Economists say this is the minimum amount of money you need in an emergency fund

Money experts generally encourage you to set aside three to six months’ worth of living expenses in an emergency fund. If you have that much saved, your probability of falling into financial hardship (not being able to pay rent, bills or medical care) is low. They found that if you have very little saved — say $200 to $500 — each additional dollar you set aside dramatically reduces your likelihood of falling into financial hardship. $2,467 is a good ‘minimum savings rule’Most money experts agree


Money experts generally encourage you to set aside three to six months’ worth of living expenses in an emergency fund.
If you have that much saved, your probability of falling into financial hardship (not being able to pay rent, bills or medical care) is low.
They found that if you have very little saved — say $200 to $500 — each additional dollar you set aside dramatically reduces your likelihood of falling into financial hardship.
$2,467 is a good ‘minimum savings rule’Most money experts agree
Economists say this is the minimum amount of money you need in an emergency fund Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-18  Authors: kathleen elkins
Keywords: news, cnbc, companies, fund, money, savings, gallagher, hardship, households, worth, say, really, save, minimum, months, need, emergency, economists, income, financial


Economists say this is the minimum amount of money you need in an emergency fund

Money experts generally encourage you to set aside three to six months’ worth of living expenses in an emergency fund. Some even want you to stash away a year’s worth. After all, life doesn’t usually go as planned: There could be another recession, you could lose your job, have a medical emergency or have to deal with a car breaking down. That’s why, when it comes to emergency savings, “more is always better,” personal finance author David Bach says. But economists Emily Gallagher and Jorge Sabat challenge the oft-cited savings rules in their 2019 report, “Rules of Thumb in Household Savings Decisions.” “People are usually given really high savings thresholds, like you should be saving six months’ worth of income or you should have $15,000 squirreled away,” Gallagher tells CNBC Make It. But those numbers aren’t “based on much,” she adds. After crunching the numbers, Gallagher and Sabat found a more realistic amount for low-income households, specifically, to aim for: $2,467. If you have that much saved, your probability of falling into financial hardship (not being able to pay rent, bills or medical care) is low.

To get to that number, Gallagher and Sabat, who are also assistant professors of finance, used data from the Survey of Income and Program Participation (SIPP) to graph the relationship between falling into hardship in the next six months and how much you have saved as a buffer. They looked at financial information on more than 70,000 lower-income households, which the report defines as those earning under 200% of the poverty line. To put that into context, that’s up to about $30,000 a year for a family of four, says Gallagher. This group represents “about 30% of the U.S. working-age population,” she adds. They found that if you have very little saved — say $200 to $500 — each additional dollar you set aside dramatically reduces your likelihood of falling into financial hardship. But once you have at least $2,467, “all of a sudden, saving an additional dollar didn’t seem to be that helpful anymore,” says Gallagher. “It still reduced your probability of falling into hardship a little bit, but it wasn’t nearly as effective as when you were at low levels of savings.”

$2,467 is a good ‘minimum savings rule’

Most money experts agree that the more you can save, the better off you’ll be. “We’re not saying that $2,467 is the optimal savings level,” Gallagher emphasizes. “Our results don’t speak at all to achieving longer term financial goals, like paying for college or affording a house.” Especially if you’re planning ahead for bigger expenses in the future, you’ll want to aim to save much more. For people who struggle to set aside a portion of their income, though, $2,467 represents a good “minimum savings rule that you should be working toward,” says Gallagher. “Our data doesn’t speak to middle- or higher-income people, but if this rule works for lower-income people, it should also work for middle- and higher-income people,” she adds. It’s more important, though, for low-income households to build a buffer. “If middle- and higher-income people get hit with a major expense shock, like a car repair that costs $2,000, they might have enough discretionary income coming in that they could use to absorb the shock,” Gallagher says. “The problem for lower income people is that the majority of their income needs to cover everyday expenses. They don’t have much discretionary income to work with and that’s why having a savings buffer becomes particularly important.”

Why the data matters

“The basic genesis of this research came from looking around at the types of financial advice that people are given about how much to save,” says Gallagher. “Households are given really lofty savings goals. If you’re only making $25,000, someone telling you that you have to save six months’ worth of income is really hard.” Even if you’re making more than $25,000, building a substantial rainy day fund is difficult. In fact, nearly half of U.S. households can’t cover a $400 unexpected expense. “Our concern was that giving people really lofty savings goals might actually be discouraging them from saving,” Gallagher adds.

There’s something about getting close to achieving a goal that often makes people work harder. Emily Gallagher Economist and assistant professor of finance at University of Colorado at Boulder


Company: cnbc, Activity: cnbc, Date: 2019-10-18  Authors: kathleen elkins
Keywords: news, cnbc, companies, fund, money, savings, gallagher, hardship, households, worth, say, really, save, minimum, months, need, emergency, economists, income, financial


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Annuity options may be coming to your 401(k). Here’s why

While companies already can offer annuities in their 401(k) lineups, just 9% do, according to the Plan Sponsor Council of America. The Secure Act aims to eliminate companies’ fear of legal liability if the annuity provider collapses or otherwise fails to deliver. For people who worry about outliving their assets, an annuity can help ensure that their savings will last their lifetime. An annuity serves as guardrails for your principal at the same time it provides guaranteed life income. These ten


While companies already can offer annuities in their 401(k) lineups, just 9% do, according to the Plan Sponsor Council of America.
The Secure Act aims to eliminate companies’ fear of legal liability if the annuity provider collapses or otherwise fails to deliver.
For people who worry about outliving their assets, an annuity can help ensure that their savings will last their lifetime.
An annuity serves as guardrails for your principal at the same time it provides guaranteed life income.
These ten
Annuity options may be coming to your 401(k). Here’s why Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-17  Authors: sarah obrien
Keywords: news, cnbc, companies, principal, heres, retirement, 401k, money, income, age, annuities, return, coming, guaranteed, plan, options, annuity


