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Kiplinger's Personal Finance

Kiplinger's Personal Finance

August 2021

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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United States
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R 71,23
R 284,77R 199,34
12 Issues

in this issue

3 min
you may get more time to tap retirement accounts

LEGISLATION THAT HAS widespread support in Congress would give retirees more time before they must start withdrawing money from their traditional IRAs and other tax-deferred retirement plans, pushing back the age to take required minimum distributions to 75 over the next decade. The Securing a Strong Retirement Act of 2021, nicknamed “SECURE Act 2.0,” would change the age for taking RMDs from 72 to 73 on January 1, 2022, and gradually increase the RMD age to 75 by 2032 (see the table at right). RMDs are based on the total amount of money you have in IRAs and other tax-deferred accounts at the end of the year, divided by a factor from IRS life-expectancy tables. That isn’t a problem for retirees who withdraw the equivalent of their RMD (or more)…

1 min
calendar 08/2021

MONDAY, AUGUST 2 August is National Eye Exam Month, and if you postponed your annual exam during the pandemic, this is a good time get a checkup. You can use money from your health savings account or flexible spending account to pay for your exam (or the deductible, if the exam is covered by insurance). If your optometrist says you need new glasses or contact lenses, you can use your HSA or FSA to pay for them, too. ▴ FRIDAY, AUGUST 6 Before you start shopping for back-to-school items—online or in-store—check to see whether your state is offering a sales tax holiday. States offering tax breaks for back-to-school gear this week-end include Arkansas, Florida, Iowa, Maryland, Missouri, New Mexico, Ohio, Oklahoma, South Carolina, Texas and Virginia. If your state is offering a tax…

1 min
this fund bets on revenues

BARGAIN-PRICED SHARES IN SMALL companies have been on a tear lately. The S&P SmallCap 600 Value index has climbed 72% over the past 12 months. INVESCO S&P SMALLCAP 600 REVENUE ETF has done even better, gaining 113%. The ETF’s holdings are weighted by revenues, rather than market value, which helps to “exploit the concept of buy low, sell high,” says Invesco’s Nick Kalivas. No matter the reason that stocks run up in price, every three months the fund rebalances based on revenue. That shields the ETF some from fad investing trends. For example, after gaining more than 5,000% over the past 12 months, GameStop is the top holding of the fund’s parent index, the market-value-weighted S&P SmallCap 600. In the ETF, GameStop ranks 30th. The fund is well positioned for economic growth.…

1 min
where to go in europe

Italy tops the list of international destinations travelers are booking for 2021, according to a survey from the United States Tour Operators Association. Perillo Tours will resume custom tours of Italy after Labor Day (see ItalyVacations.com). You could book a six-night trip split between Rome and Positano on the Amalfi coast, including a private tour of Rome and a private boat ride to the island of Capri. The tour, which also includes accommodations and airfare, starts at about $4,300 per person in September. Price drops in the shoulder season should extend well beyond the Italian borders. As countries reopen, it will be easier to find more deals, says Melanie Lieberman, senior travel editor for The Points Guy. “In the summer, there has been a ton of demand and limited supply,” she…

3 min
retirement planning

Kiplinger’s annual selection of places to retire, starting on page 48, focuses on the fun part of retirement: freedom from the daily grind of work in a new, appealing location. The majority of retirees don’t move when they quit working, but research shows that the wealthier you are, the more likely you are to relocate (or buy a second home and do the snowbird thing). From our own informal research, we know that a significant percentage of Kiplinger’s readers do choose to move in retirement, or have second homes. We figure that even if you plan to stay put, or if you’ve already retired and didn’t move, you’ll enjoy reading about places you could go. New considerations. The pandemic has added a new twist to the calculations. Workers suddenly untethered from the…

3 min
infrastructure flaws

I agree that our infrastructure needs repair, but taxing our grandchildren and great grandchildren is a terrible and wasteful way to do it (“From the Editor,” June). The main reason that Republicans and citizens such as myself are skeptical of another spending bill is that there is no entity on earth that spends money more irresponsibly than the U.S. government. We learned very quickly that a disproportionate amount of the COVID relief bill was never and will never be spent for COVID relief. We also know that the Democrats’ plan to tax only the wealthy is a pipe dream. Raising corporate taxes will force many corporations to take their operations overseas, just as they did under Obama, and thousands of Americans will lose their jobs. Politicians say they won’t raise…