Tag Archives: baby boomers

High Times

17 Jan

Isn’t it high time marijuana were legalized in California? It is strange to me that it isn’t. The legalization of pot isn’t something I crave for any personal reason. It is just something whose time has come. This article in the Economists seems to think so.  So do I.

With gangs murdering people up and down South America, Central American and Mexico, it is time to stop this reefer madness.  Because of black market pricing, gangs engage in turf wars for the profits.  Remove such incentive, just as we did with alcohol. One could make a very cogent argument that alcohol is much more harmful to society. But rules and regulations help control the worse aspects of alcohol.

We confuse the police in our state.  Remove the opaque nature. Allow our public defenders to concentrate on real crime and stop following up on calls for petty theft, break-ins, robberies and the gang activity that follows the trail of weed. Our prisons are stuffed with potheads. Why?

Criminality of pot is bad for our planet. Some reports show marijuana is the leading agricultural crop in California. Totally unregulated. The soil damage, water waste, chemical use and electricity used to grow pot would make anyone upset. But we don’t know the full extent of the damage being done by marijuana growers as the product is a secret one, grown away from regulatory bodies with cheap electrical panels that spark fires, chemicals that foul creeks and  rivers and worse, kill animals and people.

Lastly, it would be good for the economy to get this business out of the hands of stoners who see the easy money but refuse to accept responsibility for their destruction of planet and people and into the hands of responsible business owners and entrepreneurs who would be licensed, pay taxes and submit to regulations designed to protect users and our planet.

Isn’t it high time to put away antiquated and emotional feelings on this issue and begin a more reasoned approach?

I’m not advocating for 24 hour Amsterdam. But just as people drink beer and wine responsibly, most would also use marijuana responsibly.  The facts that come in from Portugal, Vancouver and the growing list of other places legalizing seems to support a new way of thinking.


What will your home be worth in 2014?

9 Jan

Many of clients have asked lately what I think about the coming year and where markets will go.

Obviously, due to my position, this question comes up quite a lot.  But recently, the market in question isn’t only the stock market but also the real estate market.

This article from the Fiscal Times is an interesting outlook on the 2014 real estate market in America.  The author makes interesting points, most concerning to me is the tight lending market.

For five years now, our Federal Reserve has been printing money in order to stabilize our economy.  One of the main reasons for doing this ‘quantitative easing’ (QE) has been to provide banks with liquidity in order that they may make loans. The theory being, banks make loans to businesses and individuals. The loaned money then gets spent in the economy and drives the consumer economy to recovery.

The only problem is, as this article points out, loans aren’t being made.  It is another example of our Government’s left hand not speaking to its right hand.  While the Fed and ostensibly the Obama administration want liquidity in the economy (QEs 1,2 & 3) Congress is busy dreaming up all sorts of ways to scare the hell out of banks that want to lend with misguided regulations.

So, what you have is a bunch of deer in the headlights known as lenders.  If lending standards could simply come back to pre-2000 underwriting, it would significantly increase lending, pumping up bank profits, economic activity and along with it, home prices and the stock market too.

I guess I’m just being too practical again.

In general, I think the residential al estate market in Northern California should continue to recover in 2014 but perhaps not at the same pace we saw last year.  Tight lending and interest rate increases aside, the simple equation of supply and demand still benefit the Bay Area home owner over the buyer at this time.  There is an increasing demand for homes and a limited supply for sale. That scenario will likely drive home prices higher in 2014.

If you’ve got questions about your own property, we can make time to sit down with you and go over your situation. Just give us a call.

What You Need to Know About Health Care Reform

6 Sep

In the next couple of months, you will be hearing a lot about health insurance.  Most aspects of the Affordable Care Act become effective in 2014 but whether they will impact you depends on your unique circumstances.  All too often, many consumers receive advice from individuals or companies with biased points of view or who may simply be unaware of the facts.


Debunking some common myths

The Patient Protection and Affordable Care Act is intended to expand access, remove certain limits, and protect customers, but this complex legislation has left consumers confused as to how it may affect them. Below, we debunk some common misunderstandings so that you can better understand the upcoming changes under the new legislation.