Annuity options may be coming to your 401(k). Here's why

If retirement legislation now under consideration in Congress becomes law, your 401(k) plan might have a new look. The Secure Act, which passed the House in May and awaits Senate action, includes a provision that would make it easier for companies to include annuities in their retirement plans. And while people may be drawn to these guaranteed-income options, it’s important to grasp both the pros and cons before putting any money into one. “As with any investment, It’s important to understand how it works, what it costs and how it fits into your overall financial plan,” said Frank O’Connor, vice president of research for the Insured Retirement Institute.

designer491 | iStock | Getty Images

The Secure Act — whose main goal is to expand access to retirement savings — has idled in the Senate despite bipartisan support. A handful of Republican senators sent a letter to Senate Leader Mitch McConnell, R-Ky., this week, urging consideration of the wide-ranging bill as soon as possible. However, it remains uncertain when that might happen. For people interested in ensuring they receive lifetime income from their savings, the provision relating to annuities may be of particular interest. While companies already can offer annuities in their 401(k) lineups, just 9% do, according to the Plan Sponsor Council of America. The Secure Act aims to eliminate companies’ fear of legal liability if the annuity provider collapses or otherwise fails to deliver.

Although an annuity might include an investment component, it’s essentially a contract: You hand over your money — either all at once or through regular contributions — and the provider (typically an insurance company) promises to provide regular payments to you across many years. Sometimes, that can be decades. A man reaching age 65 can expect to live, on average, until age 84, according to the Social Security Administration. For a woman, the average is 86.5. About a third of all 65-year-olds today will live past age 90, with about 1 in 7 living beyond age 95. For people who worry about outliving their assets, an annuity can help ensure that their savings will last their lifetime. Yet they can be tricky to understand and often are more expensive than other choices for where to keep your money.

An annuity serves as guardrails for your principal at the same time it provides guaranteed life income. Frank O’Connor Vice president of research for the Insured Retirement Institute

“An annuity serves as guardrails for your principal at the same time it provides guaranteed life income,” O’Connor said. “But, it comes with a cost. There are fees that options without an income guarantee don’t have.” Nevertheless, annuities can make sense for some people. “If someone decides to get an annuity, they’re doing it because they either need guaranteed income for life or they need peace of mind,” said certified financial planner Malik Lee, managing principal of Felton & Peel Wealth Management in Atlanta. “But you should want a fiduciary on your side to help you navigate them.” Although annuities can vary widely — both in terms of cost and particular guarantees — there are some broad commonalities. For instance, once you hand your money over to the insurer offering the annuity, it can be costly to change your mind after a short initial review period. Depending on the contract, you could pay what’s called a surrender charge after that window if you no longer want the annuity or withdraw more from it than allowed. That fee can be pretty steep, especially in the early years of the contract. By way of example: An eight-year surrender period might come with an 8% charge in the first year that gradually decreases before reaching 1% in year eight. More from Personal Finance:

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Fewer women now pay their credit card balances in full Also, it’s important to know that if you take money out of an annuity before age 59½, you’ll pay a 10% tax penalty, just as you would for any early withdrawals from 401(k) plans and traditional individual retirement accounts. Otherwise, the annuity payments made to you are taxed as regular income, assuming you haven’t yet paid any taxes on the money you used to purchase the contract. (If you use after-tax money, only the interest or earnings portion of your payment is taxed.) Annuities can be immediate, which involves starting the income stream right away. Others are deferred, in which case at some future date you can annuitize — meaning you agree to receive a periodic amount — for a set time period or for the rest of your life. Both immediate and deferred annuities can be fixed or variable. A fixed annuity gives you a guaranteed rate of return on your principal.

An annuity can make sense within a financial plan, but outside of that it’s just a product. Bryan Bibbo Advisor with the JL Smith Group

“If interest rates go down, these contracts have a minimum guaranteed minimum interest rate,” said Bryan Bibbo, an advisor with the JL Smith Group in Avon, Ohio. “But if rates go up, yours won’t.” Variable annuities are the other main type. These tend to be the priciest of the annuity options, with the average annual cost around 3% of your account. That amount includes the price of riders that consumers often buy — such as a death benefit for heirs if you pass away before depleting your annuity or coverage for long-term care. By comparison, actively managed mutual fund fees average below 1% yearly. Index mutual funds and exchange traded funds generally have even lower fees. Remember that the yearly amount you pay for any investment reduces your return. When you buy a variable annuity, you choose from a menu of underlying funds, which generally are invested in stocks or bonds, or a mix of the two. This means the value of your investment will fluctuate with the performance of those funds.

Meanwhile, indexed annuities are a hybrid of sorts. While the earnings are based on a stock index — say, the S&P 500 — you only get a share of that index’s performance. That could be anywhere from 10% to 60% of the index’s return, Bibbo said. Additionally, indexed annuities typically come with caps on their return. In other words, if the cap is 3%, that’s what you’ll earn even if the index rose 10%. There also are other fees that can eat into returns, depending on how the annuity is structured. “The biggest plus is protection of your principal,” Bibbo said.

