Kiplinger's Personal Finance

Kiplinger's Personal Finance March 2020

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Written to help you do a better job of managing your personal and family financial affairs and to help you get more for your money. You get ideas on saving, investing, cutting taxes, making major purchases, advancing your career, buying a home, paying for education, health care and travel, plus much, much more. Special issues cover the latest information about car buying (December) and Mutual Funds (March and September).

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12 Numéros

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3 min.
taxes and retirees

NAME WITHHELD BURLINGAME, CALIF. Editor’s note: Yes, California’s top income tax rate is 13.3%, but most people pay at a much lower rate—in fact, with nine brackets starting at 1%, California actually has one of the most progressive tax-rate structures in the nation. Our classifications are based on the overall estimated state and local tax burden for a hypothetical retired couple with $120,000 of income (mostly from Social Security, IRA withdrawals and a pension). For that hypothetical couple, California is in the second tier of states we consider tax-friendly. (Go to to see how all 50 states stack up.) Sales and property taxes are based on state-wide averages. Although those taxes may be high in certain parts of the state, they are countered by lower rates in other parts of the…

3 min.
antisocial security

My most recent birthday was a significant milestone: I turned 62. And as every American within two decades of retirement knows, that’s when you can claim Social Security benefits. Turning 62 prompted me to dig up my latest Social Security benefits estimate to incorporate into my retirement financial plan. I don’t intend to claim benefits until at least full retirement age (66 and 6 months for someone born when I was), when I can lock in a monthly benefit about 35% higher than I’d get at my current age. In fact, I may wait until age 70 so I can earn the 8%-a-year bonus for three and a half years. But it’s comforting to know that if I need the income sooner, it’s there. (We help you sort out the best…

3 min.
some heirs could face a tax squeeze

IF YOU PLAN TO LEAVE A HEFTY part of your IRA to your adult children, you may want to schedule an appointment with your estate-planning attorney and your financial planner. Don’t be surprised if they’re booked up for a few weeks. That’s because the Setting Every Community Up for Retirement Enhancement (SECURE) Act, signed into law at the end of 2019, contains a worrisome provision for diligent savers and their heirs. Starting in 2020, non-spouse heirs who inherit IRAs or 401(k)s lose the ability to “stretch” their required minimum distributions (RMDs) from an inherited account over their own lifetime. Rather, they must drain the account within 10 years after the year of the owner’s death. That means losing what could be decades of tax-free growth, forcing larger withdrawals and potentially jacking…

1 min.
look past global tensions

With tensions again escalating in the Middle East, investors should remain calm and stick to their long-range investing plan. According to investment research firm CFRA, since World War II, the average market loss after military or terrorist shocks has been just 5%, measured by prices for Standard & Poor’s 500-stock index. The average time it has taken for stocks to bottom is 22 days, with the market recovering all losses in an average of 47 days. The biggest hit came from the attack on Pearl Harbor in 1941, when stocks lost 19.8% and took 307 days to recover. Iraq’s invasion of Kuwait in 1990 triggered a 16.9% drop, recouped in 189 days. More recently, in 2017 North Korean missile threats shaved 1.5% off stock prices; the loss was erased in…

1 min.
more ways the secure act could affect you

➜ Starting in 2021, part-time employees will be able to contribute to a 401(k) plan. In the past, employees who worked fewer than 1,000 hours during the year typically weren’t allowed to participate in their employer’s 401(k) plan. ➜ Parents can take penalty-free with-drawals of up to $5,000 from a 401(k) or IRA after the birth or adoption of a child. ➜ 401(k) plan administrators will be required to provide an annual estimate of how much money plan participants could get each month if they used the account balance to buy an annuity. ➜ Workers can now contribute to a traditional IRA after age 70½ (but they may be better off contributing to a Roth instead).…

3 min.
alexa, protect my privacy

Theresa Payton is CEO of security consulting company Fortalice Solutions, cofounder of Dark Cubed, a cybersecurity product company, and former chief information officer for the White House. Reports circulated recently that hackers had accessed Ring home security cameras and used them to speak to and taunt their owners. Why are crooks interested in smart devices? Investigations into these events are ongoing, but we know that a forum was set up online where hackers were livestreaming some of the things that they were doing, ostensibly to show the dangers of these types of devices. It was a violation of privacy and very scary for the victims, but we really haven’t seen yet how these devices could be used to conduct economic and political espionage. You may think that your day-to-day life is…