Fleeing the Taxman

John Yeigh

John is an author, speaker, coach, youth sports advocate and businessman with more than 30 years of publishing experience in the sports, finance and scientific fields. His book "Win the Youth Sports Game" was published in 2021. John retired in 2017 from the oil industry, where he negotiated financial details for multi-billion-dollar international projects.

Fleeing the Taxman

John Yeigh  |  Apr 4, 2022

NEW HAMPSHIRE’S state motto is “live free or die.” But for my wife and me, the first part might be better expressed as “live tax-free.”
We just moved to New Hampshire from Maryland. The move’s main purpose is to be near our kids, enjoy lake and mountain activities, and experience cooler summers. But New Hampshire’s zero tax rate on earned income, pensions and capital gains is a major bonus.
Eight states have no tax on personal income,

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Helping Ourselves

John Yeigh  |  Mar 24, 2022

WE NEEDED MONEY to close on a new home. The mortgage process progressed smoothly—until the underwriters suddenly rejected the property right before closing. To get together the money needed to close, my wife and I had to resort to loan sharks—ourselves.
We borrowed from our IRAs. The rules allow tax-free distributions for either a 60-day rollover to a new IRA or reinvestment back into the same IRA. When we called Vanguard Group to execute our “rollovers,” the phone reps were well-versed on this short-term,

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My Uncle’s Advice

John Yeigh  |  Mar 9, 2022

I LEARNED A LOT about finance and life from my uncle. He was an early investment advisor and published a book on wealth management. Even though he was not a registered investment advisor or a Certified Financial Planner, our family proudly extolled his ideas when I was growing up.
My family first introduced me to my uncle’s doctrines when I was a child of five or six. I had been given a small piggybank to store my life’s savings.

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Road to Nowhere

John Yeigh  |  Feb 13, 2022

I’M DEBATING whether my life is better described by Tom Cochrane’s Life Is a Highway or Eddie Rabbitt’s Driving My Life Away. In a recent article, I noted that our family has driven our cars about 1.9 million miles. Since I’m the family’s King of the Road, I’ve been along for at least two-thirds of that ride.
I’m also, alas, the king of lost time.
The average commuting speed in the Washington,

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Wrong Bucket

John Yeigh  |  Feb 7, 2022

IN HINDSIGHT, my wife and I made a mistake by over-saving in tax-deferred accounts. It’s not that we saved too much overall. Rather, we ended up with retirement savings that aren’t diversified among different account types. In fairness, this was caused by the limitations of our work-sponsored retirement plans, coupled with the stock market’s handsome appreciation in recent years.
The classic approach is to build a three-legged stool for retirement—Social Security, a pension if available,

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Driving Lessons

John Yeigh  |  Jan 17, 2022

THIS PAST YEAR marked my 50th anniversary of driving. Over that time, our family has owned 19 cars and driven them roughly 1.9 million miles. While latte purchases frequently evoke financial debate, cars seem less discussed, despite being Americans’ second-largest expenditure after housing. The purchase, ownership, maintenance and sale of cars can all get pretty complicated.
Cars are considered a depreciating asset, but not always. My first car was a 1967 Mercury Comet, which I bought for $400 in 1973.

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Reluctant Spenders

John Yeigh  |  Dec 30, 2021

A 2021 SURVEY by the Employee Benefit Research Institute found that three-quarters of retirees said the value of their financial assets was the same or higher than when they first retired. This finding was consistent from the poorest respondents to those with the most wealth. The typical time in retirement for the respondents was seven to 10 years.
One implication: Retirees may be underspending their accumulated wealth. EBRI examined five reasons for this possible underspending:

Saving assets for unforeseen costs later in retirement
Don’t feel spending down assets is necessary
Want to leave as much as possible to heirs
Feel better if account balances remain high
Fear of running out of money

The first two reasons—”saving for tomorrow” and “no current need to spend”—were reported by almost half of respondents.

