A federal tax court dropped a bomb on the financial world this week in the form of a new rule for IRA transfers.
Most of us probably have several IRAs at several different banks or brokerages. Each time we had a 401(k) rollover when we left a job or opened an online brokerage, many of us also opened a new IRA.
Well, in the past, when we decided to get serious about managing our money, it wasn’t that big a deal to consolidate the accounts.[ad#Google Adsense 336×280-IA]All it required was signing a few forms and they magically showed up in a single account.
Nice and tidy and easier to manage.
Well, this recent ruling just put the brakes on that process.
In the past, it was OK to make as many transfers from one IRA or from your 401(k) each year to another IRA as you wanted.
Now the court says one transfer a year and only one a year.
Here’s the problem. Make more than one rollover or transfer per year and it won’t be recognized as a tax-deferred change. Only one a year now gets that tax treatment.
The second and any subsequent move will be a taxable event. Be careful here! It will be like taking money out of a tax-deferred account.
You could be looking at a lot of additional taxes.
Now, I can’t give tax advice, so contact your tax preparer and find out how or if this could affect you.
I knew Washington was looking for ways to get to our retirement savings, but this is below the belt even for the IRS.
The 10-Year Cross of Death
Sounds ominous I know but it is really quite simple.
This is a technical indicator in bonds that says when the 50-day moving average of the 10-year Treasury crosses the 200-day, a rally in bonds is imminent.
Look at the chart on your screen now. You can see the orange line, the 50-day, is about to cross below the 200-day moving average (that’s the dark line). That’s the cross of death!
So, why is this important enough to earn a spot in this video? Because this is not supposed to be happening.
Bond prices are supposed to be dropping, not rallying. Didn’t anyone tell the bond market when the Fed cut its bond-buying program, rates were supposed to go up and bond prices down?
In fact, if the cross happens, it could mean a 0.5% to a 1% drop in the rate on the 10-year. That puts the 10-year at about 2.25% to 1.75%. That means bond-buying is accelerating again.
Well, nothing else is making any sense in the markets. I don’t know why I should expect Treasurys to.
Not what the White House wants. Not what the Fed has been trying to make happen.
The stupid low rates we have been enduring for the last few years were designed to drive us to the higher-risk investments – the stock market. It isn’t working.
From where I stand, not much is working.
The “Slap in the Face” Award: The $26 Hot Dog
Well, investors may be looking to bonds for safety, but you wouldn’t know it by their spending habits.
If you haven’t been to a professional sporting event lately, you might be surprised by the cost of some things.
The tickets of course are insanely expensive. A $100 a seat is cheap; $500 and higher are standard for prime seats at most pro football games.
That’s a lot, but the accessories are what are really shocking – accessories in the form of hot dogs.
Hot dogs have gone off the map. The cost for a dog at the park is up 34% in the last 10 years – 34%! Inflation is only about 20% for the same period. Beer is only up 14%, but that was always crazy expensive, anyway.
The New York Mets have a dog for $6.25. That’s for one hot dog and the league’s highest price.
I think hot dogs are the most delicious and one of the worst foods you can probably eat. I love them, but not at that price.
Dodgers fans will gobble up 3.2 million dogs this year at $5.50 per puppy. Do the math. This is crazy!
But the Texas Rangers take the prize with a two-foot-long dog covered in cheese, chili, jalapenos and onions for… drum roll please… $26.
I’ve paid less for steaks. Not great steaks but, they did come with a baked potato.
Is it me, or is it getting really nuts out there?
Twenty-six dollars for a hot dog!?
I wonder, do these people actually work for their money? It seems highly unlikely or it comes much too easily.
— Steve McDonald[ad#IPM-article]
Source: Investment U