and before it came to me. 
UBS showed “information not available” on the cost basis, and I didn’t see it in early 2018 when doing the taxes.

Bond funds earn interest, which is then reinvested.  This portion was OK and had been properly reported.  The newer reinvested portions did have a cost basis. But the portion that had been there before 2011 did not.

Most of this bill will go away when I supply a cost basis, which I think I can get from the transaction report when the fund came to me in 2011.  It’s supposed to be taken from a day about six months after the death of the person.

Here are a couple of references:  Motley Fool, Investopedia, Zacks.

You need to be careful when you inherit a fund to make sure it is unqualified (not a 401K). Otherwise you would have to pay all the tax on it (although you would need to redistribute it at 5% a year once you reach 70-1/2.  
There was also a problem in that the HRBlock system seems to have included only the basis amounts in building its totals, I don’t know why.

Tuesday, May 14, 2019

Doris Day's "no funeral" may be starting as a trend

Liz McNeil and Alexia Fernandez report for People that Doris Day had declared that she would not have a funeral, a marker, or memorial. 

She doesn’t like to  commemorate death.

I rather feel that way.  My own mother had an internment one week after her death (cremation) and a memorial service a month later.

I have said that this is the case were my death to be violent or the result of crime, war or terrorism.  I don’t think victimhood should be pimped. Sacrifice is just that. 

This view is becoming more common.  Other people have said this.

In the soap opera "Days of our Lives" EJ didn't get a funeral when he was murdered. 

Tuesday, May 07, 2019

On tariffs, Trump seems to be taking chances with retiree portfolios and getting away with it

Trump got away with it yesterday.   He announced probable large increases in tariffs to happen this Friday because he suddenly decided China was acting in bad faith on the trade deal.  Maybe something happens tomorrow.  The Dow-30 dropped over 471 points at opening and recovered to just a 66 point drop (CNN).  I still recall a pep talk at my job (ING-Reliastar) in Aug. 2001 (before 9/11) where a professional speaker predicted a 35000 Dow within one year of that time. 

Trump also may have nudged interest rates down?

Retirees are watching their portfolios, wondering when is a good time to convert more securities back to cash.  Be careful about bonds that mature and are tied to the SP.

In the meantime, the left wing rhetoric is blaming baby boomer seniors more. Young adults, except for the top 20% or so who are the most talented, can’t seem to hold their own when they leave home.  You can tell from what young adults say about themselves on YouTube, Facebook and Instagram why some are doing so much better than the pack.

Retirees with assets have to wonder about backlashes and means testing, as it will surely come up in the new House and after 2020.

One problem is that so many “second careers” turned out to be about “selling stuff” and joining pyramids.
Update: later today

I spoke too early.  The Dow closed down 473 today.  It seems the fear of China came back. 

Friday, April 19, 2019

A politicized Federal Reserve could wipe out retirees, and Trump acts tempted

Fareed Zakaria has a credible op-ed in the Washington Post today regarding the tendency for right-wing (or maybe left-wing too, like Chavez) populist politicians to try to bring their central banks under partisan control. 

He discusses particularly Trump, and his desire to appoint “loyalists” to the Federal Reserve, as well as Erdogan in Turkey.  In India, the national bank as “raided” to buy votes.

The article notes that this practice by politicians can be very dangerous to savings of retirees.

Monday, April 15, 2019

Tax day, and the "meta-moral" problem with the way state tax deductions work now

It’s a bit late on tax day, but the issue of how Trump’s tax law affects “blue states” by reducing the maximum state tax itemized deduction to $10000.  It was always true that you had to choose between income or sales taxes.  Here is a typical write-up.

Because there is no personal exemption but a larger standard deduction, many people loose “opportunity” from the change with respect to the state tax issue, and this will affect people in high state tax states, like New York and California.

I am in Virginia. HRBlock computed my federal tax assuming the standard deduction (without exemption) which now was more than the itemized deductions I had been claiming.

But it did not consider the state income tax, because the state hadn’t been computed yet.

So I may have been overcharged after all.

On the other hand, I underpaid the estimated tax this year because I did not expect an unusual gain on one bond fund in mom’s estate because of an unusual way it was handled.

I don’t know whether it will be worth my time to redo this.

I’ll talk to a financial institution to prevent this problem again.
It is very easy to pay overdue taxes electronically by HRBlock from your checking account.

Virginia now says that people with AGI’s over a certain amount must pay estimated taxes electronically.  I had never noticed that before.  I’ve already done 1Q 2019 by mail.

Tuesday, April 02, 2019

Sudden bond maturities tied to SP-500 can lead to surprising tax bills

I do my taxes on HRBlock, and I typically copy PDF’s of all my 1099’s from financial institutions into a typical directory in Windows.

This year, on one of the banks (Suntrust), I almost missed a 1099-B on the last page. It showed a bond fund maturing and showing an amazing $21000 long term gain since 2014 based on a $75000 basis.

The bond was tied to the SP500, which was near one of its max points the day it matured.
This possibility exists, although it’s unusual.  But typically investment accounts roll over the instruments and purchase something else. That could go down. It’s a good idea for a retiree to be told about this and put it in cash.

This year, the standard deduction swallows the personal exemption and in my case, the same deductions I took last year.  I don't like to stretch things by trying to add deductions.  This year real estate taxes are much lower after moving to a condo. 

Wednesday, March 27, 2019

Social Security 2100 sounds like a serious plan to make the program sustainable

Sean Williams has a detailed explanation of the Social Security 2100 Act on the Motley Fool, URL here. 

There are complicated reorganizations proposed to extend Social Security’s self-support, but the biggest boosts are toward the end of the article, and they are obvious:  an increase in FICA tax rate, and a resumption of wage base when it goes over $400000.  There are also some changes to taxation of Social Security benefits for those with other income (that 85% thing now).

People who earned less during their working lives will eventually get better benefits compared to high earners. There will be some fixes for problems with surviving spouses (who can include same-sex spouses).  There will be some reforms for the way the disability insurance is funded.
The HR number is 860 (link ). 

Don Beyer (D-VA, 8th district) 

Sunday, March 10, 2019

People with grantor trusts do need to pay attentiont to their "manifest observable behavior"

One other point of caution has come up recently for people who inherit money through trusts.

Of course, the portion that remains undistributed in trust is supposed to be held for the future use by beneficiaries, especially after the main trustee’s own death.

Trusts are often set up as grantor trusts for simplification of filing taxes with the IRS.  But often in practice trustees have the ability to move money around at will, which can get them into trouble. Some banks allow a limited number of moves a month (typically six).

It would seem logical that there could be a problem if the trustee runs a business predicated on asking for money from patrons (rather than having them pay for things – that is, normal subscriptions in the case of Internet channels).  This might even extend to running fundraisers for non-profits from one’s own social media account, which Facebook often prods users to do. It might be necessary to set up a blind trust first.

Because there have been a few cases where Internet personalities have suddenly had bank accounts closed, we wonder if this could be a factor – beyond just SJW activism against “conservatives”.