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Pocketing Premiums

John Yeigh  |  Dec 14, 2021

INTEREST RATES HAVE been low for years, with 10-year Treasury notes now yielding some 1.4%. How about dividend-paying stocks instead? Many pay twice what Treasurys currently yield, though obviously with more risk. My strategy: Instead of a classic 60% stock-40% bond mix, I’ve landed at roughly 70% stocks, with another 15% to 25% in individual stocks against which I’ve written call options.
By selling call options, I give the buyers the right to purchase the underlying stock from me at a specified price—the so-called strike price—at any time between now and when the options expire.

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Starting Early

John Yeigh  |  Dec 6, 2021

ONE WAY TO MAXIMIZE long-term family wealth is through a teenager’s summer or after-school job. How do these small paychecks add up to serious money? Probably the best investment we can make for our children and grandchildren: Stash their earnings in a Roth IRA.
A teenager’s Roth has three things going for it: little or zero taxes owed on the small bits of income earned, 70 or 80 years of investment compounding, and zero taxes owed when those gains are withdrawn.

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Helping Out

John Yeigh  |  Oct 15, 2020

SOME FAMILY MEMBERS recently asked me to help them find a financial advisor. As luck would have it, soon after, Barron’s published a perfectly timed article, “America’s Best RIA Firms,” which listed 100 highly ranked registered investment advisors (RIAs). Similar lists are available from CNBC and the Financial Times.
It was time for me to get to work. Who wouldn’t want to recommend a “top” firm to his or her family?

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While We’re Waiting

John Yeigh  |  Mar 27, 2020

IN RECENT WEEKS, my wife and I have seen scheduled activities for the next few months come crashing down. Two long-planned vacations with friends, our various volunteer work and our son’s college semester have all been cancelled.
It appears we’ll be effectively quarantined at home for the next two or three months. That means plenty of time to worry about—and work on—our investment portfolio. But it’s also a great chance to bring greater order to our household assets:

Every year,

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Bankrolling Roth

John Yeigh  |  Feb 21, 2020

IN EIGHT YEARS, my wife and I will be age 72—and we’ll be locked into required minimum distributions from our retirement accounts for the rest of our lives. Nearly all of our savings are in tax-deferred accounts.
At that juncture, we’ll also have begun Social Security payments. The upshot: Our tax rate will jump significantly and, thanks to the combination of required minimum distributions (RMDs) and Social Security, our income will easily exceed our expenses.

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Losing My Balance

John Yeigh  |  Feb 14, 2020

CNBC ANCHOR BECKY Quick recently summed up today’s retirement investing dilemma in one sentence: “You’re never going to make enough money if you have 40% of your money in bonds.” She, along with many pundits, believe the old standby recommendation to invest 60% in stocks and 40% in bonds—the classic balanced portfolio—is dead. Google “60/40 asset allocation” and the majority of recent articles have titles that include such words as “eulogy,” “endangered,” “dead,” “the end of” and “not good enough.”

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Our To-Do List

John Yeigh  |  Jan 17, 2020

I HAVE NEVER BROKEN a New Year’s resolution—because, until this year, I’ve never made one. But now that I’m retired, with time on my hands, I figure my wife and I ought to challenge ourselves with 10 financial resolutions for 2020:

We’ll continually monitor routine spending with the goal of reducing or eliminating at least half-a-dozen expenses this year. That’s one every two months. Phone companies, internet providers and insurers, be warned: Here we come.

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Death and Taxes

John Yeigh  |  Dec 16, 2019

TAX-DEFERRED accounts are great, until they aren’t—when we have to pay taxes on our withdrawals. Millions of Americans have tax-deferred accounts, pundits laud them, companies help fund them, institutions service them and markets help them grow. But when it comes time to empty them, often the only person to guide us is Uncle Sam, who’s patiently awaiting his cut.
Efficiently managing 30 years of retirement withdrawals from a 401(k), 403(b), IRA or other tax-deferred account is just as important as the 40 years of accumulation.

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