Day: September 10, 2020

California is Leading the Future of America’s Crypto Economy

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cryptocurrency economy

Despite growing support, cryptocurrencies have yet to see mainstream implementation in the US economy. Many people and regulatory agencies are unsure of what to do with crypto, stalling its adoption. California has made some significant strides in this regard recently, setting an example for the rest of the nation.

California is no stranger to embracing change, so its support for a cryptocurrency economy may not come as a surprise. Given its high population, economic status, and cultural significance, it also holds major influence over the rest of the country. As California moves toward legitimizing crypto, the rest of the nation, and even the world, may follow.

Through recent legislation and an independence movement, California is demonstrating how economies and governments can embrace cryptocurrency.

California Legislation Empowers Crypto Companies

On August 13, California’s State Assembly unanimously passed AB-2150, which would clarify crypto’s status as an asset. In California and the rest of the US, the SEC could classify crypto tokens as securities. If written into law, this bill would exempt cryptocurrencies from this classification, giving crypto companies more freedom.

Securities are subject to strict regulation, which has been a problem for some cryptocurrency issuers. Some have had to pay millions of dollars due to these restrictions, which can discourage crypto innovation. In the face of these challenges, companies could potentially give up on pursuing crypto or move to another country.

The US is already experiencing a tech talent shortage, with roughly 1.4 million more openings than applicants. If legal regulations keep driving tech innovators away, this problem will only increase. Legal protections for cryptocurrencies could help keep crypto companies in the US, bringing more money into the economy.

In light of the recent recession from the COVID-19 pandemic, the US needs new ways to bolster the economy. If California’s support for cryptocurrency works well enough, that could be a potential national solution. The US, as a whole, could ensure that laws allow for crypto innovation, leading to new economic opportunities.

Calexit’s Potential Crypto Impact

Since 2014, there has been a movement to make California an independent nation called Calexit. Calexit’s leader, a campaign called Yes, California, recently hired crypto expert Alastair Caithness to see how crypto could serve as the basis for California’s economy. The group believes that a crypto-based economy could give citizens more economic liberty.

If this crypto-based economy works, then it could inspire the US to follow suit. The core concept could serve as inspiration, too, giving other lawmakers the idea to look to crypto to run some economic functions. Since California has the fifth-largest economy in the world, a change like this would not go unnoticed.

Only 32% of Californians supported Calexit as of 2016, but that’s higher than its 20% approval in 2014. Even if California doesn’t secede, it may not abandon the crypto economy concept. The mere fact that such a massive economy considered moving to a crypto-based platform could inspire other legislations.

Cryptocurrency Paves a Way Forward for the Economy

Today’s digital, fast-paced world presents some new economic complications, so traditional solutions may be insufficient. As more of the global economy moves towards digital transactions, internet-native crypto becomes a more appealing resource. Citizens and lawmakers alike in areas like California are starting to wake up to its potential.

As California moves to embrace a cryptocurrency economy, it sets a prominent example for the rest of the US. If these crypto-friendly endeavors turn out to be successful, they could give the world the push it needs to recognize cryptocurrency’s legitimacy. The US is warming up to cryptocurrency, and California is leading the movement.

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The Margin: The U.S. drops to No. 28 on this global well-being index

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So much for America being No. 1 — the United States has dropped to No. 28 in a new report measuring social progress around the world.

In fact, out of 163 countries, only three — the U.S., Brazil and Hungary — have citizens who are worse off now than they were about a decade ago.

This is according to the Social Progress Index, which began measuring the quality of life (independent of economic indicators) across the globe in 2011. It looks at 50 well-being metrics — such as access to health care, education, nutrition, safety, the environment and freedom — to measure quality of life. And America has fallen from 19th place in 2011 to 28th place this year, despite the country’s overall wealth, cultural impact and military power compared with the rest of the planet.

The report reveals a number of troubling disparities in Americans’ quality of life. For example, while the nation ranks No. 1 in the world for its access to advanced education and the quality of its universities, it’s down at No. 91 for its access to quality basic education. U.S. kids get an education roughly on par with children in Uzbekistan and Mongolia, according to the New York Times, which got an advance look at the report before it dropped on Thursday.

And although the U.S. is among world leaders in medical technology, it’s No. 97 in its citizens’ access to quality health care. Indeed, Americans share health statistics similar to those of people living in Chile, Jordan and Albania.

What’s more, the data driving these rankings was taken before the COVID-19 pandemic sickened 6.36 million Americans and killed more than 190,000, put tens of millions out of work, and led more than half of Americans to report experiencing worse mental health. Granted, the coronavirus pandemic has also hurt the quality of life in countries across the globe, which will likely reshuffle the rankings moving forward.

Still, the results put several American stress points into the spotlight. “We are no longer the country we like to think we are,”  a Harvard Business School professor and the chair of the advisory panel for the Social Progress Index told the Times. “It’s like we’re a developing country.”

The U.S. also suffered low marks for having higher homicide and traffic fatality rates, worse sanitation and internet access, as well as discrimination and violence against minorities compared with most other advanced countries.

It should be noted that America’s decline in the Social Progress Index predates the current presidential administration. The report also doesn’t offer explanations for why these shifts have happened. But it certainly led to people on both sides of the political divide pointing figures at who is to blame for the slip in quality of life, and “We’re No. 28” was trending on Twitter on Thursday.

Porter told the Times this report should be seen as a wake-up call. “The data paint an alarming picture of the state of our nation, and we hope it will be a call to action,” he said.

The U.S. was also recently named the second-worst country in the world to raise a family (behind Mexico) according to a recent Asher & Lyric survey of the 35 nations that are part of the Organization for Economic Cooperation and Development. It also barely cracked the top 20 countries for raising kids in the U.S. News & World Report’s Best Countries list released in January.

And America didn’t make the top 10 list of best countries for retirement last fall, either, landing at No. 18 on the Global Retirement Index.

Outside the Box: If you don’t like the results of the presidential election, here’s where you can go

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Let’s fast-forward a few weeks. The Nov. 3 presidential election has occurred, and you know the result.

