The word rich gets thrown around all the time but who actually falls into that category? It’s certainly subjective but the government’s definition by directly impact your future taxes. Let’s look at some statistics and get a better idea of how taxes are generated and who is actually paying them.
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Have you built up some savings from the past 12-18 months while the pandemic was going on? For some, this was an incredibly difficult time financially, whereas for others it caused some financial accumulation. What should you do with that pandemic savings you got after not spending as much? Beyond summer travels and activities, we talk about how to strategize.
What should you do with your pandemic savings if you want to invest? First consider: what’s the purpose for this money? And then the time horizon? For instance, if you need the money for a down payment, home improvement, or big trip, you should probably keep the money in a savings account. If you’re saving for college for a child or grandchild with a longer time horizon, you can invest these funds.
Where should you invest? Roth IRAs are a good place to start by investing $6,000 or $7,000 a year, depending on your age and if you are within the income limits. Another option is to do a Roth conversion to take advantage of the historically low tax benefits.
What do you want your money to do? Are you hoping to travel this summer? Gas prices are high and airlines are booking up. Summer travel is definitely up. Supply and demand play a big part in costs. A lot of times inflation can show up in a funny way. Right now, inflation seems to be transitory as we lift the mask mandates and open up more.
Finally, we wrap this episode up by asking Don what always makes his day better. What makes your day better?
Listen to the entire episode or use the timestamps below to skip ahead.
[0:42] – Happy 4th of July!
[1:34] – What should you do with your pandemic savings?
[4:23] – Where should you invest?
[6:09] – What do you want your money to do? Are you planning to travel?
[9:13] – Does Don anticipate a strong third quarter?
[14:06] – What is happening with inflation right now?
[16:10] – Getting to Know Don: What’s one thing that always makes your day better?
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Donald W. Cash – CPA, CFP® is an independent advisor. Don began his career in 1985 as an accountant after graduating Rutgers University. In 1990 he entered the field of Estate Planning with a concentration in long term care planning. Don has been advising clients in the baby boomer and retirement market for 20 years. He has helped over 1,000 families with their planning needs. He advocates a holistic approach to Estate and Financial Planning as has relationships with other professionals including Attorneys, CPA’s, Mortgage Specialists, Insurance Specialists and Asset Managers. Don is married to Cathy and have 4 children, Carly, DJ, Nick and Tori. They live in Freehold, NJ.