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Company: cnbc, Activity: cnbc, Date: 2019-10-17  Authors: sarah obrien
Keywords: news, cnbc, companies, principal, heres, retirement, 401k, money, income, age, annuities, return, coming, guaranteed, plan, options, annuity


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Elizabeth Warren’s real ‘beef with billionaires’

Aside from launching countless beef memes on social media, Warren’s comments laid bare the division in the Democratic party over how to tax the wealthy. O’Rourke, former Vice President Joe Biden and Sen. Amy Klobuchar want modest increases or changes in income tax rates, essentially preserving the basic tax code. We need a wealth tax in order to make investments in the next generation.” So far there is broad public support for Warren’s wealth tax plan. Polls show that at least 60% of Americans s


Aside from launching countless beef memes on social media, Warren’s comments laid bare the division in the Democratic party over how to tax the wealthy.
O’Rourke, former Vice President Joe Biden and Sen. Amy Klobuchar want modest increases or changes in income tax rates, essentially preserving the basic tax code.
We need a wealth tax in order to make investments in the next generation.”
So far there is broad public support for Warren’s wealth tax plan.
Polls show that at least 60% of Americans s
Elizabeth Warren’s real ‘beef with billionaires’ Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-16  Authors: robert frank
Keywords: news, cnbc, companies, beef, elizabeth, wealthy, tax, pay, billionaires, income, built, america, warrens, real, warren, wealth


Elizabeth Warren's real 'beef with billionaires'

Sen. Elizabeth Warren (D-MA) speaks during the Democratic Presidential Debate at Otterbein University on October 15, 2019 in Westerville, Ohio. A record 12 presidential hopefuls are participating in the debate hosted by CNN and The New York Times.

Sen. Elizabeth Warren may have a new slogan: “Where’s the beef?”

During Tuesday’s Democratic debate, Warren had a quick response to a statement from Beto O’Rourke. The former Texas congressman said Warren was being “punitive” of the wealthy in her tax plan and rhetoric.

“I’m really shocked at the notion that anyone things I’m punitive,” she said. “Look I don’t have a beef with billionaires.”

Warren then proceeded to explain her beef with billionaires – that they owe much of their success to the rest of America and need to hand over more of their accumulated fortunes to the Internal Revenue Service.

“My problem is you made a fortune in America – you had a great idea, you got out there and worked for it – good for you,” she said. “But you built that fortune in America, I guarantee, you built it in part using workers all of us helped educate. You built it getting your goods to market on roads and bridges all of us helped pay for. You built it, at least in part, protected by police and firefighters all of us help pay the salaries for.”

She added that her wealth tax of 2% on wealth over $50 million and 3% on wealth over $1 billion was a small price for the super rich to pay for lifting up the rest of America.

The 1%, she said just has to pitch in “two cents so every other kid in America has a chance to make it.”

Aside from launching countless beef memes on social media, Warren’s comments laid bare the division in the Democratic party over how to tax the wealthy. O’Rourke, former Vice President Joe Biden and Sen. Amy Klobuchar want modest increases or changes in income tax rates, essentially preserving the basic tax code.

Warren, by contrast, wants to overhaul the tax system with a wealth tax that would take $200 billion a year from the rich by imposing an annual tax on accumulated wealth rather than income. The old system of taxing income is no longer working, she argued, as the wealthy pile up ever more wealth without paying taxes on their asset gains. Her real beef, it seems, is not so much with billionaires but with the tax system that gives preferential treatment – through the lower-capital gains tax and other provisions – to entrepreneurs, executives and investors who make money from money rather than wages.

“Taxing income is not going to get you where you need to be the way taxing wealth does,” Warren said. “The rich are not like you and me. The really, really billionaires (sic) are making their money off their accumulated wealth, and it just keeps growing. We need a wealth tax in order to make investments in the next generation.”

So far there is broad public support for Warren’s wealth tax plan. Polls show that at least 60% of Americans support a tax on wealth, which may not be surprising since only about 75,000 families in the U.S. have enough wealth to be subject to Warren’s wealth tax. And there is no denying that the wealth of the wealthy has soared over the past decade, as many Americans have struggled with modest wage gains.

America’s billionaires had a collective net worth of about $3 trillion in 2019, more than doubling over the past decade, according to Forbes.

The question for Democrats and voters heading into the spring will be just how much the wealthy and those billionaires should pay – and how they should pay it.


Company: cnbc, Activity: cnbc, Date: 2019-10-16  Authors: robert frank
Keywords: news, cnbc, companies, beef, elizabeth, wealthy, tax, pay, billionaires, income, built, america, warrens, real, warren, wealth


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Couples weigh ‘strategic divorce’ to save on taxes

Elizabeth Warren and Bernie Sanders are stirring up chatter around so-called strategic divorce to avoid the levy. The marriage penalty — that is, a higher tax liability after a high-income couple files jointly — kicks in for taxpayers with taxable income in the 37% tax bracket. These are joint filers with at least $612,350 in taxable income during 2019. Why a strategic divorceGetty ImageThere are a handful of situations, especially for those who are not mega-rich, why a couple might want to divo


Elizabeth Warren and Bernie Sanders are stirring up chatter around so-called strategic divorce to avoid the levy.
The marriage penalty — that is, a higher tax liability after a high-income couple files jointly — kicks in for taxpayers with taxable income in the 37% tax bracket.
These are joint filers with at least $612,350 in taxable income during 2019.
Why a strategic divorceGetty ImageThere are a handful of situations, especially for those who are not mega-rich, why a couple might want to divo
Couples weigh ‘strategic divorce’ to save on taxes Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-16  Authors: darla mercado
Keywords: news, cnbc, companies, save, couple, taxable, split, tax, assets, spouse, financial, income, weigh, couples, strategic, divorce, retirement, taxes


Couples weigh 'strategic divorce' to save on taxes

Peter Dazeley | Photographer’s Choice | Getty Images

Here’s an awkward question for your spouse: Would you be willing to get divorced to save a few dollars? Proposed wealth taxes from presidential candidates Sens. Elizabeth Warren and Bernie Sanders are stirring up chatter around so-called strategic divorce to avoid the levy. The Tax Cuts and Jobs Act, which went into effect in 2018, has also spurred similar discussion among the highest earners, as the new law still subjects them to the so-called marriage penalty. The marriage penalty — that is, a higher tax liability after a high-income couple files jointly — kicks in for taxpayers with taxable income in the 37% tax bracket. These are joint filers with at least $612,350 in taxable income during 2019. In that case, you might be better off being single, at least in the eyes of the IRS. While breaking up might make sense on paper, financial advisors warn that the move could have unexpected ramifications that will dent couples’ financial security. “It’s the unforeseen consequences of these things that surprise people,” said CPA and certified financial planner Tim Steffen in Milwaukee. “We’re talking about the financial side, but you have the social aspect of it, too.”

