In 1994, financial planner, William Bengen developed the 4% rule. It quickly became the guiding “formula” used by both professional advisors and do-it-yourselfers for about two decades. The 4% rule (or theory) says that at retirement, with a portfolio of 60% stocks and 40% bonds, one could withdraw 4% of the initial savings and increase it by inflation every year and the retiree would have a 90% or better chance of his income continuing for 30 years and that the savings would not … Continue reading

Many of you know that I personally invest a very substantial amount of money every year into my five life insurance policies that were built to accumulate cash and provide me with tax-free retirement income. This is important to me as I believe that is not “if” but “when and how much” income taxes are going to have to rise in the future to pay our nation’s $19 TRILLION debt plus unfunded Social Security, Medicare and Medicaid. Although I do … Continue reading

The chart I am highlighting this week shows a comparison between the calendar year’s gain (or loss) and the largest draw down (market loss) that occurred within the calendar year going back to 1995. You might remember that draw down is the percentage amount of drop an investment has from it’s peak down to it’s trough. In other words, the intra-year maximum loss. The LIGHT BLUE bars show the calendar year return. THE DARK BLUE bars show the intra-year declines (draw down percentage) of the S&P 500. In each … Continue reading

For people aged 70 and a 1/2 or older and who are charitably minded, we can explore a Qualified Charitable Distribution, or QCD for short. Those who like to give to charities including their place of WORSHIP can make a direct transfer from their IRA to the charity, in ANY amount up to $100,000 a year. By doing this they can avoid adding the distribution to their Adjusted Gross Income which can reduce income taxes. You can even make a QCD … Continue reading

You are likely to agree that 401(k)s and IRA’s have many similarities. They are both retirement plans. Both plans can help you lower your tax bill today, provide tax-deferred growth and help provide a taxable income source in retirement. Although long-time followers of my financial philosophy will know that tax-deferred is just a nicer way to say “tax-postponed”! You NEVER save any taxes with either one – you only postpone both the calculation of taxes (Will tax rates be higher? … Continue reading