You’re not happy.

In fact, you’re fed up. You’re so upset that you’re thinking of leaving the United States.

You’re not ready to renounce your citizenship. It’s not like you’re forsaking America forever. You’re just unable to tolerate the next four years—and you want to relocate to preserve your fraying sanity.

So where do you go?

Setting aside the uncertainty of trying to move abroad in a global pandemic, where borders can close quickly and rules change by the day, let’s consider three questions:

• What countries welcome Americans?

• What criteria should you use to decide where to go?

• What hassles might arise?

As a general rule, the more America-like the country, the less it wants Americans.

“It’s more difficult to move to the U.K. or Canada or New Zealand than to Ecuador or Mexico,” said Tim Leffel, author of “A Better Life for Half the Price,” a guide to moving abroad. “Less developed countries are more welcoming to foreigners because we’re not a burden on the system and we inject money into their economies.”

Leffel, a travel writer and blogger, lives in Mexico and loves it. His goal in moving was largely to save money, although he acknowledges that a side benefit “is not hearing cable news blaring 24/7.”

He suggests that disgruntled Americans look to Central and South America as viable options. While you’ll face varying levels of bureaucracy gaining long-term residency in these countries along with possible language barriers, the upsides include low cost of living and relative proximity to the U.S. for return visits.

Attracted to Europe? Many countries in that part of the world set forth restrictive residency requirements and, like Canada, only accept you if you possess what they deem a desired skill or profession.

In Asia, places such as Thailand, Singapore and Indonesia are alluring to adventure-seekers. But aside from language barriers and long travel times to and from the U.S., they impose a range of restrictions on foreigners who intend to stay.

“Malaysia, Cambodia and Vietnam are relatively easy,” Leffel said.

Depending on the country, retirees may qualify for long-term residency after months of back-and-forth paperwork. Some nations, such as Malaysia and Thailand, offer a retirement visa to individuals who meet criteria such as surpassing a certain income threshold (the richer, the better) and passing a medical exam. Expect to pay out-of-pocket for much of your medical care in your new home.

“You can still get Social Security abroad, but you won’t have access to Medicare unless you return to the U.S.,” Leffel said. He pays an American insurer for international health coverage (also called expat health insurance), a high-deductible plan that provides peace of mind in case the 56-year-old needs more advanced medical care.

In researching where to move, it helps to know how various destinations rate in terms of what’s most meaningful to you. A Germany-based firm, InterNations, produces an annual survey of more than 20,000 expats around the world. It analyzes dozens of categories such as finding friends and safety and security. Its Expat Insider 2019 report lists these top 10 destinations:

1) Taiwan

2) Vietnam

3) Portugal

4) Mexico

5) Spain

6) Singapore

7) Bahrain

8) Ecuador

9) Malaysia

10) Czechia

Malte Zeeck, co-founder and co-chief executive of InterNations, says the three biggest concerns expressed by expats are language barriers, distance from home and high cost of living. For retirees, he highlights Ecuador and Costa Rica as popular choices given their friendliness toward foreigners and low expenses.

“What many people wind up missing when they move [abroad] is the socializing and the support network,” Zeeck said. “People don’t want to be alone in a new place.”

At least you won’t miss paying taxes, because U.S. citizens still need to write checks to Uncle Sam while living afar. And that can get messy.

“There’s a perception that if you move overseas, you won’t have to pay [U.S.] taxes,” said Marylouise Serrato, executive director of American Citizens Abroad in Washington, D.C. But even if you become a permanent resident of a foreign country and pay taxes there, your world-wide income remains subject to U.S. federal income tax.

She adds that many financial institutions want to see proof of a U.S. residential address, including utility bills in your name. Using a relative’s address won’t suffice.

“We see problems where individuals hold investment accounts, IRAs and 401(k)s with U.S. financial services companies and then move overseas,” Serrato said. “If you don’t have a residential address in the U.S., the company may freeze your account or ask you to have it liquidated by closing your account, returning your money and forcing you to invest it elsewhere.”

Finally, gird for lifestyle adjustments. Living in a different culture demands a different mind-set.

Leffel chose Guanajuato, a four-drive from Mexico City, for cost savings and quality of life. It also has an international airport where he can get a two-hour nonstop flight to Houston.

“Adaptability is key,” he said. “You might not be able to buy all that you find in the U.S. And the U.S. is the land of convenience. Things take longer here [in Mexico] so you have to chill out and relax.”

Mortgages rates fall to a new record low — but not all Americans will be able to access them

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Mortgage rates have dropped to all-time lows for the ninth time in 2020. But Black Americans could face an uphill battle accessing this historically-cheap home financing.

The 30-year fixed-rate mortgage averaged 2.86% for the week ending Sept. 10, falling 13 basis points from the week prior, Freddie Mac FMCC, -0.72%   reported Thursday. The previous record low was set in early August at 2.88%. In comparison, these loans had an average rate of 3.56% a year ago.

The 15-year fixed-rate mortgage decreased five basis points to an average of 2.37%, while the 5-year Treasury-indexed hybrid adjustable-rate mortgage jumped 18 basis points higher to 3.11% on average.

The decline in the benchmark 30-year mortgage was a reflection of “a late summer slowdown in the economic recovery,” said Sam Khater, chief economist at Freddie Mac. A more tumultuous week in the stock market also affected the rates lenders were offering.

“The 30-year fixed mortgage rate declined due to investors moving away from the steep drop in equity markets and towards the relative safety of bonds,” said George Ratiu, senior economist for Realtor.com.

Also see: Renters in U.S. cannot be evicted through the end of the year due to coronavirus, CDC order states

But many Americans won’t be offered these rock-bottom rates — particularly people of color. A recent LendingTree study found that Black home buyers are more likely to receive a high-cost mortgage to buy a home than the overall population.

High-cost mortgages are loans with an annual percentage rate (APR) higher than the benchmark Average Prime Offer Rate defined by the Federal Financial Institutions Examination Council. The share of Black buyers who receive high-cost home loans was nearly nine percentage points higher than the overall population, LendingTree TREE, +2.27%  found based on an analysis of Home Mortgage Disclosure Act data.