Why a strategic divorce

Getty Image

There are a handful of situations, especially for those who are not mega-rich, why a couple might want to divorce on paper. For instance, an ailing spouse in need of nursing home care might have too much in assets to qualify for Medicaid. “The couple has a choice, where they can slowly draw down their assets, exhaust their retirement accounts and pay down the bills,” said Stacy Francis, a CFP and founder of Francis Financial in New York. “Or they can get a divorce that will allow the sick partner to have assets that are so low they can potentially qualify for Medicaid,” she said.

Even if it’s on amicable terms, are you going to do something that gives away your control of that business from a voting power perspective when you get divorced? Jeffrey Levine CPA and director of financial planning at BluePrint Wealth Alliance

Another reason why spouses might split is to help a child qualify for financial aid. That’s because the custodial parent is the one who is responsible for filling out the Free Application for Federal Student Aid “If that custodial parent has the lower income and lower assets, you could walk away with more federal aid for college than you would as a married couple,” said Francis. Finally, another possible upside of splitting: Assuming both partners are high earners, such that their taxable income is in the 37% tax bracket, the two might end up in lower brackets if they aren’t married. A couple filing jointly with income of $1 million – each spouse earning $500,000 — would pay nearly $900 more in taxes, compared to what they’d owe if each partner were single, according to the Tax Foundation.

What’s at stake

Splitting up might fix one problem, but it may trip up plenty of financial landmines. Here are a few. Your retirement benefits. A breadwinner who has access to a defined benefit pension might have access to joint and survivor benefits — an income payout to his or her spouse upon retirement. In a divorce, both parties will have to decide how to split the pension, as it may be considered a marital asset. A qualified domestic relations order details the way retirement benefits are to be split. Further, if a couple splits up, the non-working spouse loses the advantage of getting contributions to his or her spousal individual retirement account and spousal Roth IRA. Currently, a working spouse can put away up to $6,000 in an IRA for a non-working spouse, plus $1,000 if he or she is 50 or older. The two must file jointly and be married. Here’s another surprise: Spouses are generally the automatic beneficiary for a 401(k) plan; they need to sign a waiver in order allow someone else to receive those funds.


Company: cnbc, Activity: cnbc, Date: 2019-10-16  Authors: darla mercado
Keywords: news, cnbc, companies, save, couple, taxable, split, tax, assets, spouse, financial, income, weigh, couples, strategic, divorce, retirement, taxes


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Britain’s best known stockpicker forced to shut down embattled flagship fund

The U.K.’s most famous fund manager has been forced to wind up his flagship fund after a months-long suspension. In a letter to investors Tuesday morning, the administrators of the Woodford Equity Income Fund, run by star manager Neil Woodford, said the fund would be closed down and cash returned to investors at the earliest opportunity. The letter from administrators Link Fund Solutions (LFS) said the decision came after a careful review of the fund and its holdings. In a statement, Woodford sa


The U.K.’s most famous fund manager has been forced to wind up his flagship fund after a months-long suspension. In a letter to investors Tuesday morning, the administrators of the Woodford Equity Income Fund, run by star manager Neil Woodford, said the fund would be closed down and cash returned to investors at the earliest opportunity. The letter from administrators Link Fund Solutions (LFS) said the decision came after a careful review of the fund and its holdings. In a statement, Woodford sa
Britain’s best known stockpicker forced to shut down embattled flagship fund Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-15  Authors: elliot smith
Keywords: news, cnbc, companies, income, britains, run, billion, returned, shut, forced, flagship, equity, manager, stockpicker, lost, investors, fund, best, known, woodford, embattled


Britain's best known stockpicker forced to shut down embattled flagship fund

The U.K.’s most famous fund manager has been forced to wind up his flagship fund after a months-long suspension.

In a letter to investors Tuesday morning, the administrators of the Woodford Equity Income Fund, run by star manager Neil Woodford, said the fund would be closed down and cash returned to investors at the earliest opportunity.

Woodford has also been removed as the investment manager, with the fund set to be renamed.

The letter from administrators Link Fund Solutions (LFS) said the decision came after a careful review of the fund and its holdings.

In a statement, Woodford said: “This was Link’s decision and one I cannot accept, nor believe is in the long-term interests of LF Woodford Equity Income fund investors.”

The Woodford Equity Income Fund was suspended in June following a run of poor performance and a sharp increase in investor redemptions which took it from £10.2 billion ($12.9 billion) of assets under management at its peak to just £3.7 billion by the end of May 2019.

Woodford Equity Income has returned a 35.9% loss to investors over three years, while the Patient Capital investment trust he also runs has lost 59.21% over the same period. His smaller Income Focus fund has lost 20% over the past 12 months.


