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OCTOBER 2020
THE BIDENWIN WHAT COULD THE COMING MONTHS LOOK LIKE FOR YOUR TAXES?
I t has been a year of many twists and turns. For the past couple of months, we have watched both President Donald Trump and presidential candidate Joe Biden prepare for the coming election. We watched as former Vice President Biden picked his running mate, which told us what path the Democratic Party is determined to take. Now the far leftists are in control of the Democratic Party. Should the Democrats win this election cycle, there’s a very good chance we’ll see higher taxes. Corporations can expect higher taxes as soon as the Biden Administration sets up shop. Much of the general public can expect higher taxes as they rescind the Trump tax cuts. As reported by the Wall Street Journal, Biden has already stated he plans on raising taxes on the wealthy. According to him, “wealthy” is a married family of two with an income of $78,000 or more. His plan is to increase the tax on this class from a rate of 12% to 25%, or more for higher earners. On top of that, Biden wants to raise capital gains from 30% to 39.6%. In an Aug. 11, 2020, Wall Street Journal opinion piece, Ed Finn says, “Get ready for a stock market plunge of possibly 10% or greater if Mr. Biden moves into the White House.” Back in the 1990s, Bill Clinton became the first president in history to sign a tax bill that raised taxes retroactively. This covered the six months before he took office. So, we know an incoming Democratic president is going to go to work immediately to push through their tax “promises.” But it doesn’t end there. We also have many
baby boomers who are not at the peak of their retirement program and many workers who are pouring their savings into mutual funds at record levels. With this in mind, Finn goes on to state that annual returns in the stock market, even with higher taxes, have the possibility of 15% or greater returns. We also have a generation of young people who have never seen peace. They see their country fighting some sort of battle somewhere in the world — sometimes even in their own country! This is all a lot of doom and gloom. Here are a few more things to consider: Right now, the U.S. is the top oil producer. We are also home to the top 25 brands in the world. New regulations in manufacturing are bringing personal protection equipment and prescription drug manufacturing back to U.S. soil. Jobs are coming back. It’s not all doom and gloom. So, what road should investors take? Well, volatility will be the new norm, ranging from half a percent to 3% swings. This is daily. In order to lower the tax burden on retirees, it’s important to take advantage of any current tax breaks as much as possible. Think about doing an IRA to Roth IRA conversion or using your required minimum distributions (RMD) as financial donations to charities (if that income is not needed). Also consider that there are diminishing capital gains in higher income brackets. Look for tax deferral programs. And, finally, be prepared to take advantage of market swings. This means the buy-and-hold atmosphere in the short term of a potential Biden administration will most
likely NOT be a successful investment strategy. Instead, focus on opportunities to move assets based on market movement. A flexibility of investments between qualified investment choices — and staying under tax thresholds — is more important than ever. Looking ahead, keep in mind that we have reviewed other tax strategies to include family foundations, life insurance, and other tax-saving vehicles. But until the final votes are tabulated, all of these are still on the backburner. It’s important to note that if President Trump is reelected, there will be other tax ramifications to be aware of — including the expiration of Trump’s tax plan (which isn’t until 2025). But we will have a few more years to take advantage of this, along with other strategies. For now, stay tuned as we await further news from both campaign headquarters. It’s going to be a bumpy ride, at least for a while. In the meantime, if there is one thing to think about as we enter the peak of election season, it’s that taxes on baby boomers will possibly be among the highest in history, falling only behind the tax rate during World War II, when tax rates reached 95% in order to pay for the war.
–Gary Mattson
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DOES VITAMIN D HELP OUR BONES AND OUR MUSCLES?
A Previously Unknown Benefit of Vitamin D
Vitamin D enters the body in an inactive form. It doesn’t become active until it comes in contact with the right enzymes in either the liver or the kidneys. To learn more about what factors affect this vitamin’s rate of absorption and activation in the body, researchers observed the levels of inactive vitamin D in 116 women ages 20–74. What they found was that women with higher muscle mass had lower levels of inactive vitamin D, while women with lower muscle mass had higher levels of inactive vitamin D. The conclusion researchers drew was that active vitamin D might help optimize muscle strength. While that conclusion is not ironclad, vitamin D’s other well-known benefits still make it worth getting your daily dose. It can aid weight loss, enhance mood, support cardiovascular health, boost the immune system, and strengthen bones, among many other benefits.
As the weather cools and the days get shorter, we can’t rely as much on the sun for our daily dose of vitamin D. The primary function of vitamin D is regulating the amount of calcium and phosphate in the body. These nutrients are necessary for strengthening our bones and teeth, which becomes increasingly important as we age and our bones naturally become more brittle. While these benefits of vitamin D are well documented, did you know that getting your daily dose of vitamin D can also contribute to healthier muscles? A few years ago, researchers published a study that seemed to show that vitamin D could potentially help people gain muscle mass. While the research team said their results weren’t conclusive, their findings were certainly interesting.
