Given the increasing possibility of higher marginal tax rates, how should individuals evaluate their future participation in qualified retirement plans? Is it better to make pre-tax 401(k) deposits today, and pay taxes on the distributions when the money is used for retirement? Or does it make sense to use a Roth 401(k) and incur the tax cost now – even with higher tax rates – knowing future distributions will be tax-free? In any tax environment, answering the question of “taxing the seed or the harvest?” is a critical decision point. However, a purely financial answer to this question hinges on unknowable future conditions: What will tax rates be at retirement?
For most Americans, their biggest financial project, both in duration and dollars, is funding their retirement. But prior to retirement, many Americans will also encounter other smaller, shorter term financial projects that also need funding. And the choices they make to address these smaller projects can significantly impact the outcome of their biggest one.
Whatever you’re doing right now to earn a living, there’s a good chance much of your work could eventually be done by a machine. In fact, some futurists predict machines will do all our work. On first exposure, this may seem ridiculous. But both history and current developments make a reasonable, perhaps compelling, argument that work will be a much smaller part of our future. If this is true, it portends some dramatic changes for personal finance as well.
Many American households are vexed by their financial condition. They feel like they don’t have enough money, carry more debt than they should, are underfunded for retirement or their kids’ college education, and aren’t confident about their futures. The financial experts – i.e., economists, researchers, and policymakers - will point to behavior flaws, a culture of consumption, financial illiteracy, misguided government policies, globalization, technology, systemic inequalities, the “one-percenters,” and a hundred other external factors as causes of this distress. But offering hundreds of reasons why things are the way they are doesn’t add up to one solution. If you want to improve your financial standing right now, you might be ready for a conversation with someone who can tell it to you straight, and give you a no-nonsense blueprint for financial progress. It’s time to talk with a financial “Dutch Uncle.”
The essential function in all successful personal finance programs is saving. But while it is essential, saving alone may not be enough. The following article takes several shots at explaining how borrowing – which many people perceive as the opposite of saving – can “turbocharge” your finances.
The video, “Better Together,” is from Guardian Life Insurance Company, a prominent disability insurance provider in the medical professional marketplace. Guardian posted this video on YouTube in November 2015, and more than a year later, there have been less than 600 views. Frankly, that’s a shame. Dr. Vincent Tullos is a doctor from Baton Rouge, Louisiana, who in August 2013 experienced a stroke. The impact of this life-changing health incident is reflected in Dr. Tullos’ speech which, combined with his Southern drawl, makes his story even more poignant.