Company: cnbc, Activity: cnbc, Date: 2019-10-15  Authors: elliot smith
Keywords: news, cnbc, companies, income, britains, run, billion, returned, shut, forced, flagship, equity, manager, stockpicker, lost, investors, fund, best, known, woodford, embattled


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Billionaire Marc Benioff: Capitalism has ‘led to horrifying inequality’ and must be fixed

Marc Benioff co-founded cloud software company Salesforce in 1999, and as a result of the company’s success, the 55-year-old is worth $6.3 billion, according to Forbes. But even as Benioff benefits from capitalism, he criticizes the “horrifying inequality” America’s economic system has manifested in an op-ed in The New York Times on Monday. “But capitalism as it has been practiced in recent decades — with its obsession on maximizing profits for shareholders — has also led to horrifying inequalit


Marc Benioff co-founded cloud software company Salesforce in 1999, and as a result of the company’s success, the 55-year-old is worth $6.3 billion, according to Forbes. But even as Benioff benefits from capitalism, he criticizes the “horrifying inequality” America’s economic system has manifested in an op-ed in The New York Times on Monday. “But capitalism as it has been practiced in recent decades — with its obsession on maximizing profits for shareholders — has also led to horrifying inequalit
Billionaire Marc Benioff: Capitalism has ‘led to horrifying inequality’ and must be fixed Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-14  Authors: catherine clifford
Keywords: news, cnbc, companies, capitalism, fixed, wealth, inequality, according, taxes, billion, world, income, billionaire, led, benioff, dalio, marc, buffett, horrifying


Billionaire Marc Benioff: Capitalism has 'led to horrifying inequality' and must be fixed

Marc Benioff co-founded cloud software company Salesforce in 1999, and as a result of the company’s success, the 55-year-old is worth $6.3 billion, according to Forbes.

But even as Benioff benefits from capitalism, he criticizes the “horrifying inequality” America’s economic system has manifested in an op-ed in The New York Times on Monday.

“Capitalism, I acknowledge, has been good to me,” Benioff writes. “But capitalism as it has been practiced in recent decades — with its obsession on maximizing profits for shareholders — has also led to horrifying inequality.”

The piece calls for a “new capitalism,” which, among other things, would include higher taxes on America’s richest, including himself.

“Nationally, increasing taxes on high-income individuals like myself would help generate the trillions of dollars that we desperately need to improve education and health care and fight climate change,” he writes.

Benioff also calls on company leaders to be more mindful of their total impact on society.

“First, business leaders need to embrace a broader vision of their responsibilities by looking beyond shareholder return and also measuring their stakeholder return,” Benioff says. “This requires that they focus not only on their shareholders, but also on all of their stakeholders — their employees, customers, communities and the planet.”

(Not everyone agrees. In response to Benioff’s op ed, Anand Giridharadas, author of “Winners Take All: The Elite Charade of Changing the World,” tweeted Monday, “…I don’t trust business to behave better voluntarily, any more than I trust cats with mice care,” adding that he supports raising taxes on the wealthy. “The best way to get business to behave better is to drastically reduce business’s power,” Giridharadas tweeted.)

In 2018, 26 people had the same wealth as the 3.8 billion people who make up the poorest half of humanity, according to a January report from Oxfam. Additionally, the wealth of the global population of billionaires increased by $900 billion in the last year alone and the wealth of the poorest fell by 11%, Oxfam says.

In the United States, the Gini index showed an increased concentration of wealth too. The Gini index is “a standard economic measure of income inequality,” according to the United States Census Bureau, in which a score of 0.0 indicates “perfect equality in income distribution” and a 1.0 “indicates total inequality, where one household has all of the income.” In 2018, the Gini index for the U.S. was 0.485, according to September’s American Community Survey. That’s up from 0.482 in 2017.

Benioff joins other billionaires who have taken a stand against income inequality.

Ray Dalio — who founded Bridgewater Associates out of his two-bedroom apartment in New York City in 1975 and grew it into the largest hedge fund in the world — is currently worth almost $19 billion, according to Forbes.

Still, “the American dream is lost,” Dalio told CBS’ “60 Minutes” in July, and he said that capitalism needs to be reformed.

“We’re at a juncture. We can do it together, or we will do it in conflict, that there will be a conflict between the rich and the poor,” Dalio said.

Warren Buffett, the third richest person in the world with a fortune worth $82 billion, according to Forbes, does not want to disrupt the productivity of capitalism, which he likens to the “the goose that lays the golden eggs.” Instead, Buffett suggests the country ought to better distribute resources (through taxes, for example) to take care of those who don’t have enough.

“The real problem, in my view, is — this has been — the prosperity has been unbelievable for the extremely rich people,” Buffett said on PBS Newshour in 2017. “This has been a prosperity that’s been disproportionately rewarding to the people on top.”

And Microsoft co-founder Bill Gates, currently the second richest person in the world with more than $105 billion to his name according to Forbes, says capitalism has been effective in generating output, but the wealthiest, like him, ought to be taxed more.

“As you go about doing this additional collection, of course you want to be progressive. You want the portion that comes from the top 1% or top 20% to be much higher,” Gates told CNN’s Fareed Zakaria in February.

See also:

Hedge fund billionaire Ray Dalio: ‘Capitalism basically is not working for the majority of people’

Bill Gates: Taxes on rich should be ‘much higher’ but capitalism still works — here’s why

Billionaire Warren Buffett: ‘I don’t need a tax cut’ in a society with so much inequality


Company: cnbc, Activity: cnbc, Date: 2019-10-14  Authors: catherine clifford
Keywords: news, cnbc, companies, capitalism, fixed, wealth, inequality, according, taxes, billion, world, income, billionaire, led, benioff, dalio, marc, buffett, horrifying


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This map shows the US cities with the greatest income inequality

Unsurprisingly, the Fed finds that the most unequal places in the country are large urban areas, while the least unequal places are concentrated in the Rust Belt, which includes Michigan, Ohio and Pennsylvania. , earned 8.7 times as much as those in the 10th percentile, the most unequal wage distribution on the list. , workers in the top 90th percentile earned seven times as much as those in the 10th percentile. Workers in the top 90th percentile in St. Louis earned 5.3 times as much as those in


Unsurprisingly, the Fed finds that the most unequal places in the country are large urban areas, while the least unequal places are concentrated in the Rust Belt, which includes Michigan, Ohio and Pennsylvania. , earned 8.7 times as much as those in the 10th percentile, the most unequal wage distribution on the list. , workers in the top 90th percentile earned seven times as much as those in the 10th percentile. Workers in the top 90th percentile in St. Louis earned 5.3 times as much as those in
This map shows the US cities with the greatest income inequality Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-09  Authors: alicia adamczyk
Keywords: news, cnbc, companies, cities, times, income, distribution, workers, places, inequality, map, 90th, wage, 10th, earned, shows, unequal, greatest, percentile


This map shows the US cities with the greatest income inequality

Income inequality is greater on the coasts and in the South than it is in the Midwest, according to a new report from the New York Federal Reserve.

