Three years ago, I wrote about my lifelong passion (some would say obsession) for spare change. This dates back to counting the spare change and “egg money” in my grandmother’s chipped gravy boat in the 70’s. Today, this is the spare change stash in my office: But here in the 21st century, especially during a pandemic, I don’t have a lot of cash transactions, and therefore not a lot of physical spare change. Enter the micro investing app Acorns* which invests your digital spare change. Three years ago, I signed up for Acorns and linked my checking account. The checking account is my “funding source”. Then I linked my credit card. You can link more than one …
Inflation-linked Savings Bonds – High yield, Low risk!
Like many of my clients, you may have a dusty pile of paper savings bonds lying around somewhere. Maybe they belong to you or your children. Odds are they were gifts from an older relative. Most likely they are EE bonds, which have their charms.** However, the savings bond I want to talk about today is the I bond. Jason Zweig of the WSJ recently called I bonds “the best-kept secret in America”. I bonds were introduced in 1998. The “I” stands for inflation, which has been heating up recently. The variable inflation rate you earn on I bonds is adjusted every 6 months in May and November based on inflation as measured by the Consumer Price …
Have you looked at your Social Security statement recently?
The Social Security Administration recently started rolling out newly designed statements. The new statements graphically illustrate the increase in income from delaying benefits. Here’s the retirement benefit information from an old statement: From a different client, the retirement benefit illustration from a new statement: The new design helps workers get a better understanding of the income increase they can gain from delaying their benefits. It can make sense to delay claiming your benefit even if you have retired. It all depends on the numbers, but if you have other assets to draw on, holding out for a larger Social Security payment could be more …
Do you need permission to spend?
One of the best parts of my job is giving clients permission to spend. A typical situation is a retired client (or couple) who has spent a lifetime accumulating wealth. First, they followed the fundamental equation for reaching financial independence: They paid attention to the outgoing dollars. Maybe they looked for sales. Maybe they always drove used cars. Maybe they took modest vacations. Maybe they did all of these things and more. They didn’t really feel deprived and they weren’t concerned with keeping up with the Joneses. For decades they saved and invested -- often in employer retirement plans. At some point it was time to retire – sometimes …
Good News For Most Families With Children, Your Tax Bill Is Going Down!
The American Rescue Plan, signed into law March 2021 includes a temporary one year enhancement to the Child Tax Credit for 2021. In 2020 the Child Tax Credit was $2000 per eligible child under age 17. Look on line 19 of your 2020 Form 1040 to see if you received this credit: This client has two children, ages 12 and 9: For 2021 the Child Tax Credit is increased to: $3,000 for children ages 6 to 17previously 17 year olds were not eligible, this year they are$3,600 for children age 5 and underThese amounts are based on the child’s age on 12/31/21 Also new for 2021 -- 50% of the credit will be paid in advance in 6 monthly installments from July 2021-December …
