Joe Biden or Donald Trump: who will win the election in November 2020? Do elections matter to the stock market? Does it matter whether the president or Congress are Democrat or Republican? If Joe Biden is elected, how might his plans to raise taxes impact your retirement plans? What financial planning and tax planning opportunities, like Roth IRA conversions, can help you election-proof your investment portfolio? In this webinar, Pure Financial Advisors’ Executive Vice President and Director of Research, Brian Perry, CFP®, CFA answers these questions in detail.
05:23 – Who Will Win in November? The Race to 370
08:12 – What About Congress? The Senate is Up for Grabs, Control Has Shifted Back and Forth
11:10 – Do Elections Matter?
- Stock Market Performance in Election Years
- Annualized Returns During Presidential Terms
- Markets Have Rewarded Investors Under a Variety of Presidents
- Hypothetical Growth of $1 Invested in the S&P 500 Index and Party Control of Congress
- Politics vs. Sound Investment Principles: Investing in stocks only under either a Republican or Democratic White House has historically been no match to staying invested through time
16:23 – Would Joe Biden Raise Your Taxes? Joe Biden’s Tax Plan:
- Individual Income Tax Rates
- Qualified Business Income (QBI) Deduction
- Capital Gains
- “Step-Up” in Basis
- Itemized deductions
- The Social Security Earnings Cap
- Real Estate Tax Preferences
- Depreciation of Rental Housing
- Deferral of Capital Gains on 1031 Exchanges
- Tax Deductions for 401(k) Contributions
24:04 – Where Do You Think Taxes Are Headed?
32:44 – Can You Election Proof Your Portfolio?
37:41 – Elections and Financial Planning Opportunities
27:26 – Comment: Deficits and the economic situations to come dictate that taxes will have to go up, no matter who is elected
27:37 – Do you have any current info or insights about the proposed “exit tax” for people moving out of California?
28:20 – Any indication that the backdoor Roth is going away?
28:30 – Do you worry that Bernie Sanders will be very different from the average democrat, and the market will be impacted?
29:50 – Any chance of Roth IRA growth being taxed?
30:02- Good point that market increases as life gets better with new products, etc. With a commitment to global warming and unemployment and homelessness and no world travel. It’s obvious that life and the economy is getting worse and likely to do this for 2 years or more. Doesn’t that mean the market is likely to fall? So get out of the market for a while like the super-rich just did?
32:10 – What would you expect if Kamala Harris becomes president?
48:42 – Do you have to be retired or 72 or older to do a conversion? Or can you do it when you separate from an employer at 50, for example?
50:44 – Can you do a Roth conversion more than once a year? Can we do multiple 401k to IRA rollovers in a 365 day period?
52:13 – Are there special considerations in doing a backdoor Roth conversion if you have a multiple IRAs?
54:01 – In your example of moving from pre-tax to Roth you assumed mutual fund shares, which would save taxes if there was a market drop. What if you are currently out of the market during volatility, and you are in a money market as a temp holding space? Is it still smart to move it?
55:06 – If you convert 401(k) to Roth, do you need to let the money sit in Roth before you spend it? I think Brian said it must sit for 5 years in the Roth?
56:10 – When working you can only invest $7,000 a year in a Roth, doing a Roth conversion, there is no limit?
56:39 – Can you do a Roth conversion from a TD IRA?
58:17 – Regarding timing, even if Joe Biden were elected, the Tax Cuts & Jobs Act tax rates will still be in place until 12/31/2025? Biden couldn’t change that, right?
59:12 – There are ETFs that over the last 10 years have 20% annual growth and 1% fee, and another has 10% growth and 0.01% fee. How to decide on investment selection?
1:00:28 – If your current lifestyle is to spend $120K/year, what is a good planning amount for retirement?
• Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, Inc. A Registered Investment Advisor.
• Pure Financial Advisors Inc. does not offer tax or legal advice. Consult with a tax advisor or attorney regarding specific situations.
• Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
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• Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.