Using data from the U.S. Census Bureau, the report looks at the ratio of earnings for those in the 90th percentile of wage distribution compared to the 10th percentile in cities around the country. Unsurprisingly, the Fed finds that the most unequal places in the country are large urban areas, while the least unequal places are concentrated in the Rust Belt, which includes Michigan, Ohio and Pennsylvania.

Here is where wages are most and least equal, according to the report:

Workers in the top 90th percentile in Bridgeport, Connecticut , earned 8.7 times as much as those in the 10th percentile, the most unequal wage distribution on the list.

, earned 8.7 times as much as those in the 10th percentile, the most unequal wage distribution on the list. In the New York metro area and San Francisco , workers in the top 90th percentile earned seven times as much as those in the 10th percentile.

, workers in the top 90th percentile earned seven times as much as those in the 10th percentile. On the other end of the spectrum, 90th percentile earners in Detroit earned 5.5 times as much as those in the 10th percentile.

earned 5.5 times as much as those in the 10th percentile. Workers in the top 90th percentile in St. Louis earned 5.3 times as much as those in the 10th percentile.

The wage inequality seen in major cities like Chicago, Houston, New York City, San Francisco and Washington D.C. can be attributed to the “local effects” of technological change and globalization over the past few decades, according to the report, requiring a large number of highly-skilled workers.

As companies need more and more highly skilled and educated workers to keep up with global advancements, those workers are seeing large wage increases, while less-skilled workers see earnings stagnate. Highly-skilled workers, in turn, are flocking to these places, leading to the increased disparity in earnings. Southern cities in Texas, Alabama and Louisiana are also experiencing this growing inequality.

“In places like these, wages for skilled workers toward the top of the wage distribution have increased significantly relative to those at the middle and bottom, resulting in relatively high levels of wage inequality,” reads the report.

This map shows the ratio between what workers in the 90th income percentile and workers in the 10th percentile earn in cities across the U.S.:


Company: cnbc, Activity: cnbc, Date: 2019-10-09  Authors: alicia adamczyk
Keywords: news, cnbc, companies, cities, times, income, distribution, workers, places, inequality, map, 90th, wage, 10th, earned, shows, unequal, greatest, percentile


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What we might learn from Trump’s tax returns — if they’re released

Win McNamee | Getty ImagesPresident Donald Trump’s personal and corporate tax returns could give the public an inside look at his finances — depending on which forms are released. A federal judge on Monday dismissed Trump’s lawsuit to block the release of his tax returns to Manhattan District Attorney Cyrus Vance Jr. The DA is investigating the Trump Organization and had served a subpoena seeking eight years of tax returns. If those documents are made public, they could provide insight into the


Win McNamee | Getty ImagesPresident Donald Trump’s personal and corporate tax returns could give the public an inside look at his finances — depending on which forms are released. A federal judge on Monday dismissed Trump’s lawsuit to block the release of his tax returns to Manhattan District Attorney Cyrus Vance Jr. The DA is investigating the Trump Organization and had served a subpoena seeking eight years of tax returns. If those documents are made public, they could provide insight into the
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Company: cnbc, Activity: cnbc, Date: 2019-10-08  Authors: darla mercado
Keywords: news, cnbc, companies, released, sources, returns, schedule, getty, including, form, trumps, theyre, trump, learn, income, property, estate, tax


What we might learn from Trump's tax returns — if they're released

President Donald Trump announced that the U.S. has issued new sanctions on Iran’s central bank at the “highest level” while speaking in the Oval Office on September 20, 2019 in Washington, DC. Win McNamee | Getty Images

President Donald Trump’s personal and corporate tax returns could give the public an inside look at his finances — depending on which forms are released. A federal judge on Monday dismissed Trump’s lawsuit to block the release of his tax returns to Manhattan District Attorney Cyrus Vance Jr. The DA is investigating the Trump Organization and had served a subpoena seeking eight years of tax returns. The U.S. Court of Appeals for the 2nd Circuit granted a temporary stay of enforcement of the subpoena, giving the president a reprieve. If those documents are made public, they could provide insight into the sources of Trump’s income — depending on which forms are released.

Just be warned, the tax forms themselves won’t tell you everything about a filer’s finances. Think of the Form 1040 as an important piece of the puzzle in a taxpayer’s financial condition. Combined with other documents, including a statement of net worth, it can provide a more complete picture of that person’s bottom line. “What you can see from the individual Form 1040 are the types and sources of income, including whether the taxpayer has capital gains or dividend income,” said Joshua D. Blank, professor of law at the University of California, Irvine. “What you can’t see is wealth,” he said. “We tax people based on annual income and not total wealth.”

Schedule A

Tomoji Hirakata | Getty Images

The first two pages of a Form 1040 are a summary of the taxable sources of income a filer is required to report. The attached schedules are what can shed light on the sources of income and the deductions a taxpayer takes. Deductions reduce taxable income based on your federal income tax bracket. Schedule A is the document taxpayers must fill out to calculate their itemized deductions, including any deductible medical expenses and state and local taxes paid. Take note: Starting in the 2018 tax year, the deduction for state and local taxes paid was capped at $10,000 for individual filers, so there’s a limit to the extent Trump — or anyone with a personal residence in a high-tax state like New York — could write off those property and income taxes. Keep a close eye on the “gifts to charity” portion of Schedule A. Donations that are more than $500 must be spelled out on Form 8283, the noncash charitable contribution form. Taxpayers must describe the donated property and provide a summary of its appraised fair market value, including art, real estate, cars and more.

