Kiplinger's Personal Finance

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ESG FUNDS Put your money where your values are with these 15 mutual funds and ETFs that screen for environmental, social and corporategovernance factors. kiplinger.com/kpf/esgfunds SOCIAL SECURITY FORECAST Kiplinger’s staff economist offers an early look at the 2022 cost-of-living adjustment for Social Security beneficiaries. kiplinger.com/kpf/cola22 INSURANCE YOU MAY NOT NEED Critical illness insurance? Social Security insurance? Consider eight types of policies that may be more costly than they’re really worth to you. kiplinger.com/kpf/noneed Kiplinger Today Profit from the best of Kiplinger delivered to your e-mail inbox every weekday. Sign up for our Kiplinger Today e-newsletter at kiplinger.com/links/ktoday. FACEBOOK: KiplingerPersonalFinance TWITTER: @Kiplinger INSTAGRAM: @KiplingerFinance…

social security fixes

In a pay-as-you-go system like Social Security, the raise-taxes-cutbenefits formula seems to be the only option (“Shoring Up Social Security,” March). What your story overlooked was that providing ownership of Social Security accounts to plan participants, and investing the contributions into stocks and bonds, provides the means for long-term financial stability. Such an approach has been successfully applied in Chile and several other countries. The ownership of one’s retirement assets and the ability to pass them down to one’s heirs are very popular features of these plans. Privatization of Social Security is a radical departure from the current system, but it would add stability and create participant wealth over the long term. SAM EAGLE HUNTINGTON BEACH, CALIF. None of the options presented considers the value of the U.S. economy and the benefits…

one year later

We just passed the one-year mark since pandemic-induced shutdowns rocked the economy, led to millions of layoffs and sparked the first bear market in 11 years. Those unlucky enough to have lost their job—and possibly their health insurance along with it—likely lost a few steps in their progress toward their financial goals. But they’re not the only ones who need to rebuild wealth. If you bailed out of stocks when the markets tanked a year ago, you missed a rebound that added 75% to the S&P 500 from its low point through March 5. The cover story, beginning on page 40, reviews 11 key components of a wealth-building strategy. It was an all-staff effort, and as we wrote the story, we examined lessons from the pandemic that could help you temper…

states eye tax hikes for high earners

TALK OF TAX HIKES ISN’T LIMITED TO Washington, D.C. Several states are also considering boosting taxes on their most prosperous residents. Jay Inslee, the governor of Washington state, has proposed a 9% capital gains rate on gains of more than $25,000 ($50,000 for married couples). New York Governor Andrew Cuomo has proposed five new, higher tax rates for individuals who earn $5 million or more, with a top rate of 10.82%. Minnesota Governor Tim Walz has proposed a new top tax rate of 10.85% for couples with income of more than $1 million and singles with income of more than $500,000. Walz also wants to impose a capital gains tax of between 1.5% and 4% on profits that exceed $500,000, as well as reduce the state’s exemption from estate taxes. Pennsylvania Governor…

moving to lower-tax states

United Van Lines, a national moving company, says the most commonly cited reasons for moving in 2020 were to take a new job and to be closer to family. But for high earners and retirees, low taxes may also be a factor. Most of the states with the highest percentage of outbound moves in 2020 had above-average tax rates, according to Kiplinger’s state-by-state tax guide, while those with the highest percentage of inbound moves tended to have lower tax rates. States with the largest percentage of outbound moves in 2020: 1. New Jersey2. New York3. Illinois4. Connecticut5. California SOURCE: UNITED VAN LINES States with the largest percentage of inbound moves in 2020: 1. Idaho2. South Carolina3. Oregon4. South Dakota5. Arizona…

why your refund might be late

Erin Collins is the IRS national taxpayer advocate. Before joining the IRS in March 2020, she was managing director of KPMG’s tax controversy practice for the western region. How has the pandemic affected the ability of the IRS to provide service to taxpayers? Social distancing requirements limited IRS operations that require employees to work in close quarters, and that created several categories of work backlogs. The IRS closed a number of its campuses, so it was parking paper tax returns and correspondence in trailers for a while. Now, my understanding is that they’ve gone through all of that correspondence, and it’s been entered into IRS systems but not yet worked. At the end of January, there were still 6.7 million individual 1040 paper tax returns that had not been processed. If…