Myth: The new law cuts Medicare’s primary benefits.

Fact: The legislation adds benefits, such as annual wellness exams and preventive screenings, incorporated at no cost into Medicare Part B.


  • As federal subsidies are reduced for Medicare Advantage plans, insurers may look to cut expenses by scaling back on extra services, such as dental coverage, vision care, or gym memberships.
  • Other insurers may increase premiums or co-pays.
  • One change that may occur in the future is that higher-income Medicare subscribers may pay higher premiums. Premiums for Parts B and D are based on income; however, according to the new legislation, income levels will not be readjusted until 2020.
    • Currently, the income level starts at $85,000 for a single person and $170,000 for married couples. If you are close to these income levels in retirement, you might want to consider diversifying a portion of your retirement income portfolio by converting to a Roth IRA because tax-free withdrawals from a Roth IRA are not added to the Medicare premium income level calculation.


Myth: Medicare will be replaced with a national medical program.

Fact: Health care reform is not a national medical program or universal health care, but those who do not currently have health care insurance should find it easier to get and keep coverage. Ultimately, the intention of reform is to give consumers the opportunity to choose their plans and plan providers.


  • Starting in 2014, it is intended that state- and federal-established insurance exchanges will provide consumers and small businesses an avenue for comparing the benefits and costs of a range of private insurance health plans. Insurance purchased through the exchanges cannot be denied due to preexisting conditions and is guaranteed renewable.
  • Open enrollment for insurance purchased under the Health Insurance Exchange (HIE) marketplace begins on October 1, 2013, for coverage starting on January 1, 2014.


Myth: Americans are required to buy health insurance.

Fact: Technically, this is not true, but by 2014 almost all U.S. citizens and legal residents (with certain exceptions) must either have health insurance coverage or be prepared to pay a tax penalty.


  • Premiums for low- and middle-income individuals who buy insurance through the new exchanges will be subsidized based on their household income. Medicaid will remain the primary health care program for the poor.
  • The amount of the insurance subsidy will vary according to income, family size, and plan type.
    • Families with incomes up to 400 percent of the federal poverty level who purchase coverage through an HIE will be eligible for a reduction in premium.
    • Families with incomes less than 250 percent of the federal poverty level will qualify for lower deductibles and co-pays.
    • People will not be required to buy health insurance if the least expensive plan available costs more than 8 percent of their income.


Myth: Small employers are required to subsidize their employees’ health insurance.

Fact: This is not the case, although small business owners are encouraged to provide access to affordable coverage.


  • Many businesses with fewer than 50 full-time employees qualify for tax credits based on their contributions to employees’ health insurance. The smaller the business and the lower the average wage, the higher the potential tax credit. In 2014, the tax credit will increase.
  • Companies with 50 or more employees will be subject to fines for not offering affordable insurance that covers minimal essential health care. (On July 1, 2013, the Obama administration announced that it was giving employers another year to comply with the new rules.) The legislation considers health insurance affordable if 60 percent of health care expenses are paid by the plan and an employee pays no more than 9.5 percent of household income toward the family’s coverage.
  • If your employer provides you with access to health insurance, very little may change. Employer-provided health insurance plans in effect prior to March 23, 2010, are grandfathered under the new law, and some new consumer protections apply to these plans. For example:
    • Starting in 2014, these plans cannot have any annual or lifetime limit on benefits nor exclude children due to preexisting conditions.
    • Insured individuals cannot lose coverage due to illness or medical conditions, and dependent coverage covers adult children up to age 26 (unless the child has coverage available through his or her own employer).
    • In addition, making a claim for a seriously ill employee cannot increase premiums for the employer’s group.


Myth: All taxpayers will feel the tax bite from health care reform.

Fact: The brunt of the taxes associated with reform will impact the highest income taxpayers. Workers with annual adjusted gross income (AGI) of $200,000 ($250,000 if married) will see their payroll tax increase 0.90 percent and may see some investment income taxed an additional 3.8 percent. Some taxpayers will also pay the cost of the new health care reform through the revised threshold for claiming medical expense deductions.