However, all real-estate is local, and in some parts of the country Black Americans are far more likely to be presented with a high-cost loan. In Cleveland, over one in four (26.6%) Black home buyers took out a high-cost mortgage, while the overall share of buyers with high-cost loans was just 9.5%. That represents a difference of 17 percentage points.

LendingTree’s findings match what other researchers have reported about the discrepancies people of color face when they take out home loans. Realtor.com recently reported that home buyers in predominately Black communities were issued mortgages with interest rates that were 13 basis points higher than in white neighborhoods. And a recent analysis of Home Mortgage Disclosure data from Zillow ZG, +2.38%  found that Black mortgage applicants were denied loans at an 80% higher rate than white applicants.

Read more:The Big Move: I’m tired of renting in Manhattan, but love living in New York. Is now the time to buy if the city is supposedly dead?

To be sure, these discrepancies are not necessarily indicative of explicit racial bias on the parts of lending officers and banks. Rather, it’s a reflection of how people of color in the U.S. are often at an economic disadvantage.

Black Americans are more likely to have lower credit scores or have thin credit files than their white peers, which can contribute to a mortgage company offering a higher rate or denying them a loan outright. Plus, the racial gap in earnings makes it harder for people of color to amass the savings needed to make a larger down payment, which can lower the interest rate they are assigned.

“Not all consumers can take advantage of low rates,” Tendayi Kapfidze, chief economist at LendingTree, wrote in the credit comparison website’s report. “Depending on factors like their income, employment history and credit score, the rates that some borrowers receive may be significantly higher than record lows.”

Outside the Box: When my dad died I inherited my uncle’s IRA. How do I figure out the RMD?

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Q: My dad passed away last month. He had Inherited an IRA from my uncle a couple of years ago and was taking out a minimum each year. I have now inherited that account. Is my minimum the same as his or do I have to take a different amount?

— Paul in Baton Rouge

A.: Paul, my condolences on the loss of your father.

Your dad was subject to Required Minimum Distributions (RMD) based on his life expectancy. He was utilizing the “stretch” provisions in the tax code. The SECURE Act passed in late 2019 eliminated the stretch capability for most nonspousal beneficiaries. Spouses, persons less than 10 years younger than the deceased (siblings typically), disabled persons, and minor children can still utilize a stretch IRA.

Prior to the SECURE Act, the rule was you, the inheritor of an Inherited IRA, would continue to be subject to RMD using the same calculation method as your dad, the original inheritor. Since your uncle passed prior to 2020, your dad was able to stretch the distributions. Because you are now inheriting based on a death that occurred after 2019, you fall under the new rules.

Assuming you do not qualify for stretch treatment, you do not need to make any calculations, under the new rules. Distributions are entirely at your discretion except that the entire account must be emptied by the end of the 10th year after the year of your father’s death (2030). Each year, you may take any amount you like at any time or take no distribution at all.

This flexibility can be a blessing or a curse. In most cases, the IRA will hold only pretax dollars making any distributions you take taxable income to you. This creates the temptation to not take any distributions until you absolutely must.

It is nice to be able to pick and choose when to take funds but if you delay taking any distributions until 2030, all of the current balance plus all earnings will have to come out at once, likely bumping you into a higher tax bracket. It may be better to take distributions before the 10-year deadline to spread out the income and pay less taxes.

The rules are the same for Inherited Roth IRAs but the optimal distribution strategy is different. Most people will be better off leaving funds in an Inherited Roth IRA for the full 10 years. This enables the account to continue to grow without any taxation and the larger sum that accumulates over the decade to be taken out tax-free.

Clearly inherited Roth IRAs are more tax friendly to beneficiaries than traditional IRAs. I mention inherited Roth IRAs only as an aside. You cannot convert an Inherited IRA to a Roth account. Conversions to Roth accounts must occur before the original IRA owner’s death.

An additional thought regarding the Inherited IRA is that if you are charitably inclined, you may wish to use the inherited IRA for funding your contributions if you are old enough. At any point after you turn 70½, you can make direct contributions from the inherited IRA to qualified charities via a Qualified Charitable Distribution with no tax consequences.

If you have a question for Dan, please email him with ‘MarketWatch Q&A’ on the subject line.

Dan Moisand is a financial planner with Moisand Fitzgerald Tamayo. His comments are for informational purposes only and are not a substitute for personalized advice. Consult your adviser about what is best for you. Some questions are edited for brevity.

The Moneyist: My fiancé wants me to give up my cushy six-figure job to work at his landscaping company. Should I ask him to pay me a salary?

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Dear Moneyist,

My fiancé has a very successful landscaping company, which is about five years old. I‘ve been in corporate banking for 15 years. My fiancé and I are discussing me quitting my cushy six-figure job and helping him with his business. My question is, can I ask him to pay me a salary?

Right now, he pays all the bills and I put money into a joint savings account for us along with helping with groceries, cleaning lady, etc. Helping him at “the shop“ feels exciting and would be a nice change of pace/scenery. I just want to ensure I am/we are setting this up the best way possible.

We do not have a marriage date set yet (COVID, ugh!) but I prefer to quit my job/career after we are officially married. I just feel it is safer this way? We’re also discussing doing a prenuptial agreement, but I guess that’s another question!

He feels we can easily make more through his business (with my help) than my six-figure job, but I’ve never not had a paycheck. Is it fair that I ask for a salary, or just help him grow the business if he continues to pay for everything? Just thinking down the road if things go sideways, I’ve set myself up fairly to be protected.

Am I over thinking this?

Curious in Missouri

The Moneyist: My sister-in-law moved in with her mother, changed her will, set up a new trust and inherited everything. Is it too late to claim what rightfully belongs to us?

Dear Curious,

Your last question is the easiest answered. No, you are not over thinking this. You are asking all of the right questions, and your concerns (if that’s what they are) are well founded. But before I get to your first question about asking him for a salary, I have a question for you. Do you enjoy your job and the independence that brings? Be very careful about giving up a profession that pays well and one that you have worked hard for and gives you a separate creative, social and intellectual outlet.

