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SEPTEMBER 2020
WHO ARE TAMRA AND TEFRA ANDWHY SHOULD I CARE?
into the hands of his heirs, tax-free. And no, he didn’t even have to put $300,000 in upfront. He could make lifetime payments.
In the 1960s and into the early ‘70s, wealthy individuals would buy life insurance policies and throw a million dollars into them. Then, after they passed, the money from the policy would be paid out tax-free. After the ‘70s, the government figured out this loophole that allowed the transfer of wealth without incurring any taxes and decided to put a stop to it. This is where TAMRA and TEFRA come in. TEFRA, the Tax Equity and Fiscal Responsibility Act, was implemented in 1982. TAMRA, the Technical and Miscellaneous Revenue Act, arrived in 1988. These two acts prevent someone from putting “too much” into their life insurance policy. The benefits are now taxed as ordinary income, which does away with the idea of having a tax-free asset. You might be saying, “If the laws have changed, Gary, why are you telling me this? Besides, I don’t have a million dollars sitting around to put into something like this.” I bring this up because, due to COVID-19 and the Coronavirus Aid, Relief, and Economic Security (CARES) Act, new legislation has made it possible for life insurance contracts to serve as a new way to pass on substantial wealth without being taxed. Here’s an example of what I mean: I was recently talking to a client who was considering his options for passing his wealth to his children and grandchildren. I told him that he could pass a million dollars to his kids with very little effort. We could set it up for 30 cents on the dollar. Basically, for $300,000, he could put $1 million
He said, “Gary, this is exactly what I’m looking for. Tell me, what’s the investment?”
I explained it was a life insurance contract. Naturally, he had his reservations. He said, “When I first met you, I knew you were a big life insurance guy. I had no interest or need for life insurance. Why would I need it now?” His goal was to pass as much of his wealth as possible to his heirs. He wanted to know how this was set apart from things like retirement or investment accounts. One form of investment that people once used to pass wealth to the next generation was the stretch IRA. But like the life insurance policies of the ‘60s and ‘70s, the government put a stop to it. In the past, a stretch IRA was an IRA passed from generation to generation. It could generate tax-free growth for decades. Now, the law requires an IRA to be paid out within 10 years after it’s passed to the next generation. However, if you took the IRA money as it’s paid out over 10 years and put it into a life insurance contract, you could pass that wealth down to the next generation. If that means $300,000 paid out over 10 years, that could turn into a tax-free $1 million through that life insurance contract. Now, I’m not suggesting you run out and buy a life insurance policy. But, if you have qualified retirement assets in a 401(k), 403(b), 457, Roth IRA, or anything else, look at how those
assets are doing. Would you want your assets generating a 300% tax-free return?
As they say in the fashion industry, if you wait long enough, the fashion will come back around. Right now, the ‘90s are in vogue. Wait long enough, and we’ll be back in bell bottoms and platform shoes. The same can be said for the financial industry. Tax-saving strategies from decades ago are back in vogue. It’s just a matter of deciding what is right for you. If you want to look at the potential of taking your IRA money to the next level, please go to our website at MattsonFinancial.com or give us a call to learn more. I also encourage you to view our webinars, which are full of great information you can use when strategizing for your next move. We have many webinars planned for the upcoming months, and if there is a topic you would like us to cover, just let us know. So, as you rake leaves this fall and dream about the warmer months, don’t forget to think about your financial health! Now is a great time for a financial checkup to make sure everything is just the way you want it.
–Gary Mattson
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2 Surprising Ways Artificial Intelligence Protects Your Money and Future
Most people who hear about artificial intelligence (AI) conjure up an image of a robot acting and thinking on its own. However, it’s far more than that. AI systems are used by businesses to identify human behavior patterns and tailor marketing messages. They’re also used by health care professionals to provide diagnoses and monitor trends. And now, AI is being used for financial security. Risk Management Many are concerned about the risk of someone hacking into their bank accounts and cleaning them out. While that can happen at any moment, individuals often have a number of safeguards in place to protect their finances and mitigate this risk. The same is true for businesses, such as banks, credit card companies,
or online retailers, though the risks are often far higher for these companies than they are for individuals.
How does AI help? It works with data faster and more accurately than a human ever could. By using AI to monitor financial transactions, a company can keep track of the real-time activity of its customers and verify its authenticity. For example, someone who makes a large withdrawal from their bank account might get an AI-generated call, text, or email seconds afterward to verify the transaction. Fraud Detection AI can also predict and flag unusual activity associated with fraud. By combining two of its processes — data management and pattern
CHANGE CAN BE EASY
Pam Marmon’s Outline for Effective Post-Pandemic Transformation
unwilling. With your company united toward your vision, you can begin to enact real change. However, this is only the beginning. Marmon’s book also outlines how to connect with fellow leaders in your company
Pam Marmon understands what it means to adapt. After growing up in Bulgaria, Marmon had to modify her way of living when she emigrated to the U.S. Today, she’s a CEO, entrepreneur, wife, and mother who believes that change doesn’t have to be difficult. In fact, she’s mastered it. Marmon has even established a company, Marmon Consulting, that helps other companies develop strategies for executing transformation. In Marmon’s book, “No One’s Listening and It’s Your Fault: Get Your Message Heard During Organizational Transformations,” she outlines her proven methods for effective communication in any company setting, from a major corporation to a family business. Released on March 24, 2020, Marmon’s advice is timely in a period when many business owners are searching for proactive solutions and the next step in finding post- pandemic success. Marmon’s book is the perfect guide for business leaders who recognize the need for tangible change and want to execute it as effectively as possible. The key, Marmon explains, is to identify your company’s culture and cater your plan’s language to suit what will resonate with your employees the most. This will establish a sense of alignment with your business’s vision and direction, which can be one of the biggest hurdles to overcome. You cannot achieve success in a period of change if your team is doubtful and
to develop a framework for growth. By creating a stable foundation and inspiring change, you’ll find this time of major transition to be much smoother than you may have anticipated. As a result, your company will come out on top at the end of the COVID-19 era.