  • Starting in 2013, only qualified expenses that exceed 10 percent of AGI are eligible for deduction, up from the previous 7.5-percent threshold.
  • In 2018, a new 40-percent tax will take effect for insurers that offer “Cadillac” health insurance plans. For the purposes of the health care bill, Cadillac health care plans are defined as those with premiums of at least $10,200 for single coverage and $27,500 for family plans.
    • Although this new tax will be imposed on the insurance companies, the costs will likely be passed along to the insured. Commentators predict that high-deductible plans will become more popular in order to keep certain insurance plans from being categorized as Cadillac options.
    • Deductible contributions to health savings accounts (HSAs) may become more popular as a way to bring down taxpayers’ AGI. (Deductible contributions to HSAs are only available to taxpayers who maintain a high-deductible health insurance plan.)
    • Tax-exempt bonds, tax-deferred annuities, cash-value life insurance, charitable remainder trusts and Roth conversions may become more attractive to investors in the highest tax brackets to help lower taxable income.


All in all, the health care reform law is intended to expand access, remove certain limits, and protect consumers. Feel free to contact us if you would like to discuss your current health care plans or how the new legislation may affect your financial situation.


Presented by Matthew J. Everson, CFP®, AIF®

MJ Everson financial | Intelligent Financial Guidance

This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a tax preparer, professional tax advisor, or lawyer. Municipal bonds are federally tax-free but may be subject to state and local taxes, and interest income may be subject to federal alternative minimum tax (AMT). The purchase of bonds is subject to availability and market conditions. There is an inverse relationship between the price of bonds and the yield: when price goes up, yield goes down, and vice versa. Market risk is a consideration if sold or redeemed prior to maturity. Some bonds have call features that may affect income. Annuities are long-term, tax-deferred investment vehicles designed for retirement purposes. Guarantees are based on the claims-paying ability of the issuer. Withdrawals made prior to age 59½ are subject to a 10-percent IRS penalty tax, and surrender charges may apply. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. The investment returns and principal value of the available subaccount portfolios will fluctuate so that the value of an investor’s unit, when redeemed, may be worth more or less than the original value. Optional features available may involve additional fees. Cash-value life insurance is a type of life insurance policy that both accumulates value during the policyholder’s lifetime and pays out upon the policyholder’s death. The interest and earnings on the policy are typically not taxable, and while some accrue a cash value that can be borrowed against, certain types may not allow you to withdraw from your cash value at all. Whole life, variable life and universal life are all types of cash-value life insurance.



To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.

Avoiding Inheritance Conflict in Your Family

7 Jun

Even in the most close-knit families, an inheritance can cause a feud if the deceased hasn’t left a detailed plan. You might be thinking, “That would never happen to my family!” Unfortunately, family feuds over inheritances are all too common.

To help ensure that your clan won’t be left bickering about money after you pass away, here are some tips to consider:

  • Be realistic and communicate openly. Your children may be depending on a significant inheritance to help them purchase a home, pay for a child’s education, or cover another large expense. To avoid disappointment, give them a sense of where you stand financially, emphasizing that your finances may change depending on medical expenses or other unexpected costs.
  • Keep your documents up to date. Be sure to update your will and beneficiary designations to reflect life events such as marriages, divorces, new grandchildren, and so on. Keeping your documents current will help ensure that you don’t unintentionally include or exclude anyone.
  • Address personal property. In addition to your will, leave a separate list of personal property with instructions detailing who should inherit each item. The list should describe each piece of property you wish to gift, leaving no room for interpretation.
  • Don’t task the oldest beneficiary with distributing your assets. Many parents inadvertently create conflict by naming the eldest child as the beneficiary of their assets, expecting him or her to evenly distribute the inheritance to the other siblings. If you want all of your children to inherit equally, put them all down as legal beneficiaries.
  • Give everyone a role. When you assign responsibility for handling your estate, you’re making a statement about whom you think is capable and trustworthy. Consider how your children will react; if possible, assign everyone a role, even a small one, to play in the decision-making.
  • Explain yourself. What happens if you don’t want to split your assets equally among your children? Many parents consider this option if one child is financially successful while another is struggling. If you plan to distribute your assets unequally, include a personal note with your will, explaining why you distributed your assets the way you did.
  • Eliminate uncertainty with a trust. A common estate planning tool, a trust can help you manage and control the distribution of your assets in the event of your death. Through a trust, you can elect to distribute an inheritance in increments if you pass away before your children are mature enough to manage money wisely. If your child has financial problems or creditor concerns, you might also consider using a trust to hold a distribution until a later date.

