j david stein

David Stein teaches people about money, how it works and how to invest it in his popular podcast, "Money For the Rest of Us." With over 25,000 listens per episode, "Money for the Rest of Us" is Stein's primary platform for teaching thousands of individuals about money, investing and the economy. The show has been featured in Business Insider, Forbes, [...]


Joe Anderson
ABOUT Joseph

As CEO and President, Joe Anderson has created a unique, ambitious business model utilizing advanced service, training, sales, and marketing strategies to grow Pure Financial Advisors into the trustworthy, client-focused company it is today. Pure Financial, a Registered Investment Advisor (RIA), was ranked 15 out of 100 top ETF Power Users by RIA channel (2023), was [...]

Alan Clopine

Alan Clopine is the Executive Chairman of Pure Financial Advisors, LLC (Pure). He has been an executive leader of the Company for over a decade, including CFO, CEO, and Chairman. Alan joined the firm in 2008, about one year after it was established. In his tenure at Pure, the firm has grown from approximately $50 [...]

Published On
November 12, 2016

year-end tax J. David Stein, host of popular podcast “Money for the Rest of Us” joins the show to talk about, you guessed it, money. Joe and Al interview Stein on the state of the markets after the nomination of President-elect Trump.

Stein sheds light on failed market forecasts and how this past week demonstrated two points. 1) You can’t predict future outcomes 2) You especially can’t predict how the markets will react to those outcomes. Joe responds with the importance of ignoring short-term market volatility and instead, focus on your long-term goals when investing.

3:14 “We have two more topics, estate planning and IRAs. One of Trump’s proposals is to get rid of estate taxes.”

3:30 “Right now under current law if you were to pass away, your beneficiaries would receive your assets with no estate tax if your estate is less than about $5.45 million. So if your estate is $10 million and you’re single, well some of that is going to be subject to an estate tax at 40% and some of it will come tax-free.”

4:00 “Donald Trump would like to get rid of estate taxes altogether which is a huge saving for families that have a lot of assets, a lot of wealth, but there’s a negative to that and I want to explain that.”

4:10 “The last time we didn’t have an estate tax was 2010, for one year, and we’ve had the estate tax basically since the Civil Year.”

5:00 “Here’s what’s interesting about estate taxes is because the government doesn’t want to tax an estate twice. There’s an estate tax and then there’s a step-up in basis for the next generation which means that any asset that you hold outside of a retirement account gets a step-up in cost basis to the value at date of death. So you bought a home for $100,000 and now it’s worth $1,000,000 and your kids get the home, because it’s under the exemption limit, it’s as if they bought it for $1,000,000. They turn around and sell it right there and there’s no gain or loss. The reason for the step-up is so you don’t pay estate taxes and capital gains on the same property. Now if there is no estate tax, there may not be a step-up in basis.”

6:20 “Last thing when it comes to estate planning which will affect just about everyone listening is retirement accounts…..right now there is something that’s called the Stretch IRA. What that means is if your IRA goes to a non-spouse beneficiary, they have the right to stretch out the tax liability of that account for their lifetime. Once they inherit it, it’s going to be taxed at ordinary income rates….right now they have the ability to stretch the tax out over their life. So it’s a very favorable tax law for us individuals that inherit retirement accounts.”

8:22 “What is probably going to happen, is what some experts say, first quarter next year – first 100 days, is that the [Stretch IRA] is gone.”

9:46 Start of interview with J. David Stein

11:00 Joe Anderson: “Given this week, we had a lot of experts on their toes a little bit. Donald Trump is now our President…as Donald Trump was pulling ahead, you was the futures go down 700 points so everyone’s thinking, oh man the market is going to crash. The week has been okay. I mean how the heck do we explain that?”

11:25 J. David Stein: “We explain that by saying, you cannot predict these one-off events. I had listeners expressing concern; if Donald Trump gets elected the market is going to crash, should I be pulling my money out? Now this was a month or two ahead of time. My response was, for one-off events you just can’t predict what the reaction is going to be.

12:00 J David Stein: “Now what I teach is to adjust one’s asset allocation for what I call regime changes. Where the risk of a recession is high, the risk of a 20% type decline in the stock market is high.”

12:42: Joe Anderson: “We’re emotional creatures and I think that’s one of the biggest things from an education perspective. It’s that you cannot worry about this short-term volatility. What’s the goal for the money? You probably need it for your retirement over the next 10-20-30-40 years. We’ll have many more presidents, we’ll have many more corrections and we’ll have many more crises and everything else.”

14:15 J David Stein: “My insurance company had a 50% proposed increase for our health insurance. So that got me thinking, what’s going on here? What is driving these dramatic increases in health insurance cost? Turns out, much of it is pharmaceutical.”

15:20 Alan Clopine: “What is some of the best advice you would give to someone who is about to retire?”

15:54 J David Stein: “What I tell retirees is to find a source of income outside of investing. Have a lifestyle business or something of interest.”

17:00 J David Stein: “One can’t even imagine a 40-year retirement, I mean we can’t comprehend what that’s even like.”

19:50 End of interview with J David Stein. Visit moneyfortherestofus.net to hear more from J David Stein