It serves two very important purposes in your life: It gives you a separate identity to your husband, financial independence and it splits the financial risk you both share. If people decide they can’t afford landscaping during COVID-19, you will both have your salary to rely on. If your job goes, you will hopefully have your job too. He is clearly very excited about his business, but it’s five years old and it’s important not to allow his excitement (née ego) overwhelm your work life too.

The Moneyist: My mother’s will says her boyfriend can live in her home after she dies. Can I still kick him out if the deed is transferred to me?

Bottom line: Think long and hard about this decision and wait until you are married to make it. Giving up your sole source of income, your job and any future chances of promotion should not be taken before you marry and nor should it be taken before you have agreed on a prenuptial agreement. These are all slices of the same pie. I hope you have the wedding you have always dreamed of if and/or when there is a vaccine available.

But more importantly than that, I hope you have the marriage and the kind of life for yourself you have envisioned for yourself. If you were the one with the landscaping business, would you ask him to give up his six-figure job? That is a question worth asking.

You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com

Hello there, MarketWatchers. Check outthe Moneyist private Facebook FB, +0.94%  group where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

As of Thursday, COVID-19 had infected 27,886,825 people worldwide, which mostly does not account for asymptomatic cases, and killed 904,103. The U.S. still has the world’s highest number of COVID-19 cases (6,362,440), followed by India (4,465,863), Brazil (4,197,889) and Russia (1,042,836), according to data aggregated by Johns Hopkins University.

The Dow Jones Industrial Index DJIA, +1.59%, the S&P 500 SPX, +2.01%   and the Nasdaq Composite COMP, +2.70% closed higher Wednesday. U.S. stocks, particularly in the technology sector, broke a losing run on Wednesday, as the Nasdaq rallied. Doubts about traction for further fiscal stimulus from Washington may be one factor discouraging investors.

Next Avenue: Avoid these common flaws of many retirement plans

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This article is reprinted by permission from NextAvenue.org.

Lots of retirees have regrets about their retirement choices. The primary problem: they were too optimistic about their anticipated retirement benefits, which led to them not saving enough during their working years.

If they could go back in time, they’d have postponed retiring, paid off debts before leaving the workforce and learned more about personal finances.

Those are some of the findings in the recent intriguing study, Subjective Expectations, Social Security Benefits, and the Optimal Path to Retirement, by University of Southern California researchers María J. Prados and Arie Kapteyn, who culled data from more than 4,632 adults.

The USC researchers also found that women were more likely than men to have been overly optimistic about retirement-benefits expectations. As a result, men “are more likely to save more and reach retirement better prepared,” the authors wrote.

And lower-educated people were more likely to be overly optimistic, too.

“What’s concerning about these findings is that the more vulnerable groups (lower-educated people and women) are the ones who seem to be more optimistic about their future retirement benefits,” says Prados, an economist at the Center for Economic and Social Research at USC.

“Being mistaken in this way is costly for these groups because it makes it more difficult for them to realize they need to prepare to be appropriately ready for retirement,” she notes. “Given the complexity of how benefits are determined, it is not surprising to see an educational and socioeconomic gradient in these misperceptions.”

About 20% of the retirees in the survey regretted claiming Social Security benefits as early as they did and 21% said the Social Security benefits they got were substantially different than what they expected; most expected more.

Read: Why you might not know that Trump is threatening your Social Security

Alarmingly, more than 50% of the non-retirees said they don’t have a good estimate of their future Social Security benefits.

It doesn’t have to be that way.

There are a number of things you can do before you retire to avoid making these mistakes. (More on them shortly.)

Part of the gender differences in retirement-benefits expectations are “explained by differences in levels of financial literacy. Improving financial literacy among women would be helpful,” Prados says.

Bolstering the need for more retirement planning knowledge are three other reports released this summer.

A U.S. Government Accountability Office report to the U.S. Senate’s Special Committee on Aging found that all of the 190 women (most over 70) who participated in its focus groups said their lack of personal finance education negatively affected their ability to plan for retirement.

A study called The Four Pillars of the New Retirement, from the AgeWave think tank and the Edward Jones investment firm, surveyed 9,000 people in the U.S. and Canada and uncovered serious ignorance regarding future expenses in retirement. (Full disclosure: I was interviewed for the report.)

“Almost 70% of those who plan to retire in the next 10 years say they have no idea what their health care and long-term care costs will be in retirement,” the study said.

Finally, new research from Morningstar Investment Management, Estimating ‘The End’ of Retirement, found that investors often misestimate their average lifespan, which could have a detrimental effect on their ability to successfully retire.

According to Morningstar MORN, +2.87%  , a retirement period of 30 years (to age 95 or so) is a reasonable assumption for the average 65-year-old heterosexual couple retiring today. But, the authors say, households with higher incomes have longer life expectancies than those with lower incomes, an effect that has been widening in recent years.

Here are five ways to avoid getting big things wrong when planning for retirement:

1. Ratchet up your expected lifespan for planning purposes. “A big issue is forgetting that you may live to be 98 and then starting to run out of money,” says Cindy Hounsell, president of the Washington, D.C.-based Women’s Institute for a Secure Retirement (WISER) and a Next Avenue Influencer In Aging. “People also forget about inflation-increased property taxes, chronic health costs and caregiving out-of-pocket costs.”

To estimate your lifespan, try out the Longevity Illustrator online tool from the American Academy of Actuaries and the Society of Actuaries.

2. Get an estimate of your future Social Security benefit. You can do that by signing up for a free mySocial Security account on the Social Security Administration site. It will give you personalized estimates of your future Social Security retirement benefits based on your earnings history as well as a way to correct any errors in Social Security’s data for your earnings.

“Your statement’s an essential financial planning tool to help estimate income in retirement and figure out how much money you will need to supplement your Social Security benefits to pay bills and future costs,” Hounsell says.

“I like clients to start preparing for retirement at least 10 years out,” Braxton says.