HOW TO BUDGET FOR AND MAXIMIZE YOUR SAVINGS
W hile saving money is difficult for some and easy for others, we can all agree that doing what we can to put a little money aside can help us in the long term. Here are two ways you can get the most out of your savings. OPEN A HIGH-YIELD SAVINGS ACCOUNT. There are multiple ways to open a savings account, but which is the best? If you want the highest interest rates and low (or no) fees, a high-yield savings account is your best choice. The main difference between this kind of account and a traditional savings account is the annual interest rate. While some brick-and-mortar banks do offer high-yield accounts, many — and those with the highest interest rates — are offered through online-only banks. Why is it worth moving your money into a high-yield account? They offer interest rates that are 20–25 times higher than traditional savings accounts. Whereas a savings account at a traditional bank may offer a 0.01% interest rate, a high-yield savings account offers rates between 1%– 2.2%. So, if you put $10,000 in a traditional savings account with a 0.01%
interest rate, then you’d earn $1 at the end of one year. But if you put the same amount into a high-yield savings account with a compounding interest rate of 1%, you would earn around $135 in one year. PAY YOURSELF FIRST. Even if you have a great savings account with a high interest rate, it won’t do much good if it’s empty or not being added to regularly. Many people don’t think about their savings until after the bills have been paid each month. However, it’s actually better to save first! Contributing to your savings before you pay your bills or make other purchases will ensure you prioritize saving and maximize your great interest rate. As a bonus, when you put money into your savings first, then pay your bills, you’ll minimize the temptation to spend on unnecessary extras. To figure out how much to save each month, start by making a simple budget. Add up your monthly expenses, then see how much is left and how much of that you can put away. Make saving a priority by building this habit into your monthly routine, and you will rest easy knowing that you have a little extra tucked away for a rainy day.
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So, its potential muscle-boosting properties are just another reason to get more vitamin D.
To get more of this important vitamin in your diet, try adding salmon, mushrooms, and even canned tuna to your menu. Also, as winter approaches, it might be time to start taking a vitamin D supplement. Whether you’re 20 or 74 years old, it’s never too late to find ways to strengthen your muscles.
CLASSIC PUMPKIN SOUP RACHAEL’S
TAKE A BREAK!
Inspired by MinimalistBaker.com
Pumpkins aren’t just for pie — they make delicious soup, too! This fall, try your hand at this healthy soup recipe and warm up with a bowl.
Ingredients
• • • •
1 tbsp olive oil 2 shallots, diced
• • • • • •
2 cups vegetable broth
2 tbsp honey
3 cloves garlic, minced 2 1/4 cups pumpkin purée (homemade or canned) 1 cup canned light coconut milk
1/4 tsp sea salt 1/4 tsp pepper 1/4 tsp cinnamon 1/4 tsp nutmeg
Directions
1. In a large saucepan over medium heat, sauté olive oil, shallots, and garlic for 2–3 minutes. 2. Add the remaining ingredients and bring to a simmer. 3. Transfer the soup to a blender and purée. Pour the blended soup back into the pan. 4. Cook over medium-low heat for 5–10 minutes. Taste and add additional seasoning as desired, then 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
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INSIDE THIS ISSUE
1 2
What Would a BidenWin Really Look Like?
A Previously Unknown Benefit of Vitamin D
How to Save More Money
3
Classic Pumpkin Soup
Mark Your Calendar!
4
5 Steps to a Safer Hotel Room
**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.
KEEP STRANGERS AND VIRUSES OUT WITH THESE QUICK TIPS 5 Steps to a Safer Hotel Room
S taying home is the best way to protect yourself and your family from illness, but sometimes life gets in the way. Maybe you need to travel for work, to help a relative, or just to keep your kids from bouncing off the walls. If you have a hotel stay on the books, worrying about safety is understandable. But by taking these precautions, you can protect your loved ones and increase your odds of coming home healthy. 1. Bring a sanitation kit and use it! Most hotels are going above and beyond to sanitize their rooms these days, but it never hurts to take extra care. Before you check in, pick up cleaning supplies like disinfectant spray, wipes, plastic bags, and gloves. Then, use them to wipe down your room. Focus on big surfaces as well as features like faucet handles, doorknobs, lightswitches, and microwave buttons. 2. Skip the decorative linens. Many hotels don’t wash decorative bedding like comforters and fancy pillowcases. To be extra safe, strip these off the bed and wash your hands afterward. If you’re chilly, opt for the hotel’s spare blanket (it’s probably hiding in a closet) or bring one from home.
3. Quarantine your remote control. As USA Today puts it, “It’s common
knowledge that one of the germiest items in a hotel room is the remote control.” To avoid the ick, pick up the remote while wearing gloves and drop it into a Ziploc. Then, remove your gloves and seal the bag. Now you can use the remote without touching it directly! 4. Invest in a rubber door wedge. Viruses aren’t the only risk in hotel rooms — break-ins are another concern. To keep your room secure, bring a rubber door wedge. They cost less than $10 on Amazon and make kicking in a door much more difficult. 5. For maximum security, bring a door alarm. Simple travel alarms hang from the handle of a door and have two prongs that slide between the door and its frame. When the door opens and the prongs separate, that triggers the alarm. These simple devices send thieves running, and Lewis N. Clark makes a model for just $14.99.
Hopefully, these tips give you some peace of mind on your next trip. Happy trails!
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