Though the estate planning process involves many legal responsibilities, it’s important not to lose sight of the personal aspects. By carefully planning and setting expectations ahead of time, you’ll help protect the most valuable part of your legacy—your family.

For more articles like this, please click here.


This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Investors should consult a tax preparer, professional tax advisor, and/or lawyer.

© 2013 Commonwealth Financial Network®


So You Want to Win the Lottery?

29 Mar

Recently, the news was abuzz with a story about a man who had moved to New Jersey from the Dominican Republic that had won $338 million in the Powerball Lottery!

But how will this ultimately turn out for Pedro Quezada?  This man didn’t even own his own car, and now he’s going to get a chuck, after taxes, for about $150 million!  This sounds amazing. And certainly, it would be something I’d love to help somebody manage!  But will the smile on his face fade in the coming months?

The history of lottery winners is not good. Like many sports stars or musicians who come from poverty and suddenly find great wealth, Pedro may fall victim to scammers, greedy family, charity and buying too many things he won’t need.

Cautionary tales are everywhere for lottery winners.  I’d love to win one day. I don’t play often. But do dream of all the good I could do with such substantial sums of money.

Here’s my list of wishes, were I to win –

  1. Pay off the mortgages of my brothers and parents.
  2. Pay off my mortgage and also that of my kid’s home.
  3. Establish a foundation to give to charities like Rotary. I’d also find ways to give to charities that strive to increase literacy around the globe.
  4. Buy a little farm house in Provence.
  5. Buy a tiny little beach bungalow in Maui.
  6. And one little ski chalet in Tahoe.
  7. I’d probably get Sarah and I a new car. Nothing fancy. Maybe a Subaru and a BMW nice sedan.
  8. I might just contemplate retiring young, too!

What would you do?

Another Housing Bubble?

27 Feb

The residential real estate market is starting to heat up.  How do I know? Because no less than five of our clients have phoned or emailed us asking “Should I sell my home?”  My answer – maybe.

For one, ask yourself where you’ll live next?  While the rumors of getting multiple bids on listed homes is true, one reason so many folks bid on listed homes is so few homes are for sale.  That means, if you intend to buy another home after you’ve sold yours, you better plan on renting for a while until tat inventory problem normalizes.

house for sale

Two, why are you selling? I have many friends in the business of real estate.  So, I hope they don’t get angry about this next statement, but some agents don’t have your best interest at heart.  There are a lot of agents out knocking on doors, letting you know how much your home could sell for if listed.  While they may be right, don’t be pressured. Consider the entire situation.

What are your property taxes going to be in a new home? If you’ve lived over 15 years or more in one home, the extra cost of property taxes may shock you.  Consider all the costs of moving.  Repairs to the home to be sold, repairs on one to be bought, possible property and insurance increases, and of course just moving is an expensive pain in the tush!

One client is thinking seriously of selling and related a story where his realtor is pushing him to make many improvements.  While saying that, she is assuring him he’d get over 20 bids and his house would sell for more than he suspected it would. Well, if it is in such great demand, why not make the buyer upgrade?  What would be the point of you making upgrades as long as things are up to code?

Here is a handy article about all kinds of remodels and which ones will or won’t really be a good investment.  Check it out here.

If you have questions on your own property, let me know.  We have no dog in that fight so we’re happy to give unbiased and quality financial guidance on this very important topic.  Selling or buying a home is not entirely a fiscal equation.  However, it is likely to be one of your largest financial moves, don’t you think you should talk that over with a financial planner?

Cheer Up Dad!

26 Feb

I received this via facebook last week and it was truly touching.