Real estate income

A “For Rent”‘ sign is posted in front of a house in Richmond, California. Justin Sullivan | Getty Images

Whether your real estate empire is racking up losses or you’re getting income through a web of pass-through entities, Schedule E will have the details on residential, vacation and commercial property. Trump himself uses many limited liability companies to manage different aspects of his businesses. Line 3 spells out rents received for the property. “You can get an idea of business income, as you’d see that coming in through companies and pass-through entities, partnerships and LLCs,” said Jeffrey Levine, CPA and CEO of BluePrint Wealth Alliance. Keep a close eye on depreciation, which you can find on line 18. Depreciation is a tax deduction you can take each year to recover the cost of your real estate as you use it.

While Schedule E might share the name of a pass-through entity that’s providing income to the taxpayer, it may be difficult to learn the details of who ultimately owns it, said Christy Bastian, CPA and president of FVL Consultants. “You can sometimes follow through and trace entities,” Bastian said. “You’re looking for clues, but it doesn’t mean that every return will have it.” Similarly, members of a partnership aren’t always easy to identify, Blank said.

Small business

Interest and capital gains

ericsphotography | E+ | Getty Images


Company: cnbc, Activity: cnbc, Date: 2019-10-08  Authors: darla mercado
Keywords: news, cnbc, companies, released, sources, returns, schedule, getty, including, form, trumps, theyre, trump, learn, income, property, estate, tax


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Confidence in housing weakens just as homes become more affordable

Lower mortgage rates are making buying a home slightly more affordable, but financial concerns are outweighing that benefit and lowering overall confidence in housing. “Consumers who are pessimistic about current housing market conditions are more likely to cite unfavorable economic conditions than the prior month,” said Doug Duncan, Fannie Mae’s chief economist. The drop in mortgage rates has pushed the average monthly payment down by about $124 from November of last year. Low mortgage rates co


Lower mortgage rates are making buying a home slightly more affordable, but financial concerns are outweighing that benefit and lowering overall confidence in housing. “Consumers who are pessimistic about current housing market conditions are more likely to cite unfavorable economic conditions than the prior month,” said Doug Duncan, Fannie Mae’s chief economist. The drop in mortgage rates has pushed the average monthly payment down by about $124 from November of last year. Low mortgage rates co
Confidence in housing weakens just as homes become more affordable Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-07  Authors: diana olick, in dianaolick
Keywords: news, cnbc, companies, lower, housing, weakens, rates, low, mortgage, confidence, homes, interest, affordable, payment, income, monthly, market


Confidence in housing weakens just as homes become more affordable

Lower mortgage rates are making buying a home slightly more affordable, but financial concerns are outweighing that benefit and lowering overall confidence in housing.

Consumer sentiment in housing fell in September from its August high, according to a monthly survey from Fannie Mae. While more respondents think now is both a good time to buy and sell a home, there was a much larger drop in the share of those who said they were not concerned about losing their jobs. It was the second straight month that the component of the survey fell.

“Consumers who are pessimistic about current housing market conditions are more likely to cite unfavorable economic conditions than the prior month,” said Doug Duncan, Fannie Mae’s chief economist. “Job confidence remains high but still well shy of its July reading.”

The share of those saying their household income is significantly higher than it was a year ago was unchanged at just 21%. Although there was improvement in both buying and selling sentiment, far more consumers think now is a good time to buy rather than sell.

The survey comes as mortgage rates sit at the lowest level in over a month and are significantly lower than they were a year ago. While rates did jump in September, they were back down by the end of the month.

With the average rate on the 30-year fixed mortgage around 3.64%, only about 21% of the national median income is required to make the monthly principal and interest payment on the average-priced home. This is the second lowest payment to income ratio in 20 months, according to a new report from Black Knight, Inc.

The average monthly payment on the average priced home is now 10% lower than it was last November, when mortgage rates peaked around 5%. That even includes a 4% home price increase since then.

“Back in November 2018, we were reporting on home affordability hitting a nine-year low,” said Black Knight Data & Analytics president Ben Graboske. “Interest rates were nearing 5%, pushing the share of national median income required to make the principal and interest (P&I) payments on the purchase of the average-priced home to 23.7%. While still below long-term averages, that made housing the least affordable it had been since 2009, spurring a noticeable and extended slowdown in home price growth.”

The drop in mortgage rates has pushed the average monthly payment down by about $124 from November of last year. That in turn boosts buying power by $46,000. In other words, lower rates today mean a buyer can purchase a home that costs $46,000 more and pay the same monthly payment as they would have last November on the cheaper home.

Home prices are still rising, but the growth eased throughout much of this year and then flatlined in August.

“It remains to be seen if this is merely a lull in what could be a reheating housing market, or a sign that low interest rates and stronger affordability may not be enough to muster another meaningful rise in home price growth across the U.S.,” noted Graboske.

The key factor fueling prices continues to be low supply, and it has not increased meaningfully in a few years now. Low mortgage rates could help, giving homeowners who already have low rates more incentive to move and not lose that rate. As rates rise, more owners tend to stay in place, unwilling to pay higher interest rates for the same debt.

Of course all real estate is local, and affordability varies market to market. California continues to be the worst, with seven of the ten least affordable housing markets in the nation. In Los Angeles, it currently takes 43% of the median household income to be able to purchase the average-priced home. That’s an improvement from the 48% required at the end of last year, but it still ranks as the lease affordable market in the nation.