See: Today’s older workers may see the first cuts to Social Security benefits

And, she adds, getting the Social Security benefits estimate will give you a better idea how much you’ll need to save between now and retirement to supplement those benefits.

3. When reviewing your Social Security estimated benefits, learn how much more you could receive by delaying claiming benefits past your Full Retirement Age (which is between 66 and 67 depending on when you were born.) Pushing them back can bump up your benefits by 8% annually, until age 70.

Lazetta Rainey Braxton, the Brooklyn, N.Y.-based co-CEO of the financial planning firm 2050 Wealth Partners, says many people don’t understand that working a little longer to be able to afford delaying Social Security can wind up paying off.

4. Create a retirement lifestyle budget plan. Braxton says, ask yourself: What is your budget? What expenses will you carry into retirement and what new expenses can you expect to incur?

“I like clients to start preparing for retirement at least 10 years out,” Braxton says. “Five years at the minimum.” That way, you can factor in where you’ll want to live in retirement, the cost of living there and your likely streams of retirement income.

5. Women: take an active role in financial planning if you’re not doing so. “The finding from the USC researchers indicating that men are less likely to overstate their retirement benefits than women may also be because of traditional gender roles in many marriages and coupled relationships where men do the financial planning,” Hounsell says.

Thankfully, she notes, “This may be changing as more women are primary breadwinners and have equal financial planning roles.”

For unbiased guidance, look for a fee-only financial planner with the Certified Financial Planner designation. You can find one by visiting sites of The National Association of Personal Financial Advisors, The Financial Planners Association and The Certified Financial Board of Standards.

Watch: What if I’m in my 40s and don’t have a retirement fund?

The three key takeaways from these recent retirement studies, says Hounsell: “Plan for more income than you think you will need; get better informed and retire later.”

Kerry Hannon is the author of “Great Pajama Jobs: Your Complete Guide to Working From Home.” She has covered personal finance, retirement and careers for the New York Times, Forbes, Money, U.S. News & World Report and USA Today, among others. Her website is kerryhannon.com. Follow her on Twitter @kerryhannon.

This article is reprinted by permission from NextAvenue.org, © 2020 Twin Cities Public Television, Inc. All rights reserved.

NerdWallet: If you relocated across state lines, beware of this big tax headache

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This article is reprinted by permission from NerdWallet.

If the pandemic caused you to relocate across state lines, even temporarily, the next surprise could be having to file an extra tax return and potentially pay more taxes.

The issue gained national attention in May, when Gov. Andrew Cuomo of New York said out-of-state health care workers who came to help with the pandemic would face New York income taxes.

Cuomo’s comments generated outrage, but in fact, most states tax people who earn money within their borders, even if those people usually live and file tax returns elsewhere. Even a single day in some states can trigger a tax bill.

Remote working could mean tax hassles

Multistate taxation has long been a headache for entertainers, athletes, professional speakers and others who earn money in more than one state. Snowbirds, retirees who move south for the winter, can face it as well. Now it could be a problem for many people who relocated, however temporarily, because of the pandemic.

Nearly one in 10 young adults, those ages 18 to 29, said they had relocated because of the pandemic, according to a Pew Research Survey poll taken in early June. Overall, 3% of adults said they’d moved and 6% said someone else had moved into their households. Those who moved cited reducing their risk of infection (28%), college campuses closing (23%), wanting to be with family (20%) and job loss or other financial issues (18%).

Also see: Thinking about moving to a state with lower taxes? These are the mistakes to avoid

Changing attitudes about remote work mean that multistate taxation could be an issue for more people and companies in the future. Nearly half of the company leaders surveyed by research firm Gartner in June said they planned to let employees work remotely full time even after people can return to the workplace. Remote working allows people to move to more affordable areas, which could be in a different state. But having even a single employee in another state can raise business and sales taxes for their companies.

A tangle of tax rules

For individuals, double taxation, having to pay taxes in two or more states on the same income, is possible because state rules differ so widely. In most cases, though, the taxpayer’s home state will offer a credit for taxes paid in other states, says Eileen Sherr, senior manager for tax policy and advocacy for the Association of International Certified Professional Accountants.

Also see: How a foreclosure can affect your tax bill

But there are scenarios where someone could end up paying more without technically being taxed twice, Sherr says. If the tax rate in the new location is higher, for example, the home state’s credit may not offset the whole bill. Also, if the person’s home state doesn’t impose an income tax but the other state does, then there’s no credit to offset the additional taxes.

Another issue: failing to file a required state tax return, either because people didn’t know the other state required it or because they’re hoping to get away with it. That can lead to audits, taxes, penalties and amended returns, says Mark Klein, chairman of Hodgson Russ law firm in New York City. Auditors often can figure out where you were when by using cellphone records and credit card receipts.

You can, of course, decide to make your move permanent. But if you change your mind, move back and get audited, the auditors will conclude that you never truly left, Klein says.

“The real test is whether you stick the landing,” Klein says.

What can be done

Some states have longstanding reciprocity agreements, usually with neighboring states, that will prevent commuters from having to file multiple state tax returns, Sherr says. In addition, 13 of the 41 states that tax income have said they would give remote workers a break if they moved because of the coronavirus, she says.

Read more: Fleeing the city for the suburbs? Consider these 5 ways the move could affect your finances

Sherr suggests that people who may be affected by another state’s tax laws talk to a tax pro to assess what their liability might be and discuss the situation with their employer, in case their withholding needs to change. She also recommends people keep good records so they can track how many days they earned money in each state and how much.

It’s possible that Congress could provide some help. A proposal in the Senate’s pandemic relief bill would require that states maintain the pre-pandemic status quo — in other words, pay for newly remote workers would be taxed the way it was before the pandemic. The bill also would create uniform rules for assessing state and local income taxes.

Those ideas may face opposition from states desperate to replace lost revenue, however. The lockdowns quashed economic activity, and the resulting recession has made consumers and businesses cautious about spending money, further reducing tax revenues.

“The states need money,” Klein says. “Because of COVID, they need more money than ever before.”