Marmon’s mantra is inspiring: “With the proper process, change is not hard.” And with her book, “No One’s Listening and It’s Your Fault,” business leaders can see just how simple change can be.
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Upcoming Events Women’s Retirement Roadmap Live Webinar
Sept. 15, 2020, 6 p.m.
Presidential Elections & Markets Live Webinar
identification — AI can pinpoint oddities within a person’s finances. For example, if a card is used for a purchase in America then used a few hours later for a purchase in another country across the world, AI can detect this suspicious activity almost immediately and send an alert to the cardholder. Additionally, AI is created to learn , which means that over time, it will become more attuned to what is or is not fraudulent activity. Artificial Intelligence is a powerful and beneficial tool for business owners and individuals alike. Read more about what AI is doing in the financial world at MarutiTech.com/ways-ai-transforming-finance .
Oct. 6, 2020, 8:30 a.m.
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EASY STUFFED SWEET POTATOES Abigail’s
Inspired by EatingWell.com
Who says a loaded potato has to clog your arteries? In this healthy version that serves four, a sweet potato base is topped with fiber-rich bean salsa.
Ingredients
• • • •
1 tsp coriander
• •
4 medium sweet potatoes 1 15-oz can black beans, drained and rinsed 2 medium tomatoes, diced
3/4 tsp salt
1/4 cup sour cream 1/4 cup fresh cilantro, chopped
• • •
1 tbsp olive oil
1 tsp cumin
Directions
1. With a fork, prick each sweet potato a few times. Microwave the potatoes on high 12–15 minutes, or until cooked through. 2. In a microwave-safe bowl, combine the beans, tomatoes, olive oil, cumin, coriander, and salt. When the potatoes are done, microwave the mixture on high for 2–3 minutes. 3. Cool potatoes slightly, then cut each potato open lengthwise. Pull the halves apart to create space to spoon the warm bean salsa inside. 4. Add a scoop of sour cream to each potato, garnish with cilantro, and serve!
Solution
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F I N A N C I A L S E R V I C E S , L L C
3226 28th Street SE Kentwood, MI 49512
INSIDE THIS ISSUE
1 2
Who Are TAMRA and TEFRA?
What Can AI Do for Your Finances?
How to Enact Effective Change
3
Easy Stuffed Sweet Potatoes
Mark Your Calendar!
4
How 11 Days Were Deleted FromHistory
**Reminder: If you have any changes to your financial situation, please notify us as soon as possible.
Investment advisory services are offered through Mattson Financial Services, LLC, a Registered Investment Advisor in the state of Michigan. Insurance products and services are offered through Lakeview Financial Group, LLC. Mattson Financial Services, LLC and Lakeview Financial Group, LLC are affiliated companies.
HOWTHE BRITISH CHANGEDTHEIR CALENDAR SYSTEMAND CAUSED CHAOS 11 Days Deleted From History
Finally, the British chose the year 1752 to make the change. But, in order to make it work, they had to “jump” forward. For instance, 1751 could only be 10 months long — starting
For centuries, Europeans used the Julian calendar, created by Julius Caesar in 46 B.C. It was based on the solar calendar, so most
of Europe thought it was the most accurate calendar. However, over the centuries, dates had “drifted,” and many important days, like Easter and the spring equinox, were no longer falling on the dates they were supposed to. To compensate, the new Gregorian calendar was developed and put to use by Pope Gregory XIII in 1582. It helped put things back in order and eliminated the extra day every 128 years. However, not everyone adopted the Gregorian calendar right away, such as the British. That meant that Europeans were using two diverging calendars for over
with March and ending with Dec. 31, 1751. But even that adjustment didn’t quite bring the English up to speed in time to make the shift. They also had to cut 11 days from 1752. The unlucky dates that were cut were Sept. 2–14, 1752. The people were not happy. English historians found research that British citizens chanted “Give us our 11 days!” in the streets. The phrase became so popular that some politicians even campaigned with that as their slogan. Several other historical
accounts state that many people were worried that by cutting the calendar, their own lives would be cut 11 days shorter. There was a lot of confusion and chaos, but over time, dates fell where they were supposed to, and everyone lived their full lives, those 11 days included.
200 years. Talk about confusing! People realized that as the world started to expand and as countries became more connected, having a single calendar system was critical.
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