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Archive for November, 2017

Tax Reform?

November 15th, 2017 at 10:14 pm

My thoughts on the tax reform? It appears the reform is going to hurt all families with more than 1 kid. If you had 2 kids before and took the standard deduction you had $12k standard deduction and $16k in personal exemptions for $28k. Now with the standard deduction raised to $24k but personal exemptions gone by the way side it appears to be less than the $28k the family with 2 kids had. Assuming a larger child tax credit is $600/per child for $1200 in tax credit.

It really depends on the bracket but if I had to guess most families will end up paying more in taxes with more than 2 children. The $600 tax credit won't offset the personal exemptions.

As far as the SALT I think they should keep it instead of the mortgage deduction to be fair. After all it's a double taxation. And honestly they should probably do away with the mortgage deduction period. But that's impossible with the lobby groups. I also have seen a lot of elderly people use the medical deduction and if you are in nursing home care the bills for that are astronomical and easily fufill the 10% income minimum to write off.

Something that does bother me is that estate tax going away. Seriously so $22 million tax free inheritance is not enough? And the middle class needs to give away inheritances above that tax free? And it's inherited at a step-up basis? Really those 5000 people who have enough to leave more than $22 million need the tax break?

I have to admit I'm pretty liberal. But I'm a bit stunned these tax cuts have come without really cutting the budget. That republicans are okay with increasing the deficit so much? I thought it was supposed to be cut taxes, shrink government and deficit? Seems resonable and responsible budgeting. But instead we're cutting taxes and still spending wildly?

I am curious what will pass. It'll be an interesting sell.

minivan test run

November 8th, 2017 at 11:11 am

So I'm renting a minivan for a week. Not because I want to but on Friday I was in a fender bender with a high school senior in a parking lot. I swerved to avoid him from running his stop sign and making a left turn. Fortunately it wasn't too much damage. However I did force him to stop and call his mom. He was about to drive away. Sigh, if you have teenagers tell them that the number one thing is to call you. Don't cry and say my parents will kill me. Yes they'll be upset but I think they'd be more upset if you just drove off and didn't call them.

Luckily it wasn't too much damage. My car will be ready by Monday after a week in the shop. So I am filing through my insurance who will go after his insurance. He offered me $3000 or more to pay for all the damage off the books of insurance. I said no.

My friend later told me it was wise since he was a minor and underage not to accept going through cash.

That being said I don't like my insurance company commerce west through AAA at all. They are incompetent and slow. I didn't get the emails until Tuesday when I called for the 3rd day in a row looking for my forms and I had to email the claims worker because they couldn't get my email right. I further had called and reported everything Friday right after and they still couldn't get the paperwork in order to the shop and rental car company. I had to call and write down the claim number which was wrong by the way. Ridiculous.

This is the same company that didn't cancel my renter's insurance when we bought a house. Then didn't update my address or mail me a renewal for auto insurance because they sent it to our rental. Which boggles the mind since I prepaid to our mortgage company a year of home insurance and it would stand that cancelling our rental policy would go hand in hand? At least that's what I was told. Then updating the address I also assume was common sense wasn't. They fixed it eventually.

This is totally my fault for getting kicked off of Ameriprise for non-payment because we were traveling and I didn't get the mail until too late. However as of March 10th we are going back to Ameriprise because they are competent when handling claims.

Anyway though since we have rental car coverage I got a minivan to test run what it would be like. I have to admit I love the convenience. I won't buy a dodge caravan it's terribly uncomfortable driving. But wow it's super useful with carpooling and just picking up kids. I am definitely on board with buying one.

The only hesitation I had was waiting until next year the 2019 Subaru Ascent. But I think I want a minivan with the larger trunk. Of course I have to really consider the options.

Retirement compounding numbers

November 3rd, 2017 at 05:30 pm

Here are some interesting compounding numbers. I don't want to run the returns right now.

DH in 2006 started saving the maximum 401k and IRA. But he contributed to Roth IRA in 2005 In total he's saved $201,500 in 401k and $55,000 in a IRA. His total retirement savings is currently $651,693. The number break down something like this.

2005 $4,871
2006 $8,871
2007 $28,729
2008 $56,569
2009 $62,282
2010 $116,743
2011 $174,548
2012 $202,696
2013 $262,920
2014 $381,248
2015 $437,108
2016 $469,526
2017 $532,991
11/2/2017 current value $651,693 with only contributing $18,000 and we haven't saved our Roth IRA.

For me I sort of started in 2003 but my numbers are messy and I didn't have a 401k. But as of today I have $108,687.

2003 $1,604
2004 $1,650
2005 $1,523
2006 $5,797
2007 $6,055
2008 $11,247
2009 $11,964
2010 $18,810
2011 $21,820
2012 $29,829
2013 $39,922
2014 $62,515
2015 $77,467
2016 $83,467
2017 $93,054

11/2/17 current value $108,687 without $5500 2017 contribution. I have contributed $55,000. Power of compounding and staying the course? I've been boringly invested in just the stock market and nothing fancier than an index fund.

If things continue the way they are going I am going to predict we'll pass $1 million in retirement accounts in the next 18-24 months. I guess the truth is that slow and steady win the race. Probably we'd have made more investing in RE but this was pretty easy.

Keep on chugging.