More from NerdWallet:

Liz Weston is a writer at NerdWallet. Email: lweston@nerdwallet.com. Twitter: @lizweston.

Autotrader: The best midsize luxury SUVs of the year, ranked

This post was originally published on this site

The midsize luxury SUV segment is extremely competitive. This is an area where almost every luxury brand has a seat at the table and they all have different sets of strengths and weaknesses. Some are better off-road, some are all about on-road performance and some are more family-oriented with roomy 3-row seating. Whatever you’re looking for in a midsize luxury SUV, you’ll find something perfect for your wants, your needs and your budget on this list.

Here are the best midsize luxury SUVs for 2020, ranked.

1. Mercedes-Benz GLE-Class

Score: 4.8 / 5

The 2021 Mercedes-AMG GLE 63 S

Mercedes-Benz

Mercedes-Benz has been working on midsize luxury SUVs for quite some time and the all-new 2020 Mercedes-Benz GLE-Class is the closest that the brand has come to truly perfecting this formula.

In classic Mercedes-Benz fashion, the GLE-Class seamlessly combines high-end luxury with engaging performance and in this case, it’s wrapped in a practical and stylish SUV that’s just the right size. The interior is arguably the nicest in this class and it’s packed with the latest technology in both safety and infotainment. One of its few faults is a cramped optional third row of seats.

This SUV makes more sense with the standard 2-row configuration. We admit, sometimes the technology can get in its own way. If you prefer just the basics when it comes to lowering the interior temperature, you might not like the Benz setup here. Still, this is an excellent midsize luxury SUV. It’s a little pricey for this class with a starting MSRP of $54,250, but it’s so good that the price tag is justified. The GLE was on our list of the best cars of 2019. 

2. Audi Q8

Score: 4.8 / 5

When a luxury brand comes out with an “SUV coupe,” it usually means making big compromises on practicality to get a more stylish body. However, the Audi A8 is a sleek SUV with a sloping roofline that also manages to have generous passenger space and plenty of cargo space. Its interior is breathtaking, with a high-end design and quality materials throughout, and its sharp handling makes it feel like a smaller car. All-wheel drive is standard, which improves all-season traction.

Many of us prefer the equally spectacular Q7 but that’s largely a matter of individual taste. The starting price is high at $68,200, but it comes generously equipped with standard features, delivering a truly luxurious experience.

3. BMW X5

Score: 4.8 / 5

The BMW X5 is one of the original midsize luxury SUVs and in 2020, it’s still one of the best. We know it’s cliché to call it “the BMW of SUVs,” but it’s an accurate way to describe this luxurious crossover with agile handling and a powerful engine lineup. A third row of seats is optional, but they’re a bit cramped and we’d recommend a different SUV on this list if you need extra seats.

Where this BMW BMWYY, +1.62%   excels is in the fun-to-drive factor while also serving up practicality with its roomy cargo hold and its intuitive infotainment system. The starting price of $58,900 puts it on the expensive side, but it’s well worth it for the right driver. 

4. Audi Q7

Score: 4.7 / 5

The Audi Q7 is right up there with its chief competitors from BMW and Mercedes-Benz in terms of interior opulence, stately styling and agile handling. The Q7 features standard 3-row seating, but like most of its competitors, space in the third row is quite tiny. The Q7 received a nice mid-cycle refresh for 2020 which includes updated styling, a dual-screen infotainment system, a new mild-hybrid setup for the V6 engine and the debut of the high-performance SQ7 for drivers looking for some extra punch under the hood. Like the Q8, AWD is standard on the Q7. Pricing is a little steep starting at $54,800, but like its other German competitors, it’s worth it for drivers who appreciate the finer things in life.

5. Acura MDX

Score: 4.6 / 5

The 2020 Acura MDX

Acura

The Acura MDX is arguably the strongest value of any SUV on this list with its attractive starting MSRP of $44,500. It’s also a family-friendly choice, with standard 3-row seating that actually has some decent room in the third row. The interior design is getting a little dated and it’s not quite as premium as many of its rivals, but it’s nice considering the price tag.

Don’t miss:The best small luxury cars of the year

The standard V6 engine delivers an excellent balance of performance and fuel economy, but if you’re looking for something even more efficient, there’s a Sport Hybrid variant available which improves both performance and efficiency and throws in standard AWD. The hybrid starts at $52,800, which is still more affordable than many non-hybrid rivals. Find an Acura MDX for sale

6. Volvo XC90

Score: 4.6 / 5

The Volvo XC90

Volvo

In terms of interior quality, the 2020 Volvo XC90 is just as nice as more expensive German rivals while carrying a competitive starting MSRP of $48,350. That price is even more attractive when you consider the long list of standard technology and safety features in this handsome Volvo VLVLY, +2.72%  .

This is a great 3-row luxury crossover for families with its roomy cabin with standard 3-row seating and a generous cargo area to boot. The XC90 gets some slight tweaks for 2020, including revised styling and, finally, available seating for six with second-row captain’s chairs. The base engine is good on gas but a bit lacking in performance and we prefer the T6 powertrain setup. Find a Volvo XC90 for sale

7. Porsche Cayenne

Score: 4.5 / 5

Porsche Cayenne GTS

Porsche

The 2020 Porsche Cayenne is still fresh off a 2019 redesign and introduces a new “coupe” body style for 2020. The Cayenne checks every box you would expect from a Porsche SUV. It’s fast, it’s luxurious and it carries styling that makes it unmistakable as a Porsche.

Check out: 9 smart dog accessories for your car

You could upgrade to one of the hotter available engines, but most drivers will be more than satisfied with the standard turbocharged engine and standard AWD. Unsurprisingly for a Porsche, the Cayenne is toward the top of the price range in this segment with a starting MSRP of $66,800, making it good for drivers to prioritize performance over value. 