Company: cnbc, Activity: cnbc, Date: 2019-10-07  Authors: diana olick, in dianaolick
Keywords: news, cnbc, companies, lower, housing, weakens, rates, low, mortgage, confidence, homes, interest, affordable, payment, income, monthly, market


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Before moving all your IRA money to a Roth, consider these lost tax benefits

“I’m a big Roth fan, but if you can get your taxes lower, you may want to hold back some of your money in the traditional IRA,” Slott said. When you roll over money from a traditional IRA to its Roth counterpart, the amount moved is taxed as ordinary income. “It’s not unusual these days to see someone claiming $100,000 in medical expenses,” Slott said. Qualified charitable distributionsIf you give money to charity each year, keeping money in your traditional IRA to make those donations could mak


“I’m a big Roth fan, but if you can get your taxes lower, you may want to hold back some of your money in the traditional IRA,” Slott said. When you roll over money from a traditional IRA to its Roth counterpart, the amount moved is taxed as ordinary income. “It’s not unusual these days to see someone claiming $100,000 in medical expenses,” Slott said. Qualified charitable distributionsIf you give money to charity each year, keeping money in your traditional IRA to make those donations could mak
Before moving all your IRA money to a Roth, consider these lost tax benefits Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-10-07  Authors: sarah obrien
Keywords: news, cnbc, companies, consider, medical, moving, tax, traditional, expenses, slott, benefits, roth, taxes, income, lost, ira, money


Before moving all your IRA money to a Roth, consider these lost tax benefits

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If you’re planning to roll over all your assets from a traditional individual retirement account to a Roth version, you might want to tap the brakes. While Roth IRAs grow tax-free and withdrawals generally also are untaxed — and they come with no lifetime required minimum distributions, or RMDs — traditional IRAs have some potential tax benefits that are lost for future use once the money is moved. “The whole idea behind managing taxes in retirement is that you want to get as much money out of your accounts at the lowest possible cost,” said Ed Slott, CPA and founder of Ed Slott and Co. in Rockville Centre, New York. “I’m a big Roth fan, but if you can get your taxes lower, you may want to hold back some of your money in the traditional IRA,” Slott said. More from Personal Finance:

New York judge dismisses suit over SALT tax deductions

ATM bank fees hit a record high — and it’s draining your cash

Women make this big mistake when it comes to life insurance Those tax benefits generally relate to medical expenses, charitable contributions and business losses (explained further below). When you roll over money from a traditional IRA to its Roth counterpart, the amount moved is taxed as ordinary income. Because of that, financial advisors generally recommend that the rollover is done when you’re in as low a tax bracket as possible. While the strategy translates into tax-free income available down the road, it also means you will have already paid taxes on the rollover, so there’s no opportunity to reduce the rate further. On the other hand, if you leave too much in the IRA, the result may not be in your favor (i.e., higher RMDs and taxes). “If you think that you could have these future expenses, then sure, it might make you want to keep money in the traditional IRA,” said CPA Jeffrey Levine, CEO of BluePrint Wealth Alliance in Garden City, New York. “But it needs to be driven by your personal circumstances and situation.”

Medical expenses

Health costs tend to be a major expense for older Americans — to the tune of about $285,000 over an average couple’s retirement, according to Fidelity Investments. That doesn’t include the cost of long-term care — help with daily living activities like eating and dressing — which about two-thirds of 65-year-olds can expect to face at some point over the rest of their lives, according to government estimates. And generally speaking, those costs aren’t covered by Medicare. At the same time, a tax break for medical expenses is one of the few remaining deductions available to individuals since the new tax law took effect in 2018. While it’s limited to the amount that exceeds 10% of your adjusted gross income and you must itemize your deductions to take advantage of it, people with high medical bills can potentially reduce their tax bill by using it. But to take the deduction, you must have taxable income to weigh it against — which means that if much of your income is tax-free due to it coming from a Roth IRA, you could be limited in whether you can take advantage of the break. On the other hand, if you took money from an IRA — whose withdrawals are taxed as ordinary income — to cover those health costs, you could use the medical deduction against that withdrawal. That could mean paying less in taxes than what you had paid by rolling that money to a Roth. “It’s not unusual these days to see someone claiming $100,000 in medical expenses,” Slott said.

Qualified charitable distributions

If you give money to charity each year, keeping money in your traditional IRA to make those donations could make sense. Contributions made through so-called qualified charitable distributions — funds sent directly to the charity from a traditional IRA — are excluded from your taxable income. In contrast, the tax break for charitable contributions — like the break for medical expenses — can only be used if you itemize your deductions. And, generally speaking, a deduction is not as valuable as an income exclusion.

The way to get the most out of your money is to pay as little in taxes as possible. It’s important all the time, but especially in retirement. Ed Slott founder of Ed Slott and Co.

This strategy, though, is only available to IRA owners and beneficiaries who are 70½ or older. Yet because that’s the age when RMDs kick in, the move could potentially reduce your tax liability on the RMD to zero. “If your RMD is $5,000, but you give $5,000 to charity anyway, do the qualified charitable distribution and you don’t have to pick up any of the income,” Slott said.

Business losses

As is the case with the deduction for medical expenses, business losses can only be claimed on your tax return if you have income to claim them against. So if you’ve moved all of your traditional IRA funds to a Roth, and your business has a bad year or two, those losses would not be deductible against Roth withdrawals.

General tax considerations

The way the U.S. tax system works is that regardless of your overall income, any amount that falls into each of seven defined brackets is taxed at a specific rate. In other words, whether someone has income of $20,000 or $2 million, the lowest rate — 10% — applies to a certain amount of that income (zero to $19,400 for a married couple and up to $9,700 for a singles). The next-lowest rate (12%) applies to another range of income, and so on — with the top rate of 37% applying to income above $612,351 for married couples and $510,301 for singles. So, the more income you can get taxed at those lower rates, the better, Slott said.

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Company: cnbc, Activity: cnbc, Date: 2019-10-07  Authors: sarah obrien
Keywords: news, cnbc, companies, consider, medical, moving, tax, traditional, expenses, slott, benefits, roth, taxes, income, lost, ira, money


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