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Post Election Financial Planning


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Anybody out there doing any trading, estate or retirement planning etc. in advance of the upcoming election?

Went ahead and started moving some money to Roth accounts and have transitioned some out of my everyday brokerage to very diversified mutual funds but curious what others are doing in preparation of potential increased tax rates and dip in the market.

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If Biden’s comments about $400k thresholds on tax increases holds true, I don’t see a reason to ‘move some money to Roth accounts’.  Backfill all you want, if you’re eligible.  But raising the top bracket a few percent won’t effect your ability to fund a Roth account.  Obviously he could change his mind or be lying, but his proposed bracket changes have such a minuscule effect on Roth contribution parameters, I wouldn’t even bother clicking the mouse.  

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5 hours ago, Lobo said:

If Biden’s comments about $400k thresholds on tax increases holds true, I don’t see a reason to ‘move some money to Roth accounts’.  Backfill all you want, if you’re eligible.  But raising the top bracket a few percent won’t effect your ability to fund a Roth account.  Obviously he could change his mind or be lying, but his proposed bracket changes have such a minuscule effect on Roth contribution parameters, I wouldn’t even bother clicking the mouse.  

No doubt that plans are far from determined with tax increases. I’m just thinking maybe it’s not a bad idea to slow down on injecting into the market and maybe waiting until it dips. Just wondered if there were other strategies people are taking.

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1 hour ago, hornbri said:

I think if anything you would have a short term increase and the market would expect a large stimulus package to pass in Jan. If there is a dip it would happen sometime in the spring as tax increases are talked about/voted on. 

This is the correct (short-term) answer. (Assuming Biden’s a clear winner...although if that’s assumed, it’s already priced in.)

long term answer: stocks only go up

https://www.wsj.com/articles/stocks-typically-climb-regardless-of-whos-in-the-white-house-11603445400

 

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What will probably happen is we will see an Estate Planning Attorney Income Enhancement bill.  LOTS of people fall into that range where today, they had no chance of triggering an estate tax liability, but will under the Biden plan. 

There'll be a need for some increased planning back to the early 2000's type of exemption strategies.

Thousands of estates that wouldn't even tickle the 11-22 million exemptions, will be in the cross-hair of something in the 3-8 million range. 

Law dogs will love it.

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3 hours ago, Reagan1k said:

What will probably happen is we will see an Estate Planning Attorney Income Enhancement bill.  LOTS of people fall into that range where today, they had no chance of triggering an estate tax liability, but will under the Biden plan. 

There'll be a need for some increased planning back to the early 2000's type of exemption strategies.

Thousands of estates that wouldn't even tickle the 11-22 million exemptions, will be in the cross-hair of something in the 3-8 million range. 

Law dogs will love it.

Dead people have no lobbyists because they don't vote, except when LBJ runs

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It’s a tossup in my book right now, but I’ll say Trump pulls another upset. He’s got a lead or something very close to a lead in every swing state. Therefore looking at buying more bank stocks or indexes. BAC in particular exploded after Trump got elected in 2016. Doubt they see quite the same bounce this time around though since it’s just a re-election. 
 

But as others have said, stocks will only go up regardless of who wins. Even a dip with a Biden W will be well erased by March/April 2021. And people keep worrying about a Covid correction but I just don’t see it happening. Unemployment numbers are free-falling every week and I don’t see that changing. 

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What will probably happen is we will see an Estate Planning Attorney Income Enhancement bill.  LOTS of people fall into that range where today, they had no chance of triggering an estate tax liability, but will under the Biden plan. 
There'll be a need for some increased planning back to the early 2000's type of exemption strategies.
Thousands of estates that wouldn't even tickle the 11-22 million exemptions, will be in the cross-hair of something in the 3-8 million range. 
Law dogs will love it.

Already seeing it. I work with a few estate attorneys and one sent an email to start considering options. He’s charging $1k for the meeting (where you may or may not need to make changes). I was a little put off by the email because he’s a fantastic atty and his firm has helped a bunch if people I know (including me).
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Just now, kmac30 said:


Already seeing it. I work with a few estate attorneys and one sent an email to start considering options. He’s charging $1k for the meeting (where you may or may not need to make changes). I was a little put off by the email because he’s a fantastic atty and his firm has helped a bunch if people I know (including me).

That email will be followed by one from an agent with an offer to quote on a 2nd to die policy.

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  • 2 months later...

stimulus ? Surly poor here, under $90k married filing jointly.  No stimulus in 21 yet.  Next door neighbor single same income range, received his about a week ago. Another neighbor filing jointly did not receive hers either.  I read something on the IRS website if we don't receive stimulus we are to file electronically and fill out credit form. I don't mind filling out credit form, but I am an old-timer, as in I like to do the taxes myself manually first with a pencil and then I type the info. onto computer, print out, then send to IRS.   It works so well the IRS takes so long to figure out I've sent the info. correctly they have paid me interest on the refund.  I believe that is the six week rule.  I am trying to find out if the IRS can actually force me to file electronically or not.  I don't think so.  

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