8. Lexus RX

Score: 4.5 / 5

The 2020 Lexus RX is a favorite among drivers looking for a midsize luxury SUV that is safe, comfortable, reliable and efficient. There aren’t a lot of surprises with the RX and for many drivers, that’s a good thing. The interior is very nice and the ride is gentle, making it a good commuter with the versatility of an SUV. A third row of seats is available in the form of the RXL, but the optional extra seats don’t offer much legroom. The RX is a great family SUV as long as you don’t really need a third row. Value is the name of the game with a starting MSRP of $44,150, while the thrifty RX Hybrid starts at just $46,245. 

9. Land Rover Range Rover Sport

Score: 4.3 / 5

The Land Rover Range Rover Sport

Land Rover USA

If you’ve always wanted a Range Rover but you also want available three-row seating and a more affordable price, then the 2020 Land Rover Range Rover Sport is the luxury SUV for you. With standard 4-wheel drive, the Range Rover Sport doesn’t skimp on the off-road performance that its name promises, and its range of powerful engines gives it outstanding on-road performance as well.

The interior is comfortable and nicely designed, but the cargo area is a bit tight. Mild-hybrid and plug-in hybrid options were added for 2020, making this SUV a little greener. Base price for a Range Rover Sport is just under $70,000. 

10. Infiniti QX60

Score: 4.2 / 5

Looking for a luxury midsize SUV with third-row seating you can actually use? The 2020 Infiniti QX60 isn’t as opulent or sporty as some of its rivals, but it’s one of the most family-friendly crossovers in this class with a standard third row that is easy to access thanks to sliding second-row seats.

Don’t miss:Four electric and hybrid SUVs that can tow some serious weight

Adding to its family-friendliness is good cargo space, an available rear-seat entertainment system and a coveted Top Safety Pick+ from the Insurance Institute for Highway Safety. The standard V6 is strong and good for family-hauling while also being pretty good on gas. It’s also a strong value, with a starting MSRP of $44,350. Even upgrading to the Luxe AWD model still keeps the price under $50k.

11. Land Rover Range Rover Velar

Score: 4.2 / 5

Sitting above the Evoque and below the Range Rover Sport in the Range Rover lineup is the 2020 Land Rover Range Rover Velar. This 2-row midsize SUV exudes elegance inside and out with posh styling and a composed ride. A new V8 engine making a whopping 550 horsepower joins the Velar lineup for 2020, making this Range Rover more competitive with high-performance German luxury SUVs. Four-wheel drive is standard and its off-road capabilities are better than you might expect for such a fashionable SUV. Its starting price of $56,300 is a bit steep considering some of its more modern German rivals with nicer interiors and similar prices.

12. Lincoln Aviator

Score: 4.1 / 5

The Lincoln Aviator

Lincoln

The roomy 2020 Lincoln Aviator is another family-friendly choice in midsize luxury SUVs with standard 3-row seating. It’s one of the most stylish SUVs in this segment with a gorgeous exterior and a more opulent interior than you might expect. It’s also quite advanced technologically with one of the best infotainment systems in this class.

The ride is comfy and the standard twin-turbo V6 engine pumping out 400 hp is fantastic, but when it comes to handling, some rivals are more agile. It starts at a reasonable $51,100 and the higher-performance Grand Touring plug-in hybrid variant starts at $68,800. The all-new Aviator is the only vehicle from a luxury brand to earn a spot on our Best New Cars for 2020 list. 

13. Maserati Levante

Score: 4.1 / 5

The 2020 Maserati Levante

Maserati USA

Maserati performance and style come in a versatile midsize SUV in the form of the 2020 Maserati Levante. The Levante offers two incredible Ferrari-built engines under the hood, a 345-hp twin-turbo V6 and a 590-hp twin-turbo V8. Think of it like a high-end sport sedan but with an SUV body. The Levante also has sharp handling and it just might have the most satisfying exhaust note of any SUV on this list. However, its $72,990 base price makes the interior quality feel a bit lacking. The Porsche Cayenne is arguably a better value for a performance-oriented midsize luxury SUV. 

See: 10 SUVs that are really fun to drive

14. BMW X6

Score: 4.0 / 5

The BMW X6

BMW USA

All-new for 2020, the BMW X6 has a sleek coupe-like body that looks cool but results in a compromise of practicality. The seats are super-comfortable, but the steep roofline cuts into the cargo area quite a bit while also hurting rear visibility. That said, the cabin is extremely well-designed and full of high-end materials plus a long standard features list. It has a lineup of very strong engines, but as comfortable and as fast as it is, its 6-figure starting MSRP of $108,600 is hard to justify. The BMW X5 M is slightly cheaper, much more practical and delivers 567 hp that you’re unlikely to get bored with. 

15. Cadillac XT5

Score: 4.0 / 5

The Cadillac XT5 is a competitively priced midsize 2-row luxury SUV that takes the fight directly to the Lexus RX but can’t quite match its Japanese rival. The XT5 is a good SUV with a sharp aesthetic, a comfortable ride and a strong predicted reliability rating from J.D. Power. It got some nice updates for 2020 including a new infotainment system, a new turbocharged base engine that is good on gas and a stylish new Sport trim. Where the XT5 is lacking is interior quality and tight back seat headroom for a midsize SUV. It’s attractively priced starting at $44,095, but similarly-priced Japanese luxury SUVs are better buys. 

16. Lincoln Nautilus

Score: 3.9 / 5

The Lincoln Nautilus is another American 2-row luxury SUV that takes a shot at the Lexus RX and makes a good effort but falls a bit short of greatness. It’s a nice, comfortable, practical crossover, but there’s nothing that makes it really stand out in this class.

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In Black Label form, it does eclipse the RX in terms of interior materials, color choices and textures, but that’s nearly a $60,000 car. You do get a host of concierge-level service but it’s a pricey option. Its most competitive factor with the Nautilus is actually at the other end of the spectrum — its price, which starts at $41,040, making this Lincoln a strong value for anyone looking for a comfy, quiet cruiser with SUV versatility. Both available engines are efficient and upgrading to the twin-turbo V6 adds more power, but the handling of the Nautilus isn’t what we’d call athletic. 

Also see: 8 new luxury SUVs for under $50,000

17. Cadillac XT6

Score: 3.9 / 5

The 2020 Cadillac XT6 is an all-new entry in the competitive 3-row luxury crossover segment and fails to stand out compared with the best midsize luxury SUVs. It has a dignified appearance, and its interior is roomy and family-friendly with plenty of room in its standard third row of seats, but that’s about where its virtues end. The sole engine choice is a naturally aspirated V6, which has enough guts for family-hauling duty, but there isn’t much of a fun-to-drive factor here. The interior quality is good but not great, which kind of sums up this whole SUV. This Cadillac is moderately priced starting at $52,695. 

This story originally ran on Autotrader.com.

A reminder as schools reopen — federal law now gives some parents paid time off to help their kids with remote learning

This post was originally published on this site

Last month, a recently-reopened school district near Atlanta, Ga. told more than 1,000 students and staffers they had to quarantine after a coronavirus outbreak.

Earlier this month, approximately 450 students and employees in a central Florida school system needed to isolate after positive COVID-19 cases. Almost 2,000 miles away, around 100 teenagers and staff in a Denver-area school had to do the same because of cases in their school.

Rocky school reopenings are already upending educators’ plans this fall — and they’re likely doing the same thing to the work schedules of many parents who, if they aren’t already working from home, may suddenly need to be there with their quarantined student.

The good news is there’s a range of employee leave laws that could conceivably kick in to protect parents in this situation, separate and apart from an employer’s own paid time off policies. The tricky part, however, is that there’s a complicated mix of rules. And the worrying note, some say, is that the laws don’t do enough to help parents who are trying to make it all work right now.

New federal laws temporarily expanded paid family leave

During the early days of the pandemic, federal lawmakers passed the Families First Coronavirus Response Act (FFCRA). Though America is the only highly industrialized country without a federal paid family leave law, the FFCRA temporarily enabled paid leave for families pulled from work to quarantine, care for others with COVID-19, or care for children who are at home because of closed day cares and schools.

The FFCRA has two important parts: one portion addressing emergency paid sick leave and another portion for expanded family and medical leave.

When it comes to school and child care, the U.S. Department of Labor says covered workers can access up to two weeks (80 hours) of emergency paid sick leave at two-thirds pay. The cap on pay in this time period is $200 daily and $2,000 total, according to the Center for WorkLife Law within the University of California, Hastings College of the Law.

A covered worker (they have to have been on the payroll for at least 30 days) can also tap the law’s expanded family and medical leave for an additional 10 weeks of pay at two-thirds their compensation. In that 10-week period, an employer pays a maximum of $200 a day and up to $10,000 total, the Center for WorkLife Law. Employers ultimately receive a dollar-for-dollar tax credit that covers them for paying the leave.

The law applies to employers with fewer than 500 workers. A small business with fewer than 50 workers can apply for an exemption if it can show the absence of employees would jeopardize its operations and bottom line.

The paid leave provisions are in effect from April 1, 2020, to Dec. 31, 2020.

If a school closes for half a day, parents can get paid time off

The Labor Department weighed in late last month on how the FFCRA fit in with the fall school year.

If a student attends school some days but has distance learning on other days, parents can receive paid leave on the days their child is home.

If a student physically attends school some days, but has distance learning on other days, the department said a parent can get paid leave on the days their child is home. That’s because the school is essentially “closed” to the student for the day in eyes of the law. (If a child is home under a quarantine order, that can justify the parent’s paid leave.)

On the other hand, if a parent chooses all remote learning instead of in-person instruction, they cannot access paid leave under the federal law. The school is not “closed” in that context, the Labor Department said.

If school administrators start the year remotely and say they’ll make a reopening decision at a later date, the school is still closed and the paid leave is still available.

Likewise, a school might be open, albeit for a half day. The FFCRA allows workers to apply for paid leave in bite-sized pieces, like from 2:30 p.m. to 4 p.m.

“You may take intermittent leave in any increment, provided that you and your employer agree,” a Labor Department questionnaire said. “The Department encourages employers and employees to collaborate to achieve flexibility and meet mutual needs.”

State and local laws can support working parents too

Now consider the fact that FFCRA isn’t the only paid leave law out there.

As the pandemic continued, various states and cities have expanded their paid leave laws to incorporate things like school closures. Is it possible to stack the time off, so that a parent could pull paid leave from one law and then turn around and pull from another?

“It depends what law you talking about and what the context is,” said Liz Morris, deputy director of the Center for WorkLife Law. “The bottom line is, it’s extremely complicated the way these laws all interact.”

The center launched a helpline in April to assist workers navigating all the rules out there. “Anybody who has COVID-19 caregiving issue in workplace can call,” Morris said.

The center’s helpline is (415) 851-3308 and its email is: covid19helpline@worklifelaw.org.

Morris’ team has talked to people trying to figure out the leave laws, pregnant women and new mothers who are concerned about being at work and others with health conditions who are worried about returning to work.

There’s a range of federal and state laws, but Morris said they may not be good enough for everyone — especially if they’ve already used up their paid leave under the FFCRA.

‘We’re trying to rely on this patchwork… What we really need is a single comprehensive law that protects everyone.’

— Liz Morris, deputy director of the Center for WorkLife Law at University of California, Hastings College of the Law

“We’re trying to rely on this patchwork of laws to bring together a set of legal rights for people so that they just have a job to return to when this is all over and need income … What we really need is a single comprehensive law that protects everyone.”

Paid time off is important for parents juggling work and school right now, but it’s not everything, said Rich Fuerstenberg, senior partner in the Life, Absence and Disability practice at Mercer, a human resources consulting firm.

For one thing, leave under the FFCRA “is a one-shot deal. Once it’s gone, it’s gone,” he noted.

Going into the fall, Fuerstenberg said the companies he’s been working with have been thinking hard about their work schedule flexibility policies, how they can assist with child care costs and also looking at how much paid time off they are giving staff.

Almost two-thirds (62%) of companies said they were allowing parents to change their work schedules so employees could manage their child’s new school routine this fall, according to a July-August Mercer survey of more than 800 employers.