By Douglas Eaton
It is that time of year again. The holiday sales are starting, and the financial articles appearing are once again about IRA contributions and “financial New Year’s resolutions.” YAWWNN!
So instead, I wanted to share something from a conference this past week.
Mitch Anthony, a leading resource for financial services professionals, was speaking on ways to prepare clients for longer and longer retirements (as life expectancy increases). He spoke of the Okinawans. Apparently, Okinawa is home to the world’s highest known concentration of centenarians. Research shows that Okinawans not only enjoy one of the world’s longest life expectancies, but a remarkable ability to age successfully and significantly disease free.
According to the Book entitled the “Okinawa Program” (Bradley Wilcox and D. Craig Wilcox), in the Okinawan dialect, there is no word for “retirement.” They have another word, “ikigai”, which translates roughly to “purpose” or “that which makes one’s life worth living.” In other words, they strive for a “return on life.” Rather than acquiring money or possessions, they focused on just one thing: Finding a Purpose.
Yes, they do maintain a healthy lifestyle, but, just as noteworthy is their sense of “go with the flow” adaptability. They don’t rush, and as a result have little stress. My favorite part of their lifestyle is that dancing breaks out spontaneously – not only at parties, but at the end of a long work day.
MY HOPE for you is that you make a resolution to achieve a “return on your life”, as well as a return on your investments. Start by asking yourself, “what inspires me” or “what gives me energy” or even “what makes me dream.”
Invest in your experiences rather than possessions.
…And here are a couple of useful FINANCIAL tips for the year-end:
DEFERRING INCOME:
• Delay year-end bonus, compensation, payments for service, and rents;
• Postpone retirement plan distributions that are not required;
• Hold off on the sale of capital gain property until after January 1st
ACCELERATING DEDUCTIONS:
• Pre-pay deductible interest as well as state payments for property and estimated income taxes;
• Make charitable contributions prior to year-end.
• Be sure to maximize deductible IRA ($5,500 plus an additional $1,000 for those over 50 for 2013; indexed to inflation in subsequent years) and SEP ($51,000 based on eligible compensation) & 401K retirement plan employee salary deferral contributions ($17,500 plus an additional $5,500 for those over 50). Remember an unemployed spouse may also be eligible for the IRA. Read more about it here.
TAX TIPS:
• New mutual fund investments may be best delayed until after year-end distributions have been made. This is because distributions are blindly made to an owner on a given date of record without regard to how long the investment was owned. For example, a 10% capital gain distribution for record owners of December; a December 12th investment of $10,000 could result in a $1,000 taxable capital gain with no mitigating advantage.
• Offsetting realized gains with losses help, as long as the sales do not cause adverse investment results. Keep in mind the 30-day “wash sale” rules, and up to $3,000 of investment tax loss can be applied against income from other sources.
Wishing Health, Happiness and Purpose to you all!
Eaton Financial Group proudly offer pro-bono work to those women who are in distress (such as in the event of a death of a spouse/other family member, abuse, divorce, etc).
Eaton Financial Group is a full service, fee-based financial advisory firm.
They focus on financial planning for the conservative investor.
(954) 575-9323