Friday, July 5, 2024

Highlights of Recent Webinars: Second Quarter Summary


It’s that time again! Every quarter, I like to review and summarize my notes from recent webinars and classes. Below are some interesting tidbits that caught my attention from recent programs:

IRMAA Medicare Premium Surcharges- About 8% of older adults pay income-related monthly adjustment amount (IRMAA), a higher premium paid by Medicare recipients with higher incomes. There are five tiers of IRMAA on a sliding scale and the income ranges for each tier are based on income two years prior. While technically not a tax, IRMAA is a drag on payees’ bottom line.


Brain Fog- People can experience “brain fog” (i.e., forgetfulness and difficulty focusing on tasks and paying attention) when they experience major life transitions such as death of a spouse and financial stress. To not become overwhelmed, experts recommend making three lists of things to do: 1. Now, 2. Soon, and 3. Later.


JOMO- This was new to me. Instead of FOMO (fear of missing out), JOMO is an acronym for “joy of missing out.” In other words, people are happy not indulging in high-cost activities that put a strain on their finances. Instead, they save money and achieve financial independence (FI).


Women’s Finances- The gap between average salaries for men and women can add up to hundreds of thousands of dollars over working years. Five steps for women to take charge of their financial future are: 1. Setting goals, 2. Building an emergency fund, 3. Getting involved in family finances (e.g., net worth and cash flow), 4. Learning about investing, and 5. Saving for retirement.


Tax Diversification- It is risky to put all your retirement savings in tax-deferred accounts (a.k.a., qualified plans) because you don’t know what future tax rates will be when required minimum distributions begin. The highest U.S. tax rate was once 90% for over 20 years. Instead, select multiple investment accounts with different tax structures (e.g., tax-deferred, tax-free, taxable).


“Free” Money- There is truly “free” money and free money with strings attached. Gifts and inheritances are typically 100% free. They are not taxed and typically do not require anything of recipients. On the other hand, employer retirement plan match requires worker savings and credit card rewards and restaurant and retailer rewards programs require consumer spending.


Building Wealth- Where you grew up does not need to stop you from who you want to be. A simple path to wealth is dollar-cost averaging (i.e., investing regular amounts at regular time intervals) into index funds over time. Yes, it is “boring,” but you don’t need to know earnings per share or study corporation balance sheets. The more modestly you live, the easier it is to reach FI.


Generative AI- Data for generative AI (e.g., ChatGPT) is derived from the internet with all of its biases including racism and sexism. As a result, many organizations are creating their own large language models (LLMs). The best way to start using AI is to just get out there and play.

This post provides general personal finance or consumer decision-making information and does not address all the variables that apply to an individual’s unique situation. It does not endorse specific products or services and should not be construed as legal or financial advice. If professional assistance is required, the services of a competent professional should be sought.

No comments:

Post a Comment

Loud Budgeting: A Financial Discipline Strategy

  Have you heard the term “loud budgeting?” It started gaining traction earlier this year on TikTok (where else?) and has been covered by fi...