My dad recently turned 70 and I wrote about much of his health issues last year. He is once again battling tough times with his diabetes.

To cheer him up, I thought I’d share this photo.  I love you Dad! And you too mom 🙂

dad post


Can You See without Your Eyes?

25 Feb

Oliver Sacks is a famous neurologist and author. He has a wonderful gift as a storyteller.

His research and writing has enriched our knowledge of the infinite variations of human psychology. Sacks has studied the connections between music and the brain (see this amazing video!), as well as disorders such as Tourette’s syndrome, Parkinson’s disease, and many other disorders that Sacks has worked to understand.

Enjoy this wonderful man and these excellent videos.

You thought my job was easy?

5 Feb

This article here, more than any I’ve read lately, illustrates how maddening the world of investing is these days.  here you have some of the world’s largest and most respected investment managers like Mario Gabelli, Bill Gross, and others, giving their predictions for 2013.

Eight people. Eight totally varied views. Some think the world is ready to totally disintegrate.  Others can’t wake to make double digit returns this year.  One, Bill Gross, can’t figure out what he thinks.

Who is an advisor like me to believe?  Your thoughts?

Click here for the story.

Historic Low Rates Present Retirees with Quite a Challenge

30 Jan

What now?

When I first got my start in this business in the mid-1990’s, interest rates on short term CDs hovered around their 50 year averages. Somewhere around 5% for 12 months.  As the economy over-heated, one tactic used by Alan Greenspan (remember him?) was to raise interest rates to cool things off.

That led to rates of 6%, then 7% and even 7.5% for 12 months with one of those (at the time) new-fangled internet banks.  For a five year CD, I could lock in rates of 9%.  Funnily enough, as the dot com bubble was inflating, none of my clients felt like 9% was very appealing.

Anyway, things peaked out in 2001 or so and then began a series of rate reductions over time to once again pump up the economy.  Back in those high-interest days, some of my clients would actually remind me of the days, back in the early 80’s when they could lock in rates of 15% or more on 12 month CDs!

So, as an advisor to retirees, it made my life easy when rates were in the 5-6% range.  Today, it is difficult to find a 12 month CD with a reputable bank that pays more than 1%.  The impact this is having on retirees is difficult to quantify.

What it has led to is a new series of “Retirement Specialist” who claim to be able to offer you ways to protect your portfolio against market losses.  They are on the radio, on TV and the internet, too.  I’ve seen and heard some very well-crafted marketing of late designed simply to scare a senior. They tell you Warren Buffet has sold his stocks and so should you.  Or they claim to have predicted the 2008 crisis and are now predicting an even greater calamity.

Never short on fear-mongering, these folks do sometimes (almost always?) lack factual basis. Not surprisingly, these charlatans end up recommending an equity indexed annuity after they’ve assessed your needs. Translation – they are assessing whether your savings placed in their garbage investment will help with their need for next month’s BMW payment.

As rates remain low, people have begun to add more and more risk to their savings portfolios.  Is this the right answer?  Bond investments have seen huge inflows of money.  But aren’t those a bit at risk when rates ever do rise?  Stock investments that focus on dividend paying stocks have seen lots of money coming in, too.  And one must always be careful about annuities and whether they are appropriate for an individual’s needs.

To be quite honest, it has never been more difficult for us to craft a quality portfolio that keeps capital preservation, income and growth along with proper liquidity in mind.  Bet you thought my job was easy, didn’t you?

If you clicked this hoping I had a more specific answer, I’m sorry. There is no silver bullet. Diversity, low-costs, flexibility, control, liquidity, finding guarantees all have their own challenges these days.  But they remain the key to safe investing in retirement.

One day, rates should once again go up.  And when they do, we’ll adjust portfolios.  In the mean time, the only solution we have is to stay short, cautious, liquid and diverse.  Sometimes, we take small portions of the portfolio and tie it up with longer-terms if the safety and yield opportunities fit your needs.

Please feel free to email or call for more specifics. Due to many regulations designed to keep government regulators employed, make my job harder and help keep bad advisors in business, we can’t list too many specifics here.

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