I've written before about indexed annuities, one of the most expensive, abusive, unnecessary financial products known to man, but I've recently had a couple occasions to learn more about variable annuities, the confusingly-similarly-named product offered at lower cost by more reputable firms, like Vanguard and Fidelity. Variable annuities are expensive There are two expenses … [Read more...] about Wrapping my head around variable annuities
taxes
Basics of IRA recharacterizations
Like aircraft flying at very low altitudes, the US tax code does strange things when very low incomes are involved. Most people know about, or have at least heard of, the earned income credit, which phases in quickly as "earned income" (which includes wage and self-employment income) rises, then phases out somewhat more slowly. I think that's bad program design, since it … [Read more...] about Basics of IRA recharacterizations
Follow-up: was I too harsh on “charitable clumping?”
On Tuesday I wrote that so-called "charitably clumping" was a fairly transparent marketing campaign by the philanthropy and money management industries to generate more contributions and assets under management. Commenters were not amused! After reading through the comments I'm happy to concede I overstated my case, while I think some readers might have passed over elements … [Read more...] about Follow-up: was I too harsh on “charitable clumping?”
“Charitable clumping” is a clever marketing campaign, not a tax planning strategy
The 2017 Republican smash-and-grab tax reform bill made two related changes to individual tax deductions: The standard deduction was raised to 12,000 for individuals and 24,000 for joint filers; and the state-and-local-tax (SALT) itemized deduction was limited to $10,000. Meanwhile, the charitable contribution deduction was unchanged, and the mortgage interest … [Read more...] about “Charitable clumping” is a clever marketing campaign, not a tax planning strategy
Congress wants you to sell stocks to pay your taxes
The tax bill Republicans are planning to pass in the next day or two is not a good bill, and hopefully it will not pass. The fact that people have correctly identified it as a bad bill, however, has given rise to quite a bit of sloppy thinking about why, exactly the bill is so bad. The effect of replacing the personal exemption with a larger child tax credit is genuinely … [Read more...] about Congress wants you to sell stocks to pay your taxes