JUST PLAIN TALK: Jane Bryant Quinn an American legend
According to The World Almanac, financial journalist Jane Bryant Quinn is one of America's most influential women. Let me fix it; it should read most influential Americans, full stop. After all, she wrote about personal finance when IRAs and 401K plans were in their infancy.
Quinn criticized Senator Elizabeth Warren's Ultra-Millionaire Tax Act in a recent interview, labeling it "nuts" and correctly noting it "won't go anywhere." Warren's plan includes a 2% annual surtax on net worth over $50 million rising to 3% on net worth over a billion. Quinn argues it is impossible to implement, pointing out it is challenging to accurately measure art, jewelry, and real estate.
Instead, Quinn proposed a transaction tax focused on high-earners. I'm no fan of high-frequency traders. As long as someone putting a hundred bucks a week or so into a 401K or IRA isn't affected, it's worth considering.
Quinn contends we need a surtax for high-earners, a 5% levy on income over $5 million because those are the ones who got "all the big tax breaks under Trump." Quinn argues people should consider immediate annuities, especially conservative investors. Retirees can generate higher monthly income by putting a portion of their bond funds into an immediate annuity. She chastises people for assuming they will be a sucker if they die after buying one.
The way I look at it, you'll be dead; it won't matter. Plus, an immediate annuity can provide survivor income. An immediate annuity reduces the impact variable returns have on portfolio value. But she warns complex annuities linked to stock market returns are definitely for suckers. There's one born every day; make sure it's not you.
She talks about the K-shaped recovery where some people, particularly those invested in stocks and real estate, are doing well while unemployment remains persistently high. She didn't offer any thoughts on how to jumpstart the economy. To me, getting infection rates down will spur job growth, but to borrow a line from Bruce Springsteen, many jobs "ain't comin' back."
One of the best things advisors do is tell people not to panic, a point Quinn echoed. Have an asset allocation where you can ride out a bad market because there will be another one. If you live long enough, you will see several. She gave a big shout-out to fee-only advisors who aren't compensated by any product sales. If an engagement agreement includes a long paragraph about specific types of investments, "you've got a fake fiduciary."
Quinn retired from writing last year after releasing an update of her classic, "How to Make Your Money Last." Now she and her husband live in Rome, and she works on her Italian. She stresses everyone should have a plan; hers includes index funds and retirement goals. Know how much you spend and get professional advice. She did; so should you.
You can't always get what you want, but Buz Livingston, CFP, can help you figure out what you need. For specific advice, visit livingstonfinancial.net or drop by 2050 West County Highway 30